• Thursday, July 18, 2024
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BusinessDay

Nigeria’s drug stockpiles surge by 65% in Q1’24, as inflation squeezes consumer spending

Abuse of drugs like paracetamol affects liver – Expert warns

Nigeria’s rising inflation impacts pharmaceuticals, with firms’ finished goods inventory increasing by 64.6 percent in Q1 2024, Businessday findings show.

Fidson Healthcare, May & Baker Nigeria, Mecure, and Neimeth reported N15.8 billion in finished goods in Q1 2024, up from N9.6 billion in 2023.

Finished goods are goods that have completed the manufacturing process but have not yet been sold or distributed to the end-user.

The inflation surge has reduced consumers’ purchasing power, leading to decreased spending on pharmaceuticals. This situation risks leaving companies with unsold inventory, tying up cash flow and posing financial challenges.

Nigeria’s headline inflation rate rose in May to 33.95 percent from 33.65 percent in the previous month, according to the National Bureau of Statistics.

A report by SBM Intelligence, a research consulting and data analytics firm, titled ‘Paying the price on health’, showed that between 2019 and 2023, a pack of 500-milligram Ampiclox capsules recorded the highest jump, with the cost price increasing by 1,390 percent and the selling price increasing by 1,100 percent.

It said a pack of 500-milligram Amoxil capsules grew the fastest among all the medicines analysed, with the selling price jumping by 456 percent between 2022 and 2023.

Earlier this year, BusinessDay reported that as the prices of drugs continue to soar, many Nigerians are opting for cheaper traditional herbal concoctions to meet their healthcare needs without caring so much about the possible negative implications.

The devaluation of the naira and exits of two pharmaceutical manufacturers including GlaxoSmithKline (GSK), a UK-based pharmaceutical company, has pushed up the prices of several essential drugs in recent months and put them out of reach for many citizens, particularly low-income earners who are already squeezed by the growing high inflation and poverty in the country.

Here are further details of the companies

Fidson Healthcare

Fidson Healthcare’s finished goods grew to N8.94 billion in Q1 this year from N5.76 billion in the same period of 2023.

The firm’s total inventories increased to N18.6 billion from N16.4 billion. Its goods-in-transit dropped to N2.16 billion from N4.16 billion, while raw and packaging materials grew to N6.62 billion from N6.05 billion.

Work-in-progress recorded in the inventory amounted to N499.9 million from N27.7 million. Engineering spare parts grew to N387.6 million from N350.4 million, while promotional and other consumable materials increased to N121.6 million from N146.7 million.

May & Baker Nigeria

May & Baker’s finished goods surged to N3.1 billion in Q1 2024 from N406.03 million in the same period of 2023.

The firm’s total inventories increased to N9.62 billion from N6.27 billion.

Raw and packaging materials in inventories grew to N6.1 billion from N4.51 billion, while work-in-progress recorded in the inventories stood at N38.8 million, up from N406.03 million.

MeCure Industries

MeCure Industries’ finished goods increased to N2.97 billion in Q1 2023 from N1.87 billion in the same period of 2023.

The firm’s total inventories grew to N5.41 billion from N3.6 billion. Raw materials in inventories grew to N4.95 billion from N4.67 billion.

Neimeth International Pharmaceuticals

Neimeth’s finished goods grew to N871.8 million in Q1 2023 from N762.03 million in the same period of 2023.

The firm’s total inventories grew to N2.27 billion from N1.88 billion.

Raw materials stood at N1.08 billion, up from N762.03 million, while work in progress rose to N109.5 million from N100.4 million.

Spare parts in inventories amounted to N32.2 million, up from N41.5 million, while goods in transit fell to N173.5 million from N215.4 million.