Legal & Regulatory > Nigeria > Regulatory, Pricing and Reimbursement Overview: Nigeria

The key facts about regulation, pricing and reimbursement in Nigerian Pharma. Prepared in association with Olaniwun Ajayi LP, a leading law firm in Nigeria, this is an extract from The Pharma Legal Handbook: Nigeria, available to purchase here for USD 99.

1. What are the regulatory authorities with jurisdiction over drugs, biologicals, and medical devices in your country?

The regulatory authorities with jurisdiction over drugs, biologicals and medical devices in Nigeria are: (i) The National Agency for Food and Drug Administration and Control (NAFDAC); (ii) The National Drug Law Enforcement Agency (NDLEA); and (iii) The Federal Ministry of Health.

2. What is the regulatory framework for the authorization, pricing, and reimbursement of drugs, biologicals, and medical devices?

The regulatory framework for the authorization of drugs, biologicals and medical devices is the National Agency for Food and Drug Administration and Control Act Cap N1 LFN 2004 (the NAFDAC Act). The NAFDAC Act empowers NAFDAC to regulate and control the manufacture, importation, exportation, distribution, advertisement, sale and use of food, drugs, cosmetics, medical devices, bottled water and chemicals.

NAFDAC has also issued various guidelines which supplement the NAFDAC Act.

As regards pricing and reimbursement of drugs, biologicals and medical devices, there is currently no fixed mechanism in place for drug price control or reimbursement in Nigeria.

3. What are the steps to obtaining authorization to develop, test, and market a product?

The process to development, test and marketing of products is regulated by NAFDAC through the NAFDAC Act and Guidelines made pursuant to it.

The NAFDAC Guidelines for Clinical Trial Application in Nigeria (NAFDAC Clinical Trial Guidelines) provides to the effect that no person shall commence a clinical trial or cause a clinical trial to be commenced or conduct a clinical trial, unless a written authorization in relation to the clinical trial has been granted NAFDAC.

The relevant application form for obtaining the authorization is available on the NAFDAC website (http://www.nafdac.gov.ng/). The NAFDAC Clinical Trial Guidelines provides detailed information on documents and information required for the application.

The accompanying documents for the application include but are not limited to the following: Informed Consent Form; Evidence of Accreditation of Ethics Committee by the National Health Research Ethics Committee; Ethics Committee Approval from participating centers; Minutes of Meeting held to approve the protocol and Informed Consent Form by the Ethics Committee; and Evidence of insurance cover for the trial participants.

Marketing of a product in Nigeria entails the registration of the product with NAFDAC; the advertising and labelling of the product.

For the purpose of registration, it is important to note that where the manufacturer is a foreign entity, a Power of Attorney, authorizing a local agent in Nigeria, to submit the application on its behalf would be required. The Power of Attorney must be valid for at least five (5) years and notarized by the Notary Public in the country of manufacture.

As it relates to advertisement of the products in Nigeria, the manufacturer must ensure an advertisement approval is obtained from NAFDAC, as well as a vetting approval from APCON prior to airing of the advert. Failure to obtain the necessary approvals may result in liability for the manufacturer.

In relation to labelling of a product, NAFDAC is required to first approve the label or artwork of the product before an application for its registration is submitted. Labelling is regulated by the relevant NAFDAC guidelines on the registration of medicine or medical device in Nigeria and is easily accessible on the NAFDAC website.

4. What are the approximate fees for each authorization?

Fees/Tariffs for different applications differ. The fees are set out in the NAFDAC Guidelines for the product type/category sought to be registered.

5. For how long are marketing authorizations/registrations valid? How are marketing authorizations/registrations renewed?

Once the application for the registration of a product is successful, NAFDAC issues a Certificate of Registration to the successful applicant. The registration of a product shall, unless cancelled earlier, be valid for a period of five (5) years and may be renewed for the same period.

An application for renewal of product registration certificate shall be made on the applicant’s letterhead addressed to Director of Registration and Regulatory Affairs Directorate at NAFDAC. The application is to be accompanied by supporting documents and evidence of payment of prescribed fees.

6. How does the authorization process differ between brand-name products and generic products? Are there differences for local manufacturers versus foreign-owned manufacturers?

The application for registration of a brand name and generic product can be done through a single application process. The NAFDAC Guidelines for Registration of drugs, medical devices or other regulated products (be it imported or locally manufactured) prescribe the application process and supporting documents for the application and the guidelines is available on the NAFDAC website.
There is a requirement that the written application for registration of a product contains both the generic name and the brand name of the product (where it is applicable).

Further, the application process is slightly different for foreign manufacturers. A foreign manufacturer would in addition to documents required from a local manufacturer be required to provide the following:

• a Power of Attorney, authorizing a local agent in Nigeria, to submit the application on behalf of the foreign manufacturer. The Power of Attorney must be valid for at least five (5) years and notarized by the Notary Public in the country of manufacture;
• evidence that the foreign manufacturer is licensed to manufacture the product for sale in the country of origin;
• evidence from the competent Health Authority in the country of manufacture that the sale of the product does not constitute a contravention of the drug laws of the foreign country;
• the current Good Manufacturing Practice (GMP) of the manufacturing facility which must be authenticated by the Nigerian Embassy in the country of origin. In countries where no Nigerian Embassy exists, any Commonwealth or ECOWAS country can authenticate the document; and
• a Letter of Invitation for GMP Inspection of the factory where the products are being manufactured.

7. How are combination products (drug + drug, drug + biologic, drug + device, biologic + device, drug + biologic + device) regulated?

In Nigeria, the registration or the consideration for registration of combination drug products are prohibited by NAFDAC unless where there is proven scientific documented evidence that such product has clinical advantage over the single drug available for the same indication(s) (Clause 10.2 of the NAFDAC Guidelines for Registration of Imported Drug Products in Nigeria).

Where registration is permissible for the combination products, the general procedure for registration of drugs with NAFDAC (as highlighted above) will apply.

8. How is compliance with regulations monitored and evaluated? Is the regulatory regime comparable with the U.S. Food and Drug Administration or the European Medicines Agency expectations and requirements?

Compliance with regulation is monitored by the Investigation and Enforcement Directorate (the Directorate) of NAFDAC. It is a department of NAFDAC charged with the responsibility of ensuring compliance with NAFDAC’s mandate on regulatory activities.

The Directorate receives and investigates complaints and carries out/supervises the destruction of defective, dangerous, fake, counterfeit, substandard, expired, adulterated and/or unwholesome NAFDAC regulated products.

9. What is the potential range of penalties for noncompliance?

Section 25 of the NAFDAC Act provides for penalties for non-compliance with provisions of the Act. It provides that where there is a contravention of any NAFDAC Regulation (whether for registration, advertising, etc.), the person who contravenes shall be guilty of an offence and liable on conviction to the penalties specified in the regulation. However, where no penalty is specified in the regulation, the person shall be liable to a fine of ₦50,000 or imprisonment for a term of one year or both.

Further, where the offence is committed by a body corporate and it is proved to have been committed with the consent or connivance of, or to be attributable to a neglect on the part of any director, manager, secretary or other similar officer of the body corporate or any person purporting to act in any of those capacities, such person as well as the body corporate shall be guilty of the offence and liable on conviction to a fine of ₦100,000.

10. Is there a national healthcare system? If so, how is it administered and funded?

In Nigeria, national healthcare system is regulated by the National Health Insurance Scheme (NHIS or the Scheme). The aim of the Scheme is to attract more resources to the health care sector and improve access and utilization of healthcare services.

Contributions to the Scheme are voluntary/optional, and all contributions are required to be paid into the account of the health-insured’s chosen Health Maintenance Organisation (HMO).

The mode of funding or contribution to the Scheme is dependent on the programme in which the enrollee has signed up to. The three programmes available under the Scheme are: (i) Formal Sector Health Insurance Programme; (ii) Informal Sector Health Insurance Programme; and (iii) Vulnerable Group Health Insurance Programme.

It is noteworthy that funds in the formal sector are generated by pooling the contributions of employees and employers. The formal sector consists of the federal, state and local government, the organized private sector (which is a company with 10 employees and above), armed forces, police and uniformed services.

11. How does the government (or public) healthcare system function with private sector healthcare?

Currently the government (public) healthcare system functions completely separate from the private sector healthcare.

12. Are prices of drugs and devices regulated and, if so, how?

In Nigeria, pricing of drugs is not regulated; the price of a drug or device is not required by NAFDAC for the grant of market authorization/registration. Also, there is currently no pricing regulation in the country which defines maximum or minimum profit margins for both wholesale and retail medicines.

13. How are the drugs and devices used by patients paid for? What roles do public and private payers play?

In Nigeria, the public health system in some states provide medicines at no cost to the patients for certain conditions including malaria, tuberculosis, HIV/AIDS and expanded program on immunization vaccines for children.

In the private healthcare sector, the patients either pay for the treatment themselves or where they have health insurance, the insurer covers the treatment depending on their policy coverage. Some patients may however have to pay for a part of the cost of their treatment despite having health insurance as a result of their insurance policy not covering all or certain aspects of their treatment.

14. Who dispenses drugs and devices to patients and how are those dispensers compensated?

Only duly licensed pharmacists in Nigeria have the authority to supply, sell and dispense drugs to the public (Section 14(3) of the Pharmacists Council of Nigeria Act 1992). The sale of drugs shall take place in premises licensed for the purpose, which shall be subject to regular inspection by the pharmaceutical inspectors of the Pharmacists Council of Nigeria.

Nevertheless, it is permissible for certain over-the-counter drugs to be sold in patent medicine stores (commonly known as chemists in Nigeria) operated by Patent and Proprietary Medicine Vendor’s Licensees, particularly in areas where there are no licensed pharmacists in practice.

The premises for the sale of such drugs shall be approved and licensed and shall be subject to periodic inspection.

Compensation of pharmacists is done in accordance with their respective contracts of employment and the conditions contained therein.

15. What are the professional and legal responsibilities of those who dispense drugs and devices? What role do they play in providing patient care, information, and safety?

Pharmacists have specific professional and legal responsibilities which is required in terms of the Pharmacists Council of Nigeria Act 1992 and the Code of Ethics for Pharmacists in Nigeria. One of these is the requirement to be registered with the Pharmacists Council of Nigeria and to obtain a practicing licensing for the practice of pharmacy and dispensing of medications in Nigeria.