To crash prices of Drugs, Healthcare Customs Implements Zero Duty on Pharmaceuticals

The Nigeria Customs Service (NCS) has taken steps to drive down cost of healthcare by implementing zero-tax policy on imported pharmaceutical inputs for a period of two years.

This move is a direct result of President Bola Tinubu’s approval of comprehensive guidelines aimed at enhancing local healthcare manufacturing, reducing production costs, and attracting investments.

The policy, which has been in the works for nearly a year, is a response to the growing concern of “drugflation” in Nigeria, where the rising costs of medications have made it increasingly difficult for citizens to access essential healthcare services.

By exempting critical raw materials such as Active Pharmaceutical Ingredients (APIs), excipients, and other essentials used in producing medicines, long-lasting insecticidal nets, rapid diagnostic kits, reagents, and packaging materials from import duties and Value Added Tax (VAT), the government aims to reduce the financial burden on local manufacturers and ultimately make medicines more affordable for consumers.

The exemption of these critical raw materials from taxes is expected to have a significant impact on the healthcare sector.

APIs, for example, are the active ingredients in medicines that provide the therapeutic effect, and their high cost has been a major contributor to the rising cost of medicines in Nigeria. By removing the tax burden on these ingredients, local manufacturers will be able to produce medicines at a lower cost, which will ultimately benefit consumers.

The policy is also expected to attract investments in the healthcare sector, as foreign companies will be more likely to invest in Nigeria’s pharmaceutical industry due to the favorable business environment.

This will lead to the creation of jobs, improvement in the quality of medicines, and increased access to essential healthcare services.

Furthermore, the policy will also support the local production of long-lasting insecticidal nets, which are critical in the fight against malaria, a major public health challenge in Nigeria. The exemption of raw materials used in the production of these nets from taxes will make them more affordable and increase their availability, ultimately leading to a reduction in malaria-related deaths and illnesses.

The implementation of this policy is a significant step towards addressing the issue of “drugflation” in Nigeria, and it demonstrates the government’s commitment to supporting the healthcare sector.

The move is expected to have a positive impact on the economy, as a healthy population is more productive and contributes to the overall growth and development of the country.

However, the success of this policy will depend on effective implementation and monitoring. The government must ensure that the benefits of the policy are passed on to consumers and that local manufacturers do not take advantage of the tax exemption to increase their profit margins.

Additionally, the government must also ensure that the policy does not lead to abuse, such as the diversion of tax-exempt raw materials for non-pharmaceutical uses.