Relief As Tinubu Signs Executive Order To Reduce Pharmaceutical Prices

President Bola Tinubu has signed an executive order to introduce zero tariffs, excise duties and Value-Added Tax (VAT) on imported pharmaceutical inputs.

The order introduced zero tariffs, excise duties, and Value-Added Tax (VAT) on specified machinery, equipment, and raw materials imported for pharmaceutical production.

The coordinating Minister of Health and Social Welfare, Muhammad Ali Pate, disclosed the development in a statement.

The Minister noted that the order is crucial to the success of the initiative for unlocking the healthcare value chain (PVAC_NG), which was approved in October 2023 by the president.

According to him, “In a transformative move to revitalize the Nigerian health sector, His Excellency President Bola Ahmed Tinubu, GCFR @officialABAT, has signed an Executive Order aiming to increase local production of healthcare products (pharmaceuticals, diagnostics, devices such as needles and syringes, biologicals, medical textile, etc.).

“The Minister of Justice and Attorney General of the Federation @FedMinOfJustice, Prince Lateef Olasunkanmi Fagbemi SAN, @LOFagbemi, is to now take the next steps towards codifying the new Order.

“Specified items include Active Pharmaceutical Ingredients (APIs), excipients, other essential raw materials required for manufacturing of crucial health products like drugs, syringes and needles, Long-lasting Insecticidal Nets (LLINs) and Rapid Diagnostic Kits, among others.

“The Order introduces zero tariffs, excise duties and VAT on specified machinery, equipment and raw materials, aiming to reduce production costs and enhance our local manufacturers’ competitiveness.

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

The order, according to the statement, has also mandated collaboration among relevant ministries and agencies, including the Nigeria Customs Service (NCS), National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organisation of Nigeria (SON), and Federal Inland Revenue Service (FIRS), to ensure swift implementation and reduce regulatory bottlenecks.

Pate said that it provides market-based incentives to encourage medical industrialization, reduce costs of medical products through import substitution, create and retain economic value, and enable job creation in the healthcare value chain.

The waivers and exemptions will be effective for two years.