• Friday, March 29, 2024
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Outsourcing can cut Nigeria’s drug import by 25%

Outsourcing can cut Nigeria’s drug import by 25%

Nigeria can productively engage about 60 percent of its under-utilized pharmaceutical manufacturing capacity and cut importation of pharmaceutical products by at least 25 percent with the adoption of contract manufacturing (outsourcing), industry analysts and stakeholders have said, making a case for growth.

Contract manufacturing is one of the strategies emerging market peers have adopted to own a significant share of global pharmaceutical production, by servicing the rising need for outsourcing different aspects of production.

China, India, Singapore, South Korea, and even Malaysia have become an attractive hub for giant pharmaceutical firms looking to have others manage the business of up-scaling their backend for large volumes of production and stay price competitive.

This played a significant part in placing Asian manufacturers as the second-leading exporter of drugs and medicines in 2019 with 9.5 percent of the global total, despite European countries controlling over 80 percent.

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Taking on these roles has given these manufacturers an edge in a highly contested marketplace such that India, for instance, now answers as the largest producer of vaccines in the world.

Analysts think the contracting manufacturing strategies hold huge growth potential for Nigeria to make a bold statement on the world map, considering the opportunities inherent in collaborations with corporations of repute for quality standards.

As of 2017, Nigeria’s drug manufacturing industry only catered to a quarter of the local demand, with the remaining three quarters handled by Asian manufacturers’ exports to Nigeria.

This implies as much as 70 percent of marketed drugs by about 130 pharmaceutical firms were imported.

It is a growing concern that the Nigerian Representatives of Overseas Pharmaceutical Manufacturers (NIROPHARM) say the country may not be rid of it and shies away from opportunities such as contract manufacturing.

The group in a position report provided to BusinessDay stated that some of the goals outlined in the Nigerian Industrial Revolution Plan to make Nigeria a top hub in West Africa and an ideal supplier of low and medium technology consumer and industrial goods could materialise with the contracting approach in a pharmaceutical market expected to worth $4 billion by 2026, according to McKinsey’s projections.

“What we are saying is that instead of banning the importation, why don’t you allow these local companies that have the capacity to work with the international firms raise their standards, and with that take on the volume that is being imported,” Femi Soremekun, president NIROPHARM

Different from regular manufacturing companies that are neck-deep in all operations of production, contract manufacturing organisations are based on the client’s specific designs, formulas and specifications.

While some clients request for active ingredient manufacturing, for example, others simply want solid dosage produced to their specifications.

Some of the drivers of growth in Nigeria currently include demand for generic compositions to reduce the rising cost of healthcare increased collaborations with pharmaceutical firms overseas, availability of production facilities, and regional trade integration across Africa.

NIROPHARM sees this as a growth area that the government can pursue strongly to position Nigeria’s manufacturing sector better on the continent.

Countries across Africa are bending towards generic drugs, which have sustained double-digit market share at the expense of over-the-counter and branded products.

“You are going to have higher capacity utilization; your cost of manufacturing will drop and make the product. If a Fidson is trying to compete for export of a drug within the AfCFTA to Senegal, the average doctor will still want to buy a GSK product for trust. But if you present a product that is in partnership with GSK, the trust will extend to this product and position Nigeria better,” Soremekun said.