Local pharmacists have been reporting unusually significant increases in the prices of drugs in recent times, and the situation, no doubt, is seriously hampering the ability of not a few Nigerians to purchase them.
However, there are different views on what is causing the increases, and what can be done to contain them.
The foregoing is as some pharmacists have attributed the challenge to soaring increases in the price of the drugs produced by top manufacturers or marketed by distributors in the country, while others are insisting that it is as a result of the continued slide in the value of the Naira.
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In fact, if there is a recent incident in the pharmaceutical sector that clearly threw light into what might have led to the unsavory market situation in the sector, it is unarguably the withdrawal of GlaxoSmithKline (GSK) from Nigeria, as the company’s exit unarguably underscores the complex operational landscape and challenges within Nigeria’s pharmaceutical business environment.
At this juncture, it is expedient to recall that on August 4, 2023, GSK Nigeria announced its decision to exit the pharmaceutical market, concluding its over 51-year presence in Nigeria.
As gathered, the decision was in response to a mishmash of challenges in the market, including foreign exchange complexities, security concerns and high operational costs.
The tactical move showcases GSK Nigeria’s pre-emptive alteration to the changing business environment. For instance, sales for GSK Nigeria in the first quarter of 2023 significantly dropped from NGN14.8bn to NGN7.8bn, reflecting heightened competition from local competitors and imports from India and China.
In fact, the competitive pressure led the company to reconsider Nigeria’s potential as a conducive business environment.
Recognising the unfavorable business climate, the board of GSK Nigeria concluded that ceasing operations was the best course of action to take.
The decision entails a shift in distribution strategy, with GSK Nigeria planning to collaborate with third-party Nigeria-based companies for the distribution of its pharmaceutical products.
The company’s plan involves presenting a scheme of arrangement to Nigeria’s Securities and Exchange Commission (SEC). Upon approval, the scheme would facilitate capital returns to shareholders.
Without a doubt, the rising cost of production of drugs across pharmaceutical companies operating in the country today might have led to the prevalence of pricey drugs in the market. It would be recalled that Pharmacists in the manufacturing sector of the Nigerian economy sometime in June 2023 expressed concerns over the potential aftermath of the removal of petroleum subsidy on local production of pharmaceutical products.
They predicted that the move will have negative impacts on both drug manufacturers and consumers, as cost of production will skyrocket, while consumers grapple will be left with limited resources to purchase products.
The pharmacists also have called for the removal of unnecessary tariffs and duties on pharmaceutical raw materials and equipment for local manufacturers, arguing that unless this is done, attaining national medicines security will continue to be a mirage.
The industry players further urged the federal government to create a special window for the pharma industry, whereby local manufacturers can receive foreign exchange at special government rates.
They noted that access to forex is especially critical for the purchase of raw materials for local manufacturing, saying inadequate access will inevitably lead to drug scarcity.
Speaking to Journalists at a media parley, the National Chairman of the Association of Industrial Pharmacists of Nigeria (NAIP), Pharm. Ken Onuegbu, emphasised the need for the new administration of President Tinubu to formulate and implement policies that will ensure that all government institutions patronise made-in-Nigeria pharma products.
Reacting to the hike in the pump price of Premium Motor Spirit (PMS), known as petrol from N184 to over N500 per litre, Onuegbu, who is also co-founder/CEO of Tricare Pharmaceuticals, an indigenous pharma manufacturing company, called on the government to urgently seek means of cushioning the harsh effects of subsidy removal on manufacturers and workers.
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He observed that the rising cost of raw materials and transportation will make the prices of drugs unaffordable to the masses, which will in turn bring about low purchases.
He said: “Although local manufacturers do not have immediate impacts of the fuel subsidy removal on the availability of raw materials, the rising cost of transportation and other services will definitely increase the cost of production and worsen the already high cost of essential drugs.
“The sharp rise in the cost of production will lead to an increase in the prices of goods. And with low purchasing power from the consumers, this may lead to losses on the part of manufacturers.”
As part of palliative measures that the government can adopt for drug manufacturers in view of the fallout of the subsidy removal, Onuegbu recommended the removal of burdensome tariffs and creation of an economic zone to attract the incentives that will boost local production, among others.
“Also, President Tinubu must make it a priority to create an enabling economic environment for local production to thrive, while ensuring that the currency is stabilised through sound micro and macro -economic policies.
“I still want to emphasise the importance of forex availability, which will enhance the importation of essential raw materials for local manufacturers, as well as improve public infrastructures – roads, power, and security in the country.”
On whether the newly commissioned Dangote refinery, described as the largest in West Africa, can help Nigeria achieve medicine security, the NAIP chairman responded in the negative, saying there had been other refineries in the country before the Dangote refinery, yet, Nigeria keeps struggling with medicines availability.
Given the foregoing reactions by players in the pharmaceutical sector of the economy, it is not out of place that the soaring prices of drugs across medicine stores and pharmacies is unarguably posing new challenges for health consumers.
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Mr. Ken Omokhudu, in his view on the issue, said: “It is sad that Nigeria, purportedly the richest country in Africa or the second rather, is facing this market situation where thousands of people, mostly poor and old, suffer daily, and some actually die because they cannot afford the high prices of existing prescription drugs”.
In a similar vein, Mrs. Blessing Ijenwa said, “The situation is so bad that people living in the country are suffering from critical diseases and depend on prescription drugs to live. In other climes, prescription drugs are not a luxury, but in Nigeria it seems so.
The rising cost of prescription drugs is a crisis for families. The government needs to work hard to tackle this issue head-on and hold big drug companies and distributors accountable.
Mr. Ken Uweru said, “As an aged man, I am always conscious of the state of my health, and on that basis, I am quite aware that prescription drug prices are an urgent matter that needs to be addressed, and I wholeheartedly agree.
“ I am sharing my view on this because it is very crucial, particularly when it is obvious that the cost of virtually all prescription drugs on the counters of pharmacies are rising at twice the rate of inflation, since May 29, 2023 when this government came on board. Not only that, since that time we have seen the cost of foods and other essentials spiraling, even as the prices of various prescription drugs have continued to skyrocket well beyond the rate of inflation. In fact, the corporate greed by drug companies at the expense of our health and livelihoods must stop.
“This is not acceptable. Families should not have to pick between buying foods and paying for their life-saving medication. Patients should not end up in an emergency room because they cannot afford the necessary prescriptions to manage their health conditions”.
