es
Hea
t iv
R
e
a Colleg ov
l
th care xecu E
DRUG SECURITY & PHARMA BUSINESS NIGERIA The Strategic Anchors For Drug Security
VOLUME 8
WHO Pre-qualification Are Prescription Drug Prices High? NAFDAC Activities - key to ensuring drug security in nigeria The Impact Investment MINFLOW- made in Nigeria for the world Gandhian Economics Of Capital Efficiency
CHANCES OF A BETTER FUTURE
I
t is an undisputable fact that medicines and vaccines are very critical in the provision of healthcare in any nation because they provide credibility to the
health system. Without them, the eorts of most of the other interventions in the healthcare delivery system are undermined. Without doubt and from experience of the Ebola virus crisis, self suf iciency in medicines and vaccines is now an ational security concern. A critical intervention is urgently required to increase pharmaceutical manufacturing in West Africa with Nigeria as the hub to provide 70% of the requirement for local medicines. The Federal Government of Nigeria has directed that in-country production capacity must increase to 70%. It has amended and added to the essential drug list amongst other policy interventions. Further, NAFDAC have been empowered to lead and drive the process by its ight against fake drugs and support for accreditation of WHO-cGMP of Nigerian Pharmaceutical Industries. In recent years, the Nigerian Pharmaceutical Industry has demonstrated the capacity to produce safe, ef icacious, and quality medicines. The Pharma Industry have taken proactive steps and has invested over N70b towards International certi ications and facilities upgrade in 5y ears. With the support of NAFDAC, UNIDO, and WHO, four companies have WHO-cGMP certi icate with seven more in the pipeline. There has been a slight shift in the R&D emphasis from imitative to innovative R&D and an increased competence in advance process engineering. Despite these huge investments, the country still import essential medicines contrary to the National Drug Policy and capacity utilization is below 50%. Healthcare Management Review Vol 8 /Page 16
Considering the high risk of import-dependency, there is need to consolidate the gains of the last 10 years by re-examming and re-enforcing all aspects of government policies, inancing interventions, incentives, and sustain support for international certi ication (WHO -c G MP) and facilities up grade. To give the local entrepreneur a competitive edge, we should focus on protection, adherence to procurement policies, delay in payments, packaging of SMEs and the role of capital market in venture capital. There is need to adapt product development to recent operating environment with competencies in resource optimization and encourage Blue Ocean Philosophy for those trying to get a step ahead of the competition through value innovation. One important component of a functioning health system is an appropriate medicine management cycle and good distribution practice which will ensure uninterrupted supply of essential medicines. Group distribution should be encouraged to ensure optimization of resources. Critical to the success of Drug Security is the recognition that the pharmaceutical manufacturing system involves a broad array of players and that strengthening the dierent component requires a broad range of expertise. Consequently, the need for collaboration between parties is of paramount importance. In view of this, building a consortium of partners is recommended. Together, we have to midwife the birth of a new Pharmaceutical Industry.
Emmanuel C. Abolo Editor-in-Chief Healthcare Management Review Vol 8 /Page 17
70% D
espite government eorts to promote domestic manufacturing, Nigeria remains heavily reliant on imported pharmaceuticals. The revised National Drug Policy (NDP), set a target for 70% (in volume) of the country's' demand for medicines to be met by local drug manufacturers by 2008. Consequently, government policies were designed to support local production of essential medicines in accordance with the NDP. The pharmaceutical manufacturing sector has experienced a steady annual growth of 10 – 15 per cent since 2001 (IFC). Furthermore, ive local drug manufacturers have WHOcGMP and many more are upgrading their facilities to comply with WHO prequali ication and WHO-cGMP requirements.
This will enable the companies promote the medicines manufactured locally in Nigeria to ECOWAS countries and beyond. In addition, once pre-quali ied, local manufacturers will be able to participate in International procurement tenders called by International development partners. Consequently, the 70 per cent target set by the National Drug Policy should be achieved by 2020. According to a survey by UNIDO, capacity utilization within the sector in Nigeria is about 40 per cent, meaning that there is a large volume of underutilized manufacturing capacity which could be applied to produce new products upon demand.
Healthcare Management Review Vol 8 /Page 19
The NDP aims at reaching 70 percent local production in drug along with other goals including the establishment of an effective drug procurement system,
developing
an efficient
drug
distribution
system,
the
harmonization of drug legislation with ECOWAS sub region and the commitment to the national use of medicines at all levels of health care.
OPPORTUNITIES FOR LOCAL PHARMACEUTICAL
-
Government ban on imports of some essential
PRODUCTION TO ACHIEVE 70% (VOLUME) OF
medicines for which there is adequate domestic
NIGERIAN MARKET.
capacity and technical skills. -
-
The strong demand and the need for improved
Scheme (NHIS) to provide universal health care
management of infectious disease especially,
coverage, by 2015 will provide funds for the
HIV/AIDs, Malaria, TB, and Neglected childhood
required essential medicines.
disease. -
Establishment of the National Health Insurance
-
The local pharmaceutical industry has a
Increased research and development efforts at
comparative advantage in providing remedies
the National Institute for Pharmaceutical
for neglected tropical diseases (NTD).
Research and Development (NIPRD) and
-
National Universities can lead to the emergence
The following milestones when reached, will have a very
of new therapeutic agents, nutraceuticals and
positive impact on the pharmaceutical business in Nigeria,
phytomedicines from Nigeria's abundant
over the next 10 years.
indigenous biodiversity and traditional
-
Improved distribution of medicines.
medicines.
-
Advances in Biotechnology.
Positive Economic growth in recent years and
-
The Harmonization of medicine registration within ECOWAS.
macroeconomic stability are helping to reduce poverty and increase purchasing power. -
-
Nigerian pharmaceutical manufacturers.
The increasing visible and active National Agency for Food and Drug Administration and
-
-
Development of pharmaceutical raw materials using indigenous basic raw materials.
Control (NAFDAC) and, in particular, its campaign against substandard health products
WHO certification and prequalification of more
-
New phytomedicines developed by NIPRD and
have shown a positive impact on reducing
Universities registered by NAFDAC and licensed to
counterfeit drugs trade.
local pharmaceutical companies for commercial
Government Policy aiming to achieve local
production and global marketing.
production of 70 percent of essential medicines. Healthcare Management Review Vol 8 /Page 21
Credit: PMG-MAN
1.
The Pharmaceutical Industry be designated a Strategic Sector and Essential Medicines designated Security Items in Nigeria which should be backed by preferential policies.
2.
In view of this Special Status, Pharmaceutical Products and inputs be permitted to access foreign exchange from the Retail Dutch Auction System (RDAS) window to prevent prices of medicines spiralling out of the reach of our people.
3.
Ministries, Departments and Agencies to patronize local manufacturers in compliance with Presidential Directives, while the Domestic Preference Policy of the Public Procurement Act 2007 be fully implemented and prompt payments eected.
Healthcare Management Review Vol 8 /Page 22
THE STRATEGIC ANCHORS FOR DRUG SECURITY 4.
There is need to encourage investment in the pharmaceutical sector through the implementation of extant incentives such as Grants, Pioneer Status, Tax Holidays and affordable funding from Developmental Banks.
5.
There is need for Special Incentives for Research and Development in the Pharmaceutical Sector as well as Special Tari ffWaivers & Concessions for specialized machinery and equipment for quality improvements and upgrades such as Air Handling Units, Clean Room Items and speciality chemicals for flooring.
6.
There is an urgent need to protect the Nigerian Pharmaceutical Industry within the implementation of the ECOWAS Common External Tari ff(CET) through appropriate levies on products that local Industry produce in sufficient quantities and are therefore placed on Import Prohibition List in Nigeria.
Healthcare Management Review Vol 8 /Page 23
GOVERNMENT SHOULD PROVIDE THE ENVIRONMENT
P
roviding adequate healthcare to their population remains a major challenge for governments in Africa and Nigeria in particular. Unsatisfactory and inadequate access to essential drugs and other healthcare commodities is a key limitation that impacts on people's health in most developing and least developed countries (LDCs). The increased funds now available for the procurement of medicines to treat the three pandemics (HIV/AIDS, Malaria, and Tuberculosis) are very valuable development and have reduced the suffering and extended the lives of millions of people in developing regions. However, reliance on donor funds is clearly not sustainable in the long term and there are many more diseases for which pharmaceuticals are key treatments and which access to quality medicines is much less advanced. In response to these considerations, local production of essential drugs is an important component of a long term solution to provision of adequate healthcare in developing countries like Nigeria.
Adequate access to drugs is dependent on both the affordability and quality of the products. Unaffordable low quality products are not the answer either. Therefore, an industry that produces high quality drugs at competitive prices must be the target when developing local manufacturer of pharmaceuticals in Nigeria. The pharmaceutical sector is a complex one, involving many different stake holders such as manufacturers themselves, National regulators, government ministries, wholesalers and others. Developing the industry require concerted actions across these stake holders to create the environment in which that industry can lourish and realize its full potential as an asset to economic and social development. An example of the role of stakeholders can be seen with regards to the scourge of counterfeit drugs, which cause huge health problems and also represent a threat to legitimate manufacturers who effectively have to compete with these substandard products.
Healthcare Management Review Vol 8 /Page 24
“It is important to manufacture generic medicines in closer proximity to where they are actually needed.”
In the face of the situation, and actions by, for example, regulators to reduce the penetration of these counterfeit products would, as well as being important from a health perspective, also bene it the local pharmaceutical industry. Furthermore, quality requires upgraded skills and equipment, so how can high quality be produced at affordable prices? This challenge requires various government ministries to work together to establish the support to the industry that will enable ef icient local companies to invest in high quality production. However, those companies that do invest in upgrading will need some form of protection from those that wish to produce products at a lower standard. Consequently, the establishment and enforcement of quality standard by regulators is a critical element in solving the conundrum.
UNIDO SUPPORT Since 2006, UNIDO, with funding from the Government of Germany, has been conducting a project on strengthening the local production of essential generic drugs in developed countries including Nigeria. The objective is to help the pharmaceutical sectors in developing countries realize their potential role of acting as a pillar of public health and contributing to the economic and social development.
Adequate access to drugs is dependent on both the affordability and quality of the products. Unaffordable low quality products are not the answer either. Therefore, an industry that produces high quality drugs at competitive prices must be the target when developing local manufacturer of pharmaceuticals in Nigeria.
so how can high quality be produced at affordable prices? Healthcare Management Review Vol 8 /Page 25
Increase the proportion of the population with access to affordable essential drugs on a sustainable basis
D
uring the last decade, promoting sustainable access to quality and affordable medicines and integrating local production as part of the overall health system strengthening packaging has been of signi icant concern to Nigeria and Africa in general. A viable pharmaceutical industry in Nigeria shall not only impact on the Nigeria health system and its capacity to provide medical products of priority to diseases of HIV/Aids, Malaria, TB, and Neglected tropical disease but will also contribute to the overall socioeconomic development of the sub region. The public sector will bene it from improved security of supply and robust regulatory oversight (feasible due to proximity of production) as well as providing a basis from which novel formulations and new products can be developed to tackle speci ic diseases and treatment challenges that are peculiar to the nation. As the global inance deepens, the sector will provide the basis for sustainable treatment programs as contributions that donors make plateaus or even begins to diminish. The sector can also make a contribution to economic growth through enhanced exports, and reduced reliance on imports on which we have limited regulatory over sight. For this reason, the Federal Government of Nigeria have to be committed to enhancing one of the set targets of the 8th millennium development goals, to increase the proportion of the population with access to affordable essential drugs on a sustainable basis. There is need to galvanize the necessary political will and provide “Leadership” to the broad range of processes required for strengthening the ability to produce high quality and essential medicines, to improve health outcomes.
Healthcare Management Review Vol 8 /Page 26
In developing countries such as India and China, where there are lourishing pharmaceutical sectors, the industry is reputed to bene it from a number of policy measures including protection through tariff regimes and procurement preferences as well as direct support such as interest subsidies, export credit, cheap utilities, working credits, and tax holidays. Consequently imports to our country have often been subsidized through signi icant support from their respective governments. While the Federal Government have identi ied the importance of strengthening the local manufacturing sector, there is often policy incoherence across government ministries. This creates an overall environment that is not conducive to the development of our pharmaceutical industry. Furthermore, there is the need to improve the quality of products to which our people are exposed across the Essential Medicine List (EML). The impact of substandard production will be mitigated through ensuring that critical products that would have serious public health consequences should they be of unsatisfactory quality are only manufactured by those of our companies that have reached certain requisite standard. To improve the effectiveness of our resource constrained regulators to oversee the supply of products, the government should encourage production of high quality drugs in situ. The quality standards to which pharmaceutical manufacturers adhere, vary signi icantly. We have examples of companies that have reached WHO- cGMP, some are in the processes, while many more will like to have the International standard, they have not been able to access the detailed technical know-how or investment needed to progress towards this mark.
The quality of pharmaceutical is a function of many dimensions. Following production, the regulation plays a key role in ensuring that the product reaches the patient in appropriate condition through oversight of good distributions and whole selling practice. A further post production function of the regulator is overseeing the market through pharmacovigillance activities and the establishment of adverse event reporting mechanisms.
However, there are entities that are happy with NAFDAC certi ication and will continue with the current status. The industry does face serious challenges if it is to achieve and maintain the quality that is required. These challenges include limited access to inance, limited availability of skilled human resources, inability to access detailed know-how necessary to implement an up grading program or design new plant, signi icant costs involved in the proper development of new products, the aforementioned policy incoherence, and under developed supporting industry. The quality of pharmaceutical is a function of many dimensions. Following production, the regulation plays a key role in ensuring that the product reaches the patient in appropriate condition through oversight of good distributions and whole selling practice. A further post production function of the regulator is overseeing the market through pharmacovigillance activities and the establishment of adverse event reporting mechanisms.
assist and promote the development of pharmaceutical manufacturers in Nigeria and for it to contribute to improved public health outcomes. For example, the Trade Related Aspects of Intellectual Property Rights (TRIPS) lexibilities have been under utilized. Key to the sustainability of manufacturing in Nigeria is the degree to which our manufacturers can compete with imports. As pointed out, remedying the policy incoherence will go some way to improving competitiveness and achieving ef icient production by using modern production management techniques that has the capacity to increase capacity utilization of plants. Critical to the success of drug security is the recognition that the pharmaceutical manufacturing system involves a broad array of players and that strengthening the dierent components requires a broad range of expertise. Consequently, the need for collaboration between dierent parties is of paramount importance. In this view, building a consortium of parties is recommended.
This is required to identify instances of sub standard products reaching the market so that product recalls can be rapidly enacted and counterfeit products identi ied and removed from the market. In addition to the challenges faced by the industry, there is underutilized opportunities to
Healthcare Management Review Vol 8 /Page 27