Covid-19: Time to support Nigeria’s pharmaceutical industry
The Nigerian pharmaceutical industry has managed to stay afloat in a very harsh economic environment. The firms in the industry have tried to innovate amid little policy support.
Juhel, an Awka, Anambra State-based drug maker, recently unveiled a new Oxytocin injection for pregnant women—the first of its kind in Africa.
Drugfield Pharmaceuticals Limited has a product known as Chlorhexidine gel, which takes care of the umbilical cord.
Similarly, SKG Pharma has locally produced amino acid and vitamins— first of their kind in Africa. Also Daily Need Industries has produced Amoxicillin Dispersible Tablets (DT), used for the cure of pneumonia. More so, May &Baker and Fidson have innovated unique solutions for the Nigerian and African markets.
May&Baker has a joint venture project with Federal Government to produce vaccines locally. The company has also entered into an understanding with the Federal Institute of Industrial Research Oshodi (FIIRO)for the commercialisation of a sickle cell supplement produced by the institute.
So far, three firms in the industry have obtained the World Health Organisation(WHO)’s pre-qualification necessary for international competition and competitiveness.
The WHO certification was initially good news for the industry that so much sought it with grit, brain and brawn.
But peculiar problems mean the industry is yet to enjoy any significant gain from the prequalification.
Already, two out of three firms that have obtained it are not in a healthy state.
Evans Medical Plc is one of the three which got the pre-qualification amid pomp and ceremony. But it was taken over by the defunct Skye Bank and the tier-one First Bank in 2017.
The drug maker had invested hugely on the road to acquiring the sought-after WHO’s prequalification, which gave it an opportunity to participate in international bids.
But the dream of consolidating its international presence became a mirage as the bankers came for the jugular after a July 4, 2017 court order necessitated by loan default.
Swiss Pharma is another company to achieve this feat. In fact, it was the first company to do so in 2014. However, it sold its assets to Biogaran-Servier in March 2017. Those familiar with the company before its exit said the sale to the French company was based on financial crisis.
The pharmaceutical industry has been hard hit by a number of factors. One is lack of funding, which has exposed the likes of Evans Medicals to humongous debts it could not repay. Apart from funding, the industry is also hard hit by high production cost, which makes its drugs more expensive than imported ones. Cost of production occupies 30 to 40 percent of their expenditure as the firms spend a lot on energy, water, research and development as well as raw materials. Most of the raw materials used by these drug makers are imported because Africa’s most biggest economy does not have a strong petrochemical industry that should produce resins and excipients.
Okey Akpa, chief executive officer of SKG Pharma and former chairman of the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN), said that increased import of medicines jeopardises Nigeria’s drug and national security.
“Virtually every raw material in this sector has a high import dependency ratio. If you then face the scarcity of forex like we do have in this country, it poses further challenge,” Akpa told BusinessDay in 2019.
Akpa said the industry needed an urgent support to save Nigeria during emergencies.
The world is currently facing an unprecedented crisis precipitated by covid-19, which has hit almost 400,000 people across the world amid thousands of deaths.
Nigeria already has up to 46 confirmed cases and there are fears of the virus spreading more in the coming weeks.
Unfortunately, the pharmaceutical industry is not ready. No manufacturer produces any of the masks or ventilators in the country. Even hand sanitizers are produced by few manufacturers.
Fidelis Ayabae, chairman of Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN), said neglect of the industry over the years had been Nigeria’s biggest weak point in fight against coronavirus.
“We have the capacity to produce all these items, but we are not manufacturing them because it is uninteresting and unprofitable to do so. The economy is open to all kinds of imported products which will make local products expensive,” Ayabae said.
The industry’s capacity utilisation is barely 47 percent, according to MAN, and only few players are really healthy.
In 2014, companies like Emzor, GSK, and a number of others earned $7.708 million from export of medicines to the African market, according to the International Trade Centre (ITC). Four years later, however, the companies made only $708,000 despite Naira weakening by 81 percent.
With population growth and decreased drug export, drug importers have raised their game, bringing in all forms of medicines into the economy, with imports standing at $513.9 million in 2018, as against $397.8 million in 2014 and $492 million in 2016.
Akpa advocates for a right policy to attract investments in this area, which is capital intensive.
“There must be a period for investors to recoup their investments. There also must be ‘smart protection’. I call it smart protection because if someone sets up a factory and produces in a high-cost environment like ours, and you still allow unregulated importation of what he is producing in a way that he cannot sell, he cannot sustain his investments. I will like to refer to that as smart protection.”
He argued that the industries faced the infrastructural challenge, which must be immediately addressed.
“This industry is yet to be competitive. If it’s not competitive, then it is set to face challenges when you throw it open or face emergencies,” he said.
More than 120 pharmaceutical firms have invested about N500 billion into the economy. Dangote Petrochemicals is in the offing, but analysts say the country needs at least five of such. The Central Bank of Nigeria (CBN) last Wednesday announced N1.1 trillion intervention fund to support manufacturers and health-related sectors. It had earlier approved N50 billion cheap credit for small businesses and pharmaceutical firms.
One player in the industry asked for a special, permanent fund for the industry.
Ayabae, on his part, said Nigeria must now emulate India and China who had to protect local manufacturers to making importation difficult or more espensive.
But Sam Ohuabunwa,president of the Pharmaceutical Society of Nigeria (PSN), said the pharmaceutical industry should seek to increase its relevance and be less dependent on importation.
“We should be less dependent on imported inputs,” he said. “Let the industry spend more time to develop local inputs for production.We must begin to think how we can be more self-sufficient,” he advised.
He said Nigeria was not doing sufficient public awareness about the covid-19 virus, stressing the need to combat it to save lives.
“We can see that the economy is calling for greater introspection. What can we do for ourselves if the external environment is getting difficult and doing business with China is getting difficult? What are those things we can do to meet with our needs in drugs production?” he asked.