Nigeria’s Supply Chain Report exposes challenges to pharmaceutical industry

…Calls for innovation, infrastructure, human capital development

Nigeria’s pharmaceutical sector is facing challenges that hinder it from attaining its full potential, according to the 2023 edition of the Nigerian Logistics and Supply Chain Industry Report.

The COVID-19 pandemic starkly exposed the vulnerabilities of the nation’s healthcare supply chain, with the pharmaceutical sector bearing the brunt of the crisis.

According to the report, Nigeria’s pharmaceutical landscape is dominated by small-scale players, making it difficult to compete globally.

“The heavy reliance on imports for crucial components and finished products has left the industry exposed to supply chain disruptions and price fluctuations,” the report reviewed by Ukamaka Okafor during the public presentation in Lagos recently, stated.

It blamed the lack of robust infrastructure, including power supply and transportation as a significant impediment to local manufacturing.

It further pointed out that the complex regulatory environment, characterised by overlapping functions and inconsistent enforcement, has created a challenging operating environment for pharmaceutical companies.

To address the challenges in the industry, the report called for a holistic approach that involves a collaborative effort between the government, private sector, and other stakeholders.

It said there is a need for infrastructure development and investment in power, transportation, and other essential infrastructure to support local manufacturing.

“There is a need for regulatory reforms that involve streamlining the regulatory process and strengthening enforcement to protect public health. There is a need to incentivise local production by providing financial incentives and support to encourage domestic pharmaceutical manufacturing.

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“Human capital development is also essential, and this explains the need for investment in education and training to build a skilled workforce,” the report stated.

For the pharmaceutical supply chain to become resilience to crisis, Fidelis Ayebae, managing director of Fidson Healthcare Plc, said while presenting a keynote speech on ‘Shifting Trend in Pharma Supply Chain: Manufacturing Challenges, Distributions Consideration, Patient Access,’ said there is a need to diversify supply chains and build resilience to future disruptions.

Represented by Biola Adebayo deputy managing director of Fidson Healthcare Plc, said Nigeria’s pharmaceutical industry is a dynamic landscape, and businesses must be agile to thrive.

Ayebae said companies in the health sector must be ‘trend spotters’ by staying ahead of market changes, embracing technology, and adapting new business models to meet evolving consumer needs.

He said the shifting trade winds, disruptions like the war in Ukraine, and technological advancements such as AI and automation were crucial trends to consider in the healthcare industry.

“Companies need to adjust their strategies based on these trends. They need to diversify their supply chain sources to avoid reliance on single sources; invest in automation and digitalisation; build resilience for disruptions; focus on sustainability and green manufacturing and rethink human resources strategies as AI takes over certain jobs,” he explained.

He said the high cost of electricity in some regions may lead companies to relocate production while automation may require companies to invest in new machinery.

According to him, shortages of essential goods such as medicine in Nigeria highlight the need for domestic manufacturing capabilities.

He said businesses that can identify and adapt to these trends will be better positioned for success in the future.

Speaking on the sideline, Obiora Madu, director general of the African Centre for Supply Chain (ACSC) told journalists there are shifting trends in all sectors but that of pharmaceutical industries became obvious during the Covid-19.

“The efficiency of the health supply chain is assessed by accessibility and coverage; these two indices were absent given Nigeria’s circumstances. The shifting trends are about things we must do in the new normal.

“The reports also examined why Nigeria is finding it difficult to manufacture some medicines locally and why we should import them when we have local manufacturing companies,” he said.

Madu blamed a lack of capacity on the part of manufacturers and a lack of support on the part of the government for some of the problems faced by the industry.

He said the port also poses a big challenge to companies that import raw materials and that the report suggested what businesses can do to overcome it.

Madu said Nigeria needs to build infrastructure such as rail, and power and develop human capital through education.

Nigeria’s pharmaceutical industry has immense potential, but realising this potential requires a multifaceted approach.

By addressing the challenges and capitalising on emerging opportunities, Nigeria can build a robust and self-sufficient pharmaceutical sector that improves the health and well-being of its citizens.