The Pharmaceutical Society of Nigeria (PSN) has raised an alarm over rising cost of essential medicines in the country following the implementation of the 20 percent Import Adjustment Tax (IAT) on imported drugs in the country and the high exchange rate of N500 to $1. Arising from these factors, the PSN explained, the prices of essential medicines, such as anti-malarial drugs and antibiotics have risen by over 150 percent in less than two years.
The PSN also pointed out that these have taken the average shelf price of an Artemisinin-based Combination Therapy (ACT) medicine, an anti-malaria drug, from N700 in 2015 to N1,600 now with a propensity to hit N2,000 before the end of March 2017. Also, prices of hypertensive, anti-inflammatory and diabetes drugs have gone up astronomically.
The PSN President, Ahmed Yakasai, who has also written a letter to the Acting President, Prof. Yemi Osinbajo, on the implication of the implementation of the IAT on the health of Nigerians, stressed that the policy will increase mortality rate in the rank of consumers of health services because the drugs will become unaffordable to the average Nigerians. The PSN President observed that the aim of the current National Drug Policy (NDP) 2015 which is to make safe, efficacious and affordable medicines available to all Nigerians will be defeated with the new 20 percent IAT and the prevailing high exchange rate. The situation, he says, will make genuine medicines not affordable and the merchants of death will now increase the production of fake drugs in the country.
We recall that in 1988, the World Trade Organisation (WTO), which Nigeria is a member, recommended to member states importing medicaments not to charge more than five percent duty on imported medicines. Similarly, thereafter, the ECOWAS Committee on health met and recommended that all medicaments should attract zero percent duty in every member country.
We vividly remember that prior to this, Nigeria was charging import duty of 20 percent for pharmaceutical products and five percent VAT. But in 2013, Nigeria, like all ECOWAS member countries, decided to fix her Common External Tariff (CET) at zero percent. Stakeholders in the pharmaceutical business unanimously agree that the implementation of the 20 percent duty is a clever way of making ECOWAS believe that Nigeria has complied with the recommended CET whereas this is actually a return to the former 20 percent import duty disguised as Import Adjustment Tax.
With this and high port charges plus VAT, average consumers of essential drugs in the country will find most medicines unaffordable. The fact that about 80 percent of drugs in Nigeria are imported makes the 20 percent duty ill-advised and unnecessary. The situation will make it extremely difficult to meet the government’s vision of providing affordable healthcare and achieving universal health care coverage in the country.
In view of the deleterious effects the implementation of the Import Adjustment Tax will have on the health of Nigerians, we call on the Federal Government to stop forthwith the exercise. Government should remove the new duty and return to the status quo of zero percent duty on imported drugs until such a time we have the capacity to produce most of our drugs locally.
Besides leading to high cost of essential medicines, the measure will shorten the lifespan of Nigerians, who are already groaning from the effects of the prevailing economic recession. Going ahead with the IAT will turn Nigerian into a Hobbesian state where life is nasty, brutish and short.
The new tax policy, if implemented, will put many pharmaceutical companies in Nigeria out of business and invariably lead to avoidable job losses. It will also lead to imminent scarcity of drugs and medicaments in the country. Nigerians cannot cope with additional pains that this obnoxious and ill-thought out tax is bound to impose on them. Let government revert to zero percent duty on imported drugs.