THE Nigerian government has approved the establishment of MediPool, a new group purchasing organisation that will guarantee a reduction in the costs of drugs and other medical consumables in Nigeria.
According to the Coordinating Minister of Health and Social Welfare, Professor Ali Pate, the approval was made during the Federal Executive Council meeting chaired by President Bola Tinubu at the State House in Abuja on Monday, May 12.
Pate described MediPool as an organisation that would facilitate competitive pricing and act as a supplier of essential medicines and healthcare products nationwide.
He explained that the initiative was designed to consolidate demand from basic healthcare centres and federal tertiary hospitals, allowing the government to leverage bulk purchasing to reduce medical costs.
“Today, council approved Medipool; it’s a group purchasing organisation for competitive pricing and to be supplier of essential medicines and healthcare products across Nigeria, through the Federal Government’s intervention, the basic health care provision fund, but also eventually outside that, through federal tertiary hospitals, so that as a buyer, we can negotiate lower prices.
“So, it’s using the monopsony power of the government as a large buyer of those commodities, negotiating lower prices and then channelling those commodities,” he said.
The minister said the scope of MediPool includes procurement planning, distribution monitoring, supply chain management, logistics coordination, quality assurance, and regulatory compliance.
He stressed that the development also aimed at supporting local manufacturers, encouraging import substitution, and including financial management, payment systems, capacity building, training, and contingency planning to ensure a continuous supply of high-quality, affordable essential drugs through a public-private partnership.
The minister noted that MediPool was developed using models from similar initiatives in countries like Kenya, South Africa, Singapore, and Saudi Arabia.
He stressed that the administration was committed to enhancing local manufacturing, promoting import substitution, and ensuring that Nigerians could access high-quality, affordable medications.
“Medipool has been vetted through the Infrastructure Concession Regulatory Commission, has been benchmarked with other global group purchasing organisations, including Kenya, South Africa, Singapore, Saudi Arabia and many other countries.
“We believe that this is a major intervention that will shape the domestic market, allowing demand for quality pharmaceuticals to be channelled in a way that lowers costs, improves quality, and stimulates local medical manufacturing,” Pate noted.
The development came a few weeks after the Nigeria Customs Service said it had commenced the implementation of Value Added Tax (VAT) and import duty exemption on raw materials essential for the production of pharmaceutical products.
The NCS spokesperson, Abdullahi Maiwada, in a statement on March 26, noted the decision was in line with the presidential order to boost local production of healthcare products.
The ICIR reports that Tinubu had, in June 2024, signed the Executive Order to increase local production of pharmaceuticals, diagnostics and medical devices.
Nigeria’s decision to crash drug prices came hours after the United States (US) President Donald Trump signed an executive order aimed at significantly reducing the prices of prescription drugs in the US.
In a statement on Sunday, May 11, via its TruthSocial handle, Trump said the move would lower drug prices between 30 per cent and 80 per cent, and address what he described as a long-standing disparity in global medication costs.
Trump criticised the high cost of prescription drugs in the US compared to other countries, noting that medications produced in the same laboratories and by the same companies are often five to ten times more expensive for Americans.
Usman Mustapha is a solution journalist with International Centre for Investigative Reporting. You can easily reach him via: umustapha@icirnigeria.com. He tweets @UsmanMustapha_M