How Nigerian drug makers can achieve supply chain efficiency

Nigeria’s healthcare system is hard hit by a number of challenges, ranging from poor funding to inadequate infrastructure and policy flip-flops.

The effect of these handicaps is high rate of preventable deaths, especially among the vulnerable—women, children and the aged.

The major, and often ignored, part of the healthcare system is the supply chain system, which determines whether drugs produced by over 120 pharmaceutical companies in Nigeria get to the patients or not.

According to the Council of Supply Chain Management of the United States, efficient supply chain management boosts consumer confidence, reduces operating costs and improves financial position.

These advantages are often lacking in the country’s health care value chain, resulting in preventable deaths of one million children annually to lack of access to basic medicines, expert say.

At the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN) Forum held in Abuja last Thursday, healthcare professionals suggested that realising supply chain efficiency would include harnessing public-private sector partnership, policy consistency, better engagement with the World Health Organisation (WHO) and a clear import strategy.

Okey Akpa, chairman, PMG-MAN, said no country could achieve supply chain efficiency in drug distribution when its local manufacturing companies were facing challenges threatening to shut them down.

“Unless a country becomes self-sufficient in medicines production, it is vulnerable. For us, policy consistency is what we are asking for,” Akpa said.

The 15 member states of the Economic Community of West African States (ECOWAS) agreed in June 2015 to implement the Common External Tariff (CET) for the first four years, with a view to harmonising tariffs within the sub-region to achieve better inter-trade relations.

However, the CET provides for five to 20 percent tariff for importation of pharmaceutical raw materials and excipients but allow finished medicines to enter into any country in the sub-region at no duty.

“This threatened to wipe us out until the 2016 Fiscal Policy, which changed the dynamics,” he said.

According to Akpa, lack of political will and inadequate focus were also affecting the pharmaceutical industry negatively.

“It’s high time an industry like pharma was taken out and seen as a critical industry. Generic molecules manufactured locally have been proven to be cheaper and more effective,” he explained.

“We have been requesting a special pharma fund. Countries like Ghana are strategising and making funds available to manufacturers but we are yet to do so,” he explained.

The 2016 Fiscal Policy reversed the CET anomaly by placing duties on four categories of imported medicines. Recently, the Federal Government approved three Executive Orders, with a view to ensuring that government ministries, departments and agencies buy at least 40 percent of local drugs.

“We need to talk about how the Executive Order will be monitored so that government directives will not be jettisoned. We need to have an import strategy. What we are saying is, hand over importation to those who are already manufacturing medicines. That means they have plans to start manufacturing the drugs. When you hand importation to those who are not manufacturing and have no plan to do so, you are discouraging local manufacturing,” he said.

Nigeria’s drug makers are hit by importation of cheaper brands, some of which are fake and substandard. More than 50 percent of manufacturing inputs are imported as the country does not have functional petrochemical plants.

Muntaqa Umar-Sadiq, MD/CEO, Private Sector Health Alliance of Nigeria (PHN), said there was a need to create an enabling environment for local manufacturers through effective supply chain management.

“At the heart of this vision is the Africa Resource Centre, which is targeted at mobilising the private sector and the academia to complement other actors currently supporting the public health supply chain, to accelerate and sustain improvement in key supply chain outcomes,” Umar-Sadiq said.

He stated that ARC Nigeria was founded by Private Sector Health Alliance of Nigeria in partnership with the Bill and Melinda Gates Foundation (BMGF) to serve as an independent advisor and strategic partner to provide technical and strategic support to the Federal Ministry of Health, state ministries of health, donors, and implementing partners in Nigeria, adding that PHN represented the country’s foremost private sector platform established to complement efforts targeted at accelerating improvement in health outcomes.

On his part, Usman Yusuf, executive secretary, National Health Insurance Scheme (NHIM), called for partnership between drug makers and his agency to widen health insurance coverage.

Yusuf said the only to ensure efficiency in drug distribution was to see a good healthcare system as a human right and a tool for poverty alleviation.

“Our health insurance coverage is still very low. And we need partnership with all the stakeholders to ensure the insurance scheme is implemented at all levels,” he said.

Aliko Dangote, president of Dangote Industries Limited, who was represented by Azuka Okeke, country lead, ARC, said logistics was the biggest challenge facing manufacturers after energy problem, stressing the need for synergy to save costs.

“How do we partner with the government in such a way that it brings returns on investment?” Dangote asked.

“As pharmaceuticals, we should not all bid for the same contract. We need to create efficiency in warehousing,” he said.



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