Why drug prices remain high despite executive order – Pharmacists
Pharmacists have expressed concerns that the effects of the executive order on pharmaceutical products have not yet been realised, as drug prices remain high in Nigeria.
They emphasised that measures such as access to low-interest loans, simplified drug importation processes, favourable foreign exchange rates, and improved power supply would help lower the prices of drugs.
Three months ago, the Coordinating Minister of Health and Social Welfare, Prof Muhammad Pate, announced on his X handle that in a transformative move to revitalise the Nigerian health sector, President Bola Tinubu signed an executive order to increase local production of healthcare products, including pharmaceuticals, diagnostics, devices such as needles and syringes, biologicals, medical textile, and among others.
The order also provides for establishing market-shaping mechanisms such as framework contracts and volume guarantees, to encourage local manufacturers.
The minister added that the implication of the order is to 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
However, stakeholders in the pharmaceutical industry argued that the order has had little effect on lowering drug prices.
Speaking, a Senior Vice President for Advantage Africa, Adewale Oladigbolu, said, “We haven’t seen any impact of the implementation of the order.
“We haven’t seen a drop in drug prices. What we have seen is the stability of the exchange rate, price fluctuation is reduced, but the prices are still up there. What we had was galloping inflation and galloping increasing prices of medicines.
“The prices are high, but it’s not changing as frequently as it was when the exchange rate was not stable. So, we have not seen the impact of the executive order at all.
“That’s why I always say, before the pronouncement of any policy, before implementation, we should just try to do a baseline study on where we are and the implementation, we should try to check where we have moved to. But as far as we are concerned, drug prices are still high. We have not seen a reduction in drug prices”.
Also, a former chairman of the Lagos State branch of the Pharmaceutical Society of Nigeria, Gbolagade Iyiola emphasised that the exchange rate remains a key factor contributing to high drug prices, despite the executive order
Iyiola said, “The executive order is about custom duty on raw materials, it doesn’t cover finished drug products. Even the custom duty on raw materials is only 20 per cent. Again, the dollar rate used to be N400 years back, but it’s now at N1500-N1600, and only 30 per cent of drug products are manufactured in Nigeria, according to our statistics.
“So, what the executive order has done is that it’s only a fraction of the cost implications it removed. The order is a good one and we commend the government for it, at least some logistics costs are removed, but the cost is negligible. So, you don’t expect the executive order to bring the price of the imported products down.
“If 70 per cent of drug products are imported, their prices will not change as of now. So, it remains only 30 per cent of drugs are locally produced, and out of those that are locally produced, the problem we still have now is that we are not sure if the order is being implemented because they say they were preparing the circular a month ago. So, we don’t expect the price of drugs to come down. The prices of medicines will not come down simply just because of an executive order.”
