News Analysis.
By Wahab Shittu, SAN, (Ph.D).
NIGERIANS have generally been thrown into more hardships healthwise since the American Government under Mr. Donald Thrump stopped the financing of USAID to all countries including Nigeria. This action has created unexpected problems especially in the health sector as aid to this sector is no longer available and majority of the drugs and medicines used by our health institutions and pharmaceutical outlets are imported with the prohibitive prevailing foreign exchange rate. It is in response to this unfortunate development that the Nigerian government introduced several initiatives to reduce the cost of medicines in the country.
Key plans include:
• Rejuvenating Local Pharmaceutical Industry: The government aims to boost local production of medicines, making them more accessible and affordable. This move is expected to reduce dependence on imported drugs, which are often more expensive due to foreign exchange rates.
• Executive Order to Lower Drug Prices: The government plans to issue an executive order to control and lower the cost of essential pharmaceutical medications. This order aims to enable local manufacturers to survive, thrive, and deliver life-saving commodities.
• Presidential Initiative to Unlock Pharmaceutical Value Chain: Launched in October 2023, this initiative focuses on stimulating local manufacturing, improving access to quality pharmaceuticals, and reducing costs. The government is working with the private sector to finalize an instrument addressing fiscal policy constraints for raw materials and manufacturing equipment.
• Procuring Essential Medicines: The government has announced efforts to procure essential medicines to address rising costs of medications and healthcare products. This move aligns with the Universal Health Coverage (UHC) objective of reducing the financial burden associated with health services.
• Expanding Health Insurance: The government is working to reform the health insurance landscape, believing that an expanded National Health Insurance Scheme would enable millions of Nigerians to access healthcare services, including essential medicines, without bearing the full cost.
Challenges and Potential Impact:
• Devaluation of Naira: The high exchange rate has made procurement of raw materials and equipment imported for production extremely high, contributing to the current high cost of medicines.
• Long-standing Healthcare Financing Issues: Affordability of healthcare financing in Nigeria has been a long-standing issue for over 40 years, with less than 10% of Nigerians having health insurance or any issuance.
• Potential Benefits: If successful, these initiatives could make medicines more affordable, reduce dependence on imported drugs, and contribute to the growth of the local pharmaceutical industry.
• It is our contention that in as much as the government policy on cheap medicines in Nigeria is good and in the right direction if implemented with vigour, we suggest that the agency charged with the regulatory framework should be energised monitor and enforce the smooth implementation of the scheme so that many people will actually benefit to access the medicines.
• Reacting on the policy, a Lagos-based medical practitioner and social commentator Dr. Waheed Shoyembo, said the plans of the government to make medicines cheaper to the people of this country are very commendation, especially at this time when economic hardship is becoming unbearable to Nigerians.
• To him, whatever that is done by the government to cushion the effect of the prevailing hardship will be welcomed by all, as the cost of accessing treatment in our health institutions is very prohibitive.
• Federal Executive Council (FEC), presided over by President Bola Ahmed Tinubu, approved this scheme last Monday according to the Coordinating Minister of Health and Social Welfare, Professor Muhammad Ali Pate.
• The prices of medicines have been skyrocketing in recent times as a result of naira devaluation and other variable indicators, thereby making healthcare accessibility to the poor and the vulnerable in the society unaffordable and brutish.
• But questions will arise in assessing this policy of government as to what extent will it go in comparison to what is obtainable in other climes.
• Is this a novel approach to solving non availability of cheap and affordable medicines to the people or will it end the same way most government policies are abruptly brought to an end or manifestly managed poorly by those given the responsibility to make positive change.
• Here are some guides to best practices for medicine cost reductions, whether you’re managing a healthcare facility, working in policy formulation, or just trying to stay solvent while staying alive:
Strategic best practices for reducing medicine costs:
- Promote Generic Substitution
Why it works: Generic drugs are up to 85% cheaper than branded versions.
Best Practice:
Implement policies that mandate generic prescribing when therapeutically equivalent.
Encourage bulk purchasing of generics for hospitals or national health systems. - Pooled Procurement
Why it works: Buying in bulk across regions or hospitals boosts bargaining power.
Best Practice:
Use group purchasing organizations (GPOs) or regional consortiums.
Examples: The WHO’s PAHO Strategic Fund, African Union’s AVAT for vaccines. - Essential Medicines Lists (EMLs)
Why it works: Keeps procurement and inventory focused on cost-effective and necessary drugs.
Best Practice:
Update your EML regularly to reflect current evidence and disease burden.
Prioritize cost-effective treatments over fashionable or marginally beneficial ones. - Regulate Markups and Profiteering
Why it works: Cuts down on exploitative pricing along the supply chain.
Best Practice:
Cap wholesale/retail markups via price controls.
Monitor supply chain transparency to prevent hidden costs. - Local Manufacturing and Technology Transfer
Why it works: Reduces dependency on foreign exchange and import markups.
Best Practice:
Offer incentives for domestic production of generic medicines.
Support public-private partnerships for manufacturing capacity. - Smart Formularies and Therapeutic Interchange
Why it works: Drives competition and price negotiation.
Best Practice:
Create formularies based on cost-effectiveness, not pharma influence.
Encourage therapeutic interchange with clinical decision support systems. - Use of Health Technology Assessment (HTA)
Why it works: Ensures that new drugs entering the market are worth the cost.
Best Practice:
Mandate HTA reviews before reimbursement or inclusion in public procurement.
Example: NICE in the UK, which frequently denies overpriced meds with low benefits. - Combat Irrational Use and Overprescription
Why it works: Less waste = less cost.
Best Practice:
Invest in prescriber education and auditing.
Use e-prescribing systems with built-in checks against overuse. - Incentivize Cost-Conscious Prescribing
Why it works: Doctors and pharmacists often drive unnecessary costs.
Best Practice:
Provide performance-based incentives tied to cost-saving and rational prescribing.
Monitor patterns using electronic health records (EHRs) and intervene accordingly. - Public Awareness Campaigns
Why it works: Informed patients ask for generics and resist pressure to overconsume.
Best Practice:
Use media and community outreach to promote value-based medicine consumption.
Bonus Tip: Tame the Patent Beast
Where legally viable, challenge questionable patents and utilize TRIPS flexibilities (e.g. compulsory licensing) to bypass monopolistic pricing, especially in LMICs.
Need a tailored strategy for a specific country or facility (e.g., Nigeria’s NHIA framework or HMO models)? I can break it down further.
Comparative Analysis of Medicine Costs in Côte d’Ivoire, South Africa, Nigeria, and Ghana
The cost of medicines varies across countries due to factors like local manufacturing capabilities, import dependence, currency fluctuations, healthcare policies, and government regulations. Below is a comparison of the costs of medicines in Côte d’Ivoire, South Africa, Nigeria, and Ghana.
- Côte d’Ivoire
- Overview:
Côte d’Ivoire’s healthcare system faces several challenges, including limited access to essential medicines, the prevalence of counterfeit drugs, and economic factors that contribute to high prices. - Medicine Prices:
o Prices can be higher due to the importation of most pharmaceutical products.
o There is a notable issue with counterfeit medications, which affects the market, making genuine drugs expensive and less accessible. - Regulatory Environment:
o The government does not have a fully centralized procurement system for medicines, leading to fragmented and inconsistent pricing in the market. - Key Challenges:
o Counterfeit medicines are prevalent, and many low-cost alternatives enter the market.
o Access to essential medicines is restricted in rural areas due to the high cost of imported medicines. - Typical Medicine Prices:
o Certain essential medications like antibiotics and pain relievers can cost up to 30-50% higher than in some other African countries, due to importation costs and low local production.
- South Africa
- Overview:
South Africa has a relatively well-developed pharmaceutical sector, with a regulated market for medicines and a government-led procurement system aimed at keeping prices lower. - Medicine Prices:
o Prices for medicines are controlled by the Single Exit Price (SEP) system, which regulates the cost of drugs in both the private and public sectors.
o For example, South Africa’s antiretroviral (ARV) treatment costs are among the lowest in the world due to bulk procurement and negotiations for affordable pricing. - Regulatory Environment:
o The South African Health Products Regulatory Authority (SAHPRA) oversees the regulation of medicines, ensuring that both pricing and quality standards are maintained.
o The government has adopted a centralized procurement system for key medicines, including ARVs, reducing the price per person significantly. - Key Challenges:
o In the private sector, the cost of medicines can still be high due to additional fees and markups by pharmacies and hospitals.
o Importation of specialized medications also results in price fluctuations. - Typical Medicine Prices:
o Generic medicines tend to be affordable, especially in the public health sector.
o Prices for ARVs are substantially lower, around $75 per person per year in government-funded programs.
o Common medications, like antibiotics, are comparatively cheaper than in many other African countries.
- Nigeria
- Overview:
Nigeria is the largest economy in Africa but faces significant challenges in its healthcare sector. A large portion of its medicines are imported, leading to fluctuations in drug prices due to currency depreciation and inflation. - Medicine Prices:
The cost of medicines in Nigeria has been rising dramatically, particularly since 2020. The Naira has devalued significantly, making imports more expensive.
Common medications like antibiotics, painkillers, and antihypertensive drugs have experienced price increases of up to 1000% in the last few years. - Regulatory Environment:
o The National Agency for Food and Drug Administration and Control (NAFDAC) regulates the import and distribution of medicines. However, lack of strict enforcement of pricing regulations has led to unpredictable pricing in the market. - Key Challenges:
Currency devaluation has a significant impact on the cost of imported medicines.
Inflation and poor economic conditions have compounded the cost issue.
Many Nigerians are forced to rely on out-of-pocket spending for medications, with some paying as much as 37 days’ wages for a single course of antibiotics. - Typical Medicine Prices:
Ampiclox 500mg antibiotics, for example, saw price increases of over 1,000% from 2019 to 2023.
Insulin prices have also increased by more than 30% in the past few years.
- Ghana
- Overview:
Ghana faces similar challenges to its neighbors when it comes to medicine costs, including reliance on imports and currency volatility. However, the country has made strides in improving access to affordable medicines in certain sectors. - Medicine Prices:
o Medicine costs are relatively high in the private sector, but the National Health Insurance Scheme (NHIS) helps subsidize the cost of some essential medicines. - Comparative Overview
Country Medicine Price Trends Key Factors Influencing Prices Regulation & Access
Côte d’Ivoire High prices due to imports and counterfeits Counterfeit drugs; import reliance Lack of centralized procurement; high rural cost
South Africa Controlled prices; generic drugs affordable Single Exit Price system; bulk procurement (ARVs) Regulated by SAHPRA; affordable ARVs in public sector
Nigeria Significant increases (up to 1,000%) Currency devaluation; inflation; import reliance Price fluctuations; lack of effective regulation
Ghana Moderately high, but NHIS helps reduce costs Import reliance; inflation; currency depreciation FDA regulates, but rural access issues persist
Like other West African countries, Ghana struggles with a high level of imported medicines, which can drive prices up. - Regulatory Environment:
o The Food and Drugs Authority (FDA) of Ghana regulates the pharmaceutical market, but issues like counterfeit drugs remain a concern.
o Ghana has made attempts to localize drug production, but local manufacturing is still not sufficient to meet demand, contributing to high prices for many medicines. - Key Challenges:
o The exchange rate and inflation contribute to high import costs.
o Access to medicines in rural areas can be difficult due to high prices and transportation costs. - Typical Medicine Prices:
o Essential drugs like antibiotics and antihypertensive medicines are usually slightly more affordable compared to Nigeria but still higher than in South Africa due to the reliance on imports.
Summary: - South Africa offers relatively affordable medicines due to regulation, particularly in the public health sector.
- Côte d’Ivoire and Ghana face high medicine prices due to import reliance, with issues in rural areas and counterfeits being prevalent in Côte d’Ivoire.
- Nigeria has the highest increase in medicine prices, driven by currency depreciation and inflation, affecting accessibility for many people.
Efforts to reduce medicine prices in all these countries would benefit from stronger regulatory frameworks, enhanced local manufacturing, and strategic procurement practices to reduce reliance on imports.
Having assessed this whole effort of government in reducing the costs of medicines in Nigeria and the challenges ahead of procurement and manufacturing locally, in addition to strengthening the regulatory framework, it is our view that the government should ensure that this program succeeds as it will help the people to access medi-care.
CONCLUSION
Reducing Nigeria’s dependence on imported medicines is not just an economic imperative. It is a national survival strategy that will depend on key parameters. First, by investing in local pharmaceutical manufacturing, the country can create jobs, save foreign exchange, strengthen health security, and tailor treatments to its unique disease burden. However, manufacturing alone won’t move the needle unless it is backed by strategic procurement practices that prioritize local suppliers, ensure quality, and create stable markets.
In my view, these twin strategies form a powerful engine: manufacturing builds capacity, and strategic procurement sustains it. This synergy can transform Nigeria from a passive importer into a self-reliant, export-ready pharmaceutical force, resilient in crisis, competitive in trade, and proactive in safeguarding public health.
This is the way to go.
Dr. Shittu is a Lagos-based senior lawyer and social crusader.
