Nigeria's Plans to Accelerate Investments in Production of Health Products

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Tuesday, September 29, 2020 / 09:46 AM / OpEd by Abiodun Awosusi / Header Image Credit: Abiodun Awosusi

 

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Nigeria launched an Economic Sustainability Plan (ESP) in June 2020 as a one-year bridge plan beyond the Economic Growth and Recovery Plan (ERGP 2017 - 2020). With funding mainly from domestic sources, the plan aims to limit the health and socio-economic impacts of the coronavirus pandemic. It precedes a new national development policy which could be launched within the few months. Although there is limited evidence of the impact of the EGRP across sectors particularly health sector, it is important to analyze the implications of the new plan for health stakeholders in the public, private and social sectors. This analysis also allows citizens to understand how government's plans can influence progress in the pharma market.

 

The plan aims to sustain businesses throughout the COVID-19 crisis and create new jobs. Its interventions cut across agriculture, trade and services - which contribute significantly to Nigeria's Gross Domestic Product. The plan includes targeted support to micro, small and medium-sized enterprises (MSMEs), investment in digital infrastructure and expansion of the social protection programme for the poor and vulnerable. The interventions are ambitious. It is unclear if all of them will be fully operational within the 12-month implementation timeframe. However, they provide guidance during this transit period and a glimpse into key principles that will guide the successor plan.

 

The health component of the plan includes immediate investment in response to COVID-19, epidemic preparedness, funding for research and development (R&D) as well as increase in health access. The specific interventions include adequate financing of the preparedness and response plan with health insurance coverage for health workers. Ongoing investments in healthcare infrastructure at national and subnational levels is expected to shape additional health financing in the post-COVID era through statutory health allocations and the Basic Healthcare Provision Fund.

 

Investments in R & D

A prominent objective for the health sector in the ESP is to galvanize investments from domestic and external sources to make Nigeria a hub for production of health products. The plan includes a special intervention fund to promote R&D as well as local production of medical supplies and pharmaceutical products. It encourages public and private agencies to patronize local manufacturers and provides a special tariff regime for imported manufacturing inputs. The National Agency for Food and Drug Administration and Control is mandated to reduce product registration fees and waive product license fees. The Central Bank of Nigeria launched the Healthcare Intervention Fund to provide credit to functional health enterprises at low interest rate. The plan also highlights a programme to commercialize research outputs from federal research institutes.

 

The implementation of the health plan requires a multisectoral approach and review of existing policies. One entry route is the ongoing strategy development effort by the National Institute for Pharmaceutical Research and Development. The proposed 5-year strategic plan is expected to cover 2020 - 2025, and align pharmaceutical transformation objectives in the National Strategic Health Development Plan II with continental and global realities. This process offers timely opportunity for researchers, policy makers, business leaders and civil society to shape the future of pharmaceutical R&D in a coherent way. Even with a transition in federal government, the strategic plan can be a flexible roadmap for pharma sector transformation with focus on areas of comparative advantage for Nigeria in continental and global value chains. A related route is to sustain broad support for private sector players like 54Gene - an innovative R&D enterprise working on genomic technologies for Africans.

 

A Growing Pharma Market

According to McKinsey, Nigeria's pharma market is expected to be worth $3.6 billion by 2026 - with most of the value concentrated in urban areas. Africa's pharma market is currently worth about $50billion with potential for significant increase within the next decade as plans for an integrated continental market evolves. With endemic infectious diseases like malaria, and the rise in the incidence of non-communicable diseases, access to high-quality, affordable drugs is important for the populace. As health insurance coverage expands through social and private health insurance schemes, it becomes inevitable to have safe and effective drugs especially generic medicines.

 

The ESP thus aligns with the growing movement to increase local production of health products at regional and continental levels. The Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property provides a framework for investments in pharmaceutical innovations and intellectual property protection. The African Union Pharmaceutical Manufacturing Plan for Africa actively encourages production of pharmaceutical products hinged on ample investments, strategic partnerships and human capital development. The coronavirus pandemic underscores the urgent need for implementation of these plans especially production of generic medicines and medical supplies. The NIPRD plan helps to bring relevant evidence and lessons from other countries to bear on Nigeria’s long journey toward sustainable production of health and pharmaceutical products.

 

Sustaining Momentum for Progress

There is an opportunity to match increased R&D investments and local production with improvement in the supply chain. Although the main distributors of medicines in Nigeria sell through formal channels, the retail and distribution network is largely informal and fragmented. This leaves room for distribution and sale of fake and substandard products which endanger lives. The good news is that integrated retail platforms like HealthPlus, and digital pharma enterprises such as DrugStoc, RxAll and MedSaf are working with regulators in deploying useful tools to ensure access to safe drugs for health facilities and patients. In addition, the African Resource Centre for Supply Chain in Nigeria uses evidence from sector diagnostics to advocate for better supply chain systems and investments. At the continental level, the African Union-backed African Medical Supplies Platform is an innovative platform that facilitates pooling for purchasers, manufacturers and suppliers of health products.

 

Despite the promise of local production, pharmaceutical manufacturing is a long-term venture that requires large financial and technical investments within a conducive business environment. Government agencies, private sector players such as the Pharmaceutical Manufacturing Group of the Manufacturers Association of Nigeria, the Association of Industrial Pharmacists of Nigeria; the Pharmaceutical Society of Nigeria, Digital Pharma Enterprises and similar groups have important roles to play to ensure government's interest translate into sustainable pharmaceutical manufacturing and deployment of adequate resources and digital tools across the pharma value chain. Nigeria's socioeconomic realities are daunting but recent business, tax and regulatory reforms could help to make the business climate better for health enterprises. While a one-year ESP is insufficient to sustain the momentum for progress in the pharma sector, the longer health sector and NIPRD strategic plans can fast track sectoral transformation that contributes to improved health and wellbeing for Nigerians. And more than developing plans, implementation is vital.

 

About the Author

'Biodun Awosusi is a health economist at Health Systems and Development Enterprise. He is a TEDMED2020 Research Scholar and MIT Technology Review Global Panel Member. Previously, he was health financing advisor at Clinton Health Access Initiative; research consultant on the Bill and Melinda Gates Foundation-funded Learning for Action across Health Systems at Oxford Policy Management; advocacy manager at ACF International; and technical officer on the USAID-funded Program to Build Leadership and Accountability in Nigeria's Health System. He was the Nigeria Coordinator of the multi-country Rockefeller Foundation-funded Health for All Campaign for Universal Health Coverage in 2014. 'Biodun holds master's degrees in International Health (University of Oxford) and International Management (University of Liverpool) with a bachelor's degree in medicine and surgery from Obafemi Awolowo University. 

 

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Related Links

  1. Nigeria's Economic Sustainability Plan 2020 In Response to COVID-19
  2. CBN Releases Healthcare Research and Development Grant Guidelines

 

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