The federal government is currently developing a single platform for pooled procurement of healthcare products in order to reduce costs and ensure the accessibility of essential medicines.
Abdu Muktar, national coordinator of the Presidential Unlocking Healthcare Value-Chain Initiative disclosed this during an Interactive Session on ‘Is the Market Ready for Increased Local Manufacturing of Medicines?’ at the ongoing Nigeria Economic Summit.
Pooled procurement is a model where financial and other resources are combined across different purchasing authorities, to create a single entity for bulk buying of health products on behalf of individual purchasing authorities, according to the World Health Organisation.
Muktar explained that the government is in the process of designing the procurement platform using a Public-Private Partnership (PPP) framework which will adopt successful international models of pooled procurement to fit Nigeria’s context.
He emphasised that the current healthcare procurement landscape in Nigeria is fragmented across federal, state, and private sectors which impacts the cost of medicaments.
“The president has given us a go-ahead, we’re currently designing this. This has worked in some parts of the world, but we’re bringing it to Nigeria,” he noted.
“Basically, it’s one platform, it is not an agency or anything. It’s just a platform that will bring everybody together federal government, the states, manufacturers, and health insurance agencies among others,” he explained.
The initiative is part of an executive order that removes VAT and import tariffs on pharmaceutical products, equipment, and raw materials, allowing for more competitive market conditions.
Muktar highlighted that this would help shape the market to encourage local production without sacrificing affordability or quality.
“So we’re creating market-shaping mechanisms, including framework contracts, and that included pooled includes procurement. You don’t want to produce goods because you’re producing locally, and have your citizens buy those products at a higher cost because they’re just locally produced.
“Local production in Nigeria or anywhere in Africa should not mean poor quality products,” the coordinator said.
The national coordinator also mentioned that the draft implementation of the executive order that provides for zero VAT, and zero duty for importable equipment and raw materials for the production of pharmaceutical products will kick off this week.
He said the framework for implementation has been concluded and agreed upon by all stakeholders and will be gazetted by the Attorney-General of the Federation which will pave the way for effective implementation.
Read also: Tinubu signs executive order to increase local production healthcare products
“We’ve actually developed a framework that everybody’s happy with that is going to be implemented.”
“This week, the Attorney General is going to publish the Gazette. It’s coming out this week from the government press. So that’s really, that means it’s codified. It’s going to be effective immediately.”
At the session, industry stakeholders identified the lack of pooled procurement as a significant challenge for Nigeria’s pharmaceutical sector.
Chukwudi Uche, country program manager at CIPS Health Procurement Africa Project, emphasized the need for a well-coordinated procurement strategy.
He stressed that one overarching challenge is the weak capacity of procuring organisations which largely lack a strategy for procurement.
Uche said pooled procurement will help reduce prices and ensure efficiency while noting that the Government is the largest off-takers of the pharmaceutical industry.
He also stressed the importance of leveraging technology in healthcare procurement and called for more skilled supply chain professionals.
“There is a gap in the number of trained professionals in health procurement. We need experts to manage the hub effectively and drive the system forward,” Uche said.
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