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Drug Manufacturers Lament High Production Costs, Import Duty

The Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMGMAN) has lamented the high cost of import duty and the high cost of operation in the country.

The group said the high cost of medications is influenced by the high cost of customs duty, cost of production, and inflation.

PMGMAN is a sub-group of MAN, representing all the manufacturers of pharmaceuticals and allied products in Nigeria.

Speaking with Punchng on Saturday, the Chairman of PMGMAN, Oluwatosin Jolayemi said though the rising cost of drugs in the country is not new, the group is worried.

Jolayemi said, “The PMGMAN is certainly concerned but the rising cost is not a new thing. The new thing is the regime that the custom has introduced now, apart from the dollars sliding.

“The Customs decide to use the parallel market rate as their rate of judging duty instead of using the official market rate. Apart from the indiscretional use of picking of HS-Code which increases the duty on each of the products.

“So, we are facing different battles in the industry apart from the dollar uncertainty, we are fighting the battle of duty indiscretion, we are fighting the high cost of operation when it comes to the cost of power; all these costs will certainly increase the cost of production and cost of medication.”

Jolayemi noted that operation funds are being eroded by the devaluation of the naira.

“It’s not only the pharmaceutical industry that is facing this but everyone that is manufacturing that has to bring in any form of raw materials, active pharmaceutical ingredients, packaging materials, that are not locally procured faces the same thing. Now in the case of PMGMAN to be specific, there is no shortcut to medicines, you cannot even adjust quality because the moment you adjust quality, your product becomes substandard.

“So, what is going to happen as time goes on is that you will begin to see that companies will begin to make up their minds on the brands they want to continue to carry. If they import and they notice that some products are just too expensive, they cannot pass on the products because of the price, they will decide to just leave those products, and go with the ones they think they are comfortable with. So, there is no stability in the costing any more, and again there are no credit sales anymore,” he explained.

Proffering ways forward, the PMGMAN chair urged the Federal Government to consider giving about a 40 per cent rebate on every calculated duty, which would provide relief in the import duty.

“The other thing they could do is to look at how to make sure the industry gets like a revolving fund, where industries could have access to funding at the single digit to increase your production, so as not to have an issue of stock out.

“Then the government should begin to look at pharmaceutical manufacturing of medicines, as a security issue. We should understand that a healthy nation is a wealthy nation. If we are sick and we cannot have access to medication, then we are all going to be sick. Except the government pays special attention to the health industry, and particularly the pharmaceutical industry, the hospitals merely become consulting rooms.

“Medicines are very important for security purposes to be able to guarantee a quality of life that we require as a nation. So, I think medicine should be seen as a priority issue for security purposes. They should pay attention to the pharmaceutical industry, though they are doing that already, they need to sit with the pharmaceutical industry to ask what to do because nobody in government is into manufacturing, and they don’t know the problems of manufacturers.

“So, they keep talking to themselves and keep looking for solutions for manufacturers without involving the manufacturers, then it is just an exercise into futility,” he said.

Jolayemi added that there is a need for political will to improve medicine security in the country.

“Except we begin to see the production of medications as a priority, as a people, and as a nation, we might continue to say the same thing over and over again, and until then, we are not going to reach any reasonable conclusion,” he said.

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