The need for policies that would support growth of outsourcing in the pharmaceutical industry is being urged by the Nigerian Representative of Overseas Pharmaceutical Manufacturers (NIROPHARM), which argues this could boost local drug supply.
The group says there is a need for fiscal and regulatory review to recognise contract manufacturing as an integral part of local manufacturing, even as its conference on contract manufacturing in Nigeria comes up next month.
According to its position paper, the current government fiscal policy regime does not effectively support pharmaceutical contract manufacturing, despite its robust potential.
The harmonised system (HS) code classification of pharmaceutical products, for instance, needs further definition to ensure easier differentiation between pharmaceutical products, the group stated.
The HS code is a standardized numerical method of classifying traded products, used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics.
A more detailed classification is expected to enable easier implementation of duties and import adjustment tax (IAT) on the correct product classification, exposing opportunities for local or contract manufacturing.
To improve the current HS-Code classification, NIROPHARM has proposed a revision of the current ECOWAS HS-Code and has submitted a proposal on the reclassification of the Nigerian pharmaceutical HS Codes in line with global pharmaceutical manufacturing countries.
Also for categorisation of imported finished products, the group recommends a model that includes all pharmaceutical products manufactured in the country, with proven local manufacturing capacity in “Category A” and IAT not more than 20 percent.
All pharmaceutical products that are manufactured in the country without adequate local manufacturing capacity should fall under “Category B”, with 5 percent IAT and upward bi-annual review to 20 percent until full local manufacturing capacity is reached, their proposal states.
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Category C should cover all pharmaceutical products that are not manufactured in the country but can be, with 5 percent IAT and upward bi-annual review to 20 percent until full local manufacturing capacity is reached.
Segun Ogunjinmi, NIROPHARM vice-president also suggested that since all pharmaceutical products cannot be produced locally, either because the molecules are under patent or because the local manufacturing industry lacks the required technology, no IAT should be charged until such a product can be categorised under ‘C’.
Meanwhile, they urge that bulk importation of finished tablets and packaging in Nigeria should be encouraged and considered as a low-hanging step towards contract manufacturing.
According to Ogunjinmi, “it offers global pharmaceutical companies the opportunity to phase their entry into full-scale local contract manufacturing. As such, the tariff on bulk and intermediate products is recommended not to exceed 5 to 10 percent.”
NIROPHARM also assured that its members are willing to engage local manufacturers to contract manufacture products that fall within Category A, if the local manufacturers can achieve and demonstrate they have WHO certificate of Good Manufacturing Practice (cGMP).
Such manufacturers should also be able to define their contract manufacturing operations to deliver defined pricing, IP protection and volume delivery agreements.
In terms of regulatory policies, the group wants contract manufacturing and bulk packaging to be recognized as local manufacturing in the proposed licences renewal policy.
Sam Ohabunwa, president, Pharmaceutical Society of Nigeria (PSN) expressed the view that any product manufactured in the country should be recognised as Nigerian made.
“Anything that is manufactured here is made in Nigeria. It doesn’t matter who is the original owner of the brand or intellectual property,” Ohabunwa said.
It is also being advocated that NAFDAC accepts the use of manufacturer identification numbers for contract manufacturing.
