SPOTLIGHT: What is MediPool, FG’s initiative to lower the cost of essential medicines?

On the same day that United States (US) President Donald Trump signed an executive order that could raise the cost of prescription drugs for Nigerians, the Federal Executive Council (FEC) approved the establishment of MediPool, a purchasing organisation.

While this approval appeared to be a response to the Trump order, it was purely coincidental.

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Speaking on Monday, the Minister of Health and Social Welfare, Ali Pate, said the organisation would offer competitive pricing and supply essential medicines and healthcare products across Nigeria.

He said MediPool would function as a public-private partnership, leveraging the Federal Government’s significant purchasing power to negotiate better prices from suppliers.

Prior to this development, there were concerns that the Trump order — aimed at lowering the costs of prescription drugs for American consumers — could have unintended consequences for countries like Nigeria, potentially driving up the cost of prescription medicines locally.

File photo of an FEC Meeting. The council approved MediPool to lower costs of essential medicines for Nigerians

However, many Nigerians will hope that the MediPool initiative helps keep prices lower and more stable amid the uncertainties triggered by the US president’s action.

What will MediPool do for medicine costs in Nigeria?

MediPool will be established through the Federal Government’s Basic Healthcare Provision Fund and, eventually, through federal tertiary hospitals.

Pate said it will utilise the monopsony power of government as a large buyer of these commodities to negotiate lower prices and then channel those commodities accordingly.

“The scope includes procurement planning, distribution monitoring, supply chain and logistics management, quality assurance, regulatory compliance, as well as ensuring that local manufacturers are supported,” the health minister said.

“It also covers import substitution, financial management and payment systems, capacity building and training, and contingency planning to ensure the steady availability of essential drugs through public-private partnership.”

He said MediPool has been vetted by the Infrastructure Concession Regulatory Commission and benchmarked against other global group purchasing organisations in Kenya, South Africa, Singapore, Saudi Arabia, and several other countries.

“We believe that this is a major intervention that will shape the domestic market so that the demand for quality pharmaceuticals can be channelled in a way that lowers cost, improves quality, and stimulates local manufacturing,” Pate stated.

The minister noted that for almost a year and a half, the government had been exploring various strategies to reduce the costs of pharmaceutical products, as Nigerians have been severely impacted by rising prices.

“It’s not limited to Nigeria. As you may be aware, even countries as far away as the United States are issuing executive orders to reduce the cost of pharmaceuticals,” he added, referring to Trump’s executive order.

What does the Trump executive order do?

Trump said the goal is to address the disparity whereby Americans often pay significantly more for the same drugs compared to other developed nations such as Sweden, Canada, and Japan — a situation he described as unfair, given pharmaceutical companies’ claims of funding research and development through US prices.

US President Donald Trump signs an executive order in the Oval Office at the White House on Inauguration Day in Washington, DC, on January 20, 2025. The order came on the same day FEC Meeting approved MediPool to lower costs of essential medicines for Nigerians (Photo: Carlos Barria/Reuters)

For instance, a drug like Eliquis, a top-selling blood thinner, has a US list price of $606 for a month’s supply but costs $114 in Sweden and $20 in Japan. Under the MFN (Most Favoured Nation) policy, Medicare could negotiate prices closer to these lower figures, significantly reducing US expenditure.

Considering Nigeria imports over 70 percent of the medicines consumed in the country — with medicines accounting for perhaps $4 billion within the country’s total healthcare spend of $10 billion — a price hike by pharmaceutical companies would have serious implications for medicine costs in Nigeria.

Despite Nigeria investing in local pharmaceutical manufacturing to reduce reliance on imports, the local industry still meets only about 25 percent of domestic demand, leaving Nigerians vulnerable to global price fluctuations and foreign exchange volatility.

The US policy may also trigger supply chain disruptions. If drugmakers reduce production of certain medicines due to lower profits, global shortages could emerge, increasing prices for generics and essential drugs — particularly those for HIV, tuberculosis, and malaria — in Nigeria, which heavily relies on imports.

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While it is currently unclear when MediPool will commence operations, the Federal Government will be hoping that the US policy does not adversely affect Nigerians’ ability to access essential medicines in the interim.

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