Tinubu signs new executive order to address rising cost of drugs, other consumables

As part of efforts to revitalise Nigeria’s health sector, President Bola Tinubu has signed an Executive Order aiming to boost local production of healthcare products and reduce costs.

The targeted healthcare products include pharmaceuticals, diagnostics, devices such as needles and syringes, biologicals, and medical textiles, among others.

The new order, according to the Coordinating Minister of Health and Social Welfare, Muhammad Pate, has introduced zero tariffs, excise duties and VAT on specified machinery, equipment and raw materials.

Mr Pate, who had hinted in February of the executive order, noted in a post on X Friday night that the new effort would reduce production costs and enhance local manufacturers’ competitiveness.

In the past few months, Nigeria has been grappling with the escalating costs of medications nationwide which is connected to the exit of some multinational pharmaceutical companies from the country.

The country’s over-dependence on importation became glaring when pharmaceutical companies, like GlaxoSmithKline (GSK) and Sanofi, exited the country.

New order

Mr Pate said the Attorney General of the Federation, Lateef Fagbemi, is expected to take the next steps towards codifying the new order.

According to the minister, the order is pivotal to the success of the initiative for unlocking the healthcare value chain which was approved in October 2023 by the President.

“Specified items contained in the new Executive Order include Active Pharmaceutical Ingredients (API), excipients, other essential raw materials required for manufacturing of crucial health products like drugs, syringes and needles, long-lasting insecticidal nets and rapid diagnostic kits, among others,” he noted.

“The Order also provides for establishing market-shaping mechanisms such as framework contracts and volume guarantees, to encourage local manufacturers.”

He further noted that the order mandates collaboration between the Ministers of Health, Finance, and Industry, Trade and Investment to develop a “harmonised implementation framework, expediting regulatory approvals and reducing bottlenecks.”

The minister pointed out that agencies including the Nigeria Customs Service, NAFDAC, SON and FIRS would ensure swift implementation, with special waivers and exemptions effective for two years.

“The implication of this order is pivot towards market-based incentives to encourage medical industrialisation, reducing costs of medical products through import substitution over time, creating and retaining economic value and enabling job creation in the healthcare value chain,” he added.

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Manufacturing facilities in Nigeria

As of February, the National Agency for Food and Drug Administration and Control (NAFDAC) said a total of 105 applications for the construction and erection of drug manufacturing facilities have been approved across the country.

According to a document obtained by PREMIUM TIMES and signed by the Director General of NAFDAC, Mojisola Adeyeye, 35 per cent of the approved applications have completed construction.

It noted that the applicants were at different stages in the registration stream as prescribed by extant NAFDAC’s guidelines on the establishment of pharmaceutical plants in Nigeria.

The agency stated that over 20 newly registered local drug manufacturers have cumulatively invested over $2 billion in the erection and completion of WHO-compliant facilities that manufacture quality pharmaceuticals and essential medicines for Nigerians.

Mrs Adeyeye clarified that the development is aimed at strengthening local manufacturing and is not a replacement for the global giant drugmakers exiting the country, “they are signs of progress for Nigeria.”