Contract Manufacturing: Critical tool for reducing pharmaceutical imports, counterfeit drugs in Nigeria

Q: Despite the overall growth and significant benefits of Contract manufacturing, there are still some key barriers mitigating a faster growth of the initiative in the country

Nigeria’s pharmaceutical sector has evolved from the period of importation of essential medicines to the proliferation of significant local and indigenous manufacturers. However, it still suffers insignificant contribution of local firms to the total amount of pharmaceutical products in circulation across the country today.

Available data indicate that about 70 percent of drugs marketed by pharmaceutical firms in Nigeria are imported.

But experts believe that the future of Nigerian pharmaceuticals lies in domestication of contract manufacturing model, which presents a mid point that enables importers and local manufacturers work towards improved local capacity to achieve lower production costs as well as improved quality of products through technology transfer.

Contract manufacturing involves production of goods by a company, under the label or brand of another company, and offers opportunities for capacity, capability building and drug security.

Those who know believe that the concept will significantly improve manufacturing capacity utilization, drive improved technology transfer, which would then deliver lower operating costs and encourage pharmaceutical exports from Nigeria.

At a recent conference – ‘Future of Nigerian Pharma Dialogue’ – organised by Businessday Media Limited in partnership with Niropharm in Abuja, experts lamented how huge cost of setting up factories has continued to challenge the attainment of drug security in Nigeria.

The conference, themed “Achieving National Drug Security and Export through Local Contract Manufacturing,” focused on the dynamics and factors required for the successful implementation of a contract manufacturing policy in Nigeria’s pharmaceutical sector.

Femi Soremekun, president of Niropharm, stressed that contract manufacturing would foster the much needed technology transfer between multinational companies and indigenous manufacturers.

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Soremekun stressed on the need for research based pharmaceutical importers and local manufacturers to collaborate to ensure upskilling and transfer of technology.

“A synergistic relationship and/or part- nership between both parties, mediated through proper policies and regulations will be beneficial to the economy and the Nigerian populace,” he said.

Though a relatively new concept in Nigeria, contract manufacturing is a huge multibillion dollar business abroad, whereby manufacturing companies are set up to wholly manufacture.

But several factors support the case for a strategic contract manufacturing plan for Nigeria, including: reduced costs to serve with improved capacity utilization; ease of adaptation to changing global manufacturing requirements; and technology transfer and access to global best practices and manufacturing expertise from global partners.

Others include: reduced drug commercialization development times; as well as lower drug development risks.

Niropharm members support the growth of local manufacturing in Nigeria, but believe policy approach should not be an all or zero-sum approach. To arrive at a win-win, it should allow for input from various stakeholders including importers.

In his presentation, Lakan Asuni, immediate past president of Niropharm, disclosed that contract manufacturing model is aimed at making Nigeria a hub as well as net exporter of pharmaceutical products.

According to him, the model would help to build the required capacity for product that are not currently being manufactured in Nigeria.

“Benefits of contract manufacturing model includes: ensuring reduced cost of production, technology transfer, increased drug security,” he said.

During one of the panel sessions, Foluke Odediran, Managing Director of Sanofi, a multinational pharmaceutical firm said that the inability of local firms to meet the demand of Nigerians has led to influx of imported products in pharmaceutical space.

Odediran noted that the industry, being a sensitive one, required that players identified and address the gaps associated with manufacturing of medicines in order to check the circulation of substandard products in the country.

“The only way local manufacturers will meet local demand and perhaps delve into export is through contract manufacturing.

“Although most people believe that Africa does not produce COVID-19 vaccine, Sanofi company, through contract manufacturing, has produced billions of doses of COVID-19 vaccines including Johnson and Johnson, Astrazeneca, and Moderna vaccines,” she said.

She, however, cautioned the local manufacturers going into contract manufacturing to have proper understanding of how it works to avoid disappointment and failure.

She also identified forex scarcity as a major challenge to consider in contract manufacturing, “The biggest challenge we have is forex. We cannot repatriate our funds and when we want to access funds, it becomes difficult.”

The Secretary to the Government of the Federation, Boss Mustapha, who delivered the keynote address noted that outsourcing in form of contract manufacturing has now become a significant way of doing business in the pharmaceutical industry.

According to him, with the advent of COVID-19 pandemic, the pharmaceutical sector around the world has begun to seek contract manufacturing as a means of ensuring drug security.

The SGF who was represented by the deputy Director of political and economic affairs, office of the SGF, Hassan Aminu James, cited a PricewaterhouseCooper (PWC) report, which states that counterfeit drugs currently account for 17 percent of drugs supplied in Nigeria.

“This report is not far from the truth as 70 percent of drugs in the country is being imported, this puts the private sector as the main source of medicines (drugs) for many Nigerians as well as the main hub for counterfeit products, therefore, for Nigeria to achieve National drug security and export, the private sector has a pivotal role to play.

“The contract manufacturing model provides an array of services to drug companies including: drug development, preformulation, conduct of stability studies, method development, pre-clinical trials as well as documentation of compliance with NAFDAC regulatory requirements,” he said.

The SGF further noted that factors including substandard and falsified medical products; high level importation of drugs products and raw materials, compromised supply chain integrity; lack of effective and efficient regulation and control due to overlapping functions of regulatory agencies; and insufficient advocacy to rational use of drug have continued to threaten drug security in Nigeria.

He said aside from our inability to have a full functioning human vaccine laboratory and production plants, what is presently up and running is an animal vaccine production laboratory.

He said the institute makes a number of vaccines for the local market and for export to other countries In the West African sub-region as it produces viral and bacterial vaccines against several diseases of livestock muding cattle, sheep, goats and chickens.

“It is my belief that if we can be self-sufficient in animal vaccine production, it can be reciprocated for human vaccine production as we have virologists, molecular biologists and experts in genomics of infectious diseases whose capabiities can be harnessed for immediate impact,” he said.

The President of the Association of pharmaceutical importers of Nigeria, Nnamdi Obi decried the bottleneck faced by importers at the ports, stating that Nigerian ports are not investment friendly.

According to him, Nigerian industrial space requires set of policies and concerted efforts both by the government and the private sector.

He said: “If we can adopt the contract manufacturing model and have a robust industrial sector policy, everyone will benefit from it.

“We must put the right policies in place, there need to be concerted effort by the government and the private sector to drive the growth we desire.”

Contract manufacturing, according to him would promote technology transfer and access to global best practices while lowering drug development risks.

However, despite the overall growth and significant benefits of Contract manufacturing, there are still some key barriers mitigating a faster growth of the initiative in the country.

As highlighted, some of those include: Poor adherence to contractual agreements; Government fiscal and regulatory policies; Lack of synergy between intentions and drivers of importers of pharmaceutical products and local manufacturers, as well as limited number of WHO pre-Qualified factories, a pre-requisite for localization by importers of pharmaceutical products from overseas stringent regulatory authorities.

Ken Onuegbu, Chairman, Association of Industrial pharmacists of Nigeria agrees with some of these barriers, noting the high market cost imposed on products by manufacturers stating that it may be a setback to the model.

He also called for active collaboration among local producers, adding that there is need to promote good product packaging that meets international standards.

The Director General of National Agency for Food and Drug Administration and Control (NAFDAC), Mojisola Adeyeye, however, assured that efforts were ongoing to develop guidelines that would promote local manufacturing of pharmaceuticals products.

According to the DG, there is need for a sound legal framework that would ensure needed compliance to the rules of contract by both parties.

She admitted that Nigeria did not embrace contract manufacturing early enough in the pharmaceutical industry, which explains why the country is still heavily dependent on importation of pharmaceutical products.

“The country’s local manufacturing companies are however improving in their local production even without the collaboration of the big businesses.”

Adeyeye noted that the players in the local industry must be careful in attracting the right collaborations that would enable them meet local demands.

The professor clarified that the agency may not be in a place to enforce legal requirements in terms of compelling parties in the contract to adhere to the rules of agreement, stressing that if one party defaults the other party has a right to go to court.