Waivers boost pharma gains but medicine remains costly

Nigeria’s pharmaceutical manufacturers are finally seeing a silver lining in their balance sheets, but for the average patient at the pharmacy counter, the relief remains invisible. While federal tax waivers have successfully padded the profit margins of local drugmakers, retail medicine prices continue to climb, pushing essential healthcare further out of reach for millions.

In June 2024, President Bola Tinubu signed an executive order, removing tariffs, excise duties and Value Added Tax (VAT) on pharmaceutical machinery and raw materials. The policy, which took effect on October 11, 2024, for a two-year period, was designed to reduce production costs, stimulate local drug manufacturing and make medicines affordable for Nigerians.

The incentives, which covered syringes, needles, long-lasting insecticidal nets and rapid diagnostic kits, followed the exit of several multinational pharmaceutical firms from Nigeria, hiking the cost of medicines in the country.

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Data from the federal ministry of health show that at least 43 pharmaceutical companies have benefited from the incentives, while analysis of the financial performance of other pharmaceutical firms in Nigeria indicates an increase in profit.

Neimeth International Pharmaceuticals Plc and Fidson Healthcare reported that the implementation of the incentives helped to reduce production costs and accelerate organisational growth. Neimeth reverted from losses to profitability, with revenue rising by 64 percent from N4.49 billion in 2024 to N7.37 billion by the end of 2025.

Similarly, Fidson Healthcare Plc, one of Nigeria’s largest listed pharmaceutical manufacturers, reported a 61 percent increase in profit after tax to N9.31 billion in 2025.

But the policy is yet to translate into lower drug prices for consumers. BusinessDay surveys of some pharmacy outlets revealed that the cost of essential medicines has risen over the past two years, with prices ranging from 11 percent to as high as 190 percent between 2024 and 2026. For instance, in 2024, a strip of ten 500-milligram tablets of paracetamol sold between N150 and N300. By 2026, the same product sells between N1,900 and N2,500, depending on the brand and pharmacy location, representing an estimated 190 percent increase.

Antibiotics have equally become more expensive. A pack of ten 500-milligram amoxicillin capsules sold for N1,500 to N2,000 in 2024. By 2026, pharmacy prices ranged from N3,000 to N3,700, representing an uptick of 91 percent.

Malaria medication has experienced similar increases. Artemether-lumefantrine sold between N1,200 and N3,800 per treatment pack in 2024. By 2026, retail prices ranged roughly from N3,000 to N8,500, indicating a price adjustment of 130 percent. Artequick tablets, which sold between N3,000 and N13,000 in 2024, now cost between N5,000 and N14,500. Coatem prices increased from N3,500–N10,000 to roughly N5,000–N10,000.

Anti-infective medicines have followed the same trajectory. Metronidazole sold for around N300 to N600 per strip of tablets in 2024. By 2026, the same medicine hiked to N900 and N1,500 — a 167 percent increase.

The rising cost is also affecting patients managing long-term illnesses. Prices of hypertensive drugs such as Lebatalol and Natrilix have increased sharply, with Lebatalol rising from about N5,000 per sachet to N8,500, while Natrilix now sells for N19,200. Amlodipine prices climbed from roughly N3,000 to N5,000.

The cost of managing diabetes has equally escalated. Insulin, a life-saving medicine for people living with diabetes, sold for N19,000 to N24,000 in 2024. By 2026, prices ranged from N24,000 to as high as N50,000.

Lamenting the cost of medicines, a worker at a local pharmacy in Lugbe, Abuja, said rising prices are impacting patient behaviour. He explained how several customers often reduce prescribed medication or opt for cheaper brands due to cost.

“Some customers come in, and when you give them the cost of their total medication, they end up dropping some or opt for cheaper brands”, he said.

Speaking to BusinessDay why the cost of medicines have remained high, Lanre Shittu said the cost of manufacturing has remained high due to high energy costs, logistics and limited infrastructure.

He also cited persistent difficulties in accessing affordable financing and loans with affordable interest rates.

Ignatius Anukwu, former president of the Association of Industrial Pharmacists of Nigeria, said the tax waivers apply primarily to raw materials used by local manufacturers, which account for only about 30 percent of Nigeria’s drug supply.

“Raw materials are only a component of what determines the price of the product,” Anukwu said, noting that the policy’s impact on retail medicine prices may therefore remain limited.

Read also: FG to collaborate with pharmaceutical society on drugs production – Akume

The National Agency for Food and Drug Administration and Control estimates that Nigeria imports around 70 percent of its medicines or pharmaceutical inputs, making it vulnerable to foreign exchange costs.

Shittu, however, noted that the incentives provided measurable cost savings, particularly for his company, which imports raw materials and manufacturing equipment.

“In our medical device company, we saved N342 million three months after the waiver was implemented,” he said.

Stakeholders agreed that, in addition to the incentives, the government should address the barriers to manufacturing with maximum impact.