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Nigeria’s drugmakers spend 50% more on distribution in one year

Nigeria’s drugmakers spend 50% more on distribution in one year

The combined selling and distribution costs of four healthcare firms listed on the Nigerian Exchange Limited has increased by 50.2 percent within one year, a BusinessDay analysis shows.

In the firms’ latest financial statements, their total cost increased to N3.08 billion in the third quarter of last year from N2.05 billion in the same period of 2022.

The selling and distribution cost also rose on a quarter-on-quarter basis by 19.4 percent from N2.58 billion in Q2.

The companies analysed are Neimeth International Pharmaceuticals Plc, May & Baker Nigeria Plc, GlaxoSmithKline Consumer (GSK) Nigeria Plc and Fidson Healthcare Plc.

A  breakdown of the data shows that Fidson had the highest selling and distribution cost of N1.33 billion followed by GlaxoSmithKline with N0.93 billion, May and Baker (N0.70 billion) and Neimeth (N0.12 billion).

Last year, Africa’s biggest economy saw an increase in transport costs following federal government reforms such as the removal of petrol subsidy and the unification of the foreign exchange market.

The removal of the subsidy tripled the petrol price to N617 from N184, causing public transportation providers such as buses, tricycles and motorcycles to raise transportation fares.

Citing a harsh macroeconomic environment, GSK announced in August plans to exit Nigeria, after 51 years of operation in Nigeria.

Firm-by-firm analysis

Fidson Healthcare

Fidson Healthcare incurred N1.33 billion as its selling and distribution cost in Q3, up from N0.60 billion in the same period of 2022.

The company started operations on March 1, 1995, as a local distributor of pharmaceutical products. Barely a year later, the company started importing its brand of finished medicines – introducing Ciprotab and Peflotab brands of quinolones to the market.

By July 2002, Fidson set up its first local manufacturing facility and later became the first company in sub-Saharan Africa to manufacture Antiretroviral (ARVs) drugs in March 2005.

GSK 

GSK’s selling and distribution cost rose to N0.93 billion in Q3 from N0.67 billion in the same period of 2022.

It was incorporated in Nigeria in June 1971 and commenced business in July 1972, under the name Beecham Limited. Its head office is located at 1 Industrial Avenue, Ilupeju, Lagos.

The company was quoted on the Nigerian Stock Limited in 1977.

May& Baker Nigeria 

May and Baker incurred N0.70 billion as its selling and distribution cost in Q3 2023, up from N0.64 billion in the same period of 2022.

The company was founded on September 4, 1944, as Nigeria’s first pharmaceutical company. It has its origin in England, the United Kingdom where in 1834, three chemists founded Grimwade, May & Pickett, a firm for manufacturing chemicals for pharmaceutical products.

It became a publicly quoted company following its listing by introduction on the Nigerian Stock Limited in November 10, 1994, and became May & Baker Nigeria Plc.

Neimeth International Pharmaceuticals 

Neimeth recorded a decline in its selling and distribution cost in Q3 2023 totalling N0.12 billion from N0.14 billion in Q3 2022.

Before the brand name Neimeth International Pharmaceuticals Plc., the company had operated in Nigeria for 40 years, manufacturing, marketing, and distributing Pfizer brands of pharmaceutical and veterinary products in tablets, capsules, ointment/cream, powder, injectables, and oral liquid forms.