Leveraging pharmaceutical contract manufacturing to boost investment, foreign exchange for Nigeria
The Nigerian pharmaceutical industry despite hard times in a very harsh economic and business environment have managed to stay afloat as industry players embrace innovation amid little policy support. Yet, it holds multi-billion dollar potentials for the Nigerian economy.
The outbreak of the pandemic exposed several vulnerabilities in Nigeria’s pharmaceutical sector, giving greater urgency to the debate around raising domestic manufacturing and pushing for international partnerships.
According to the National Institute for Pharmaceutical Research and Development (NIPRD), the Nigerian pharmaceutical industry has an average market size of $2 billion. This could witness enhanced growth of upstream production if pharmaceutical manufacturers explore the opportunities of contract manufacturing.
Pharmaceutical contract manufacturing is simply the production of goods by a firm, under the label or brand of another firm.
The contract manufacturing market is also laced with potentials as the International Society for Pharmaceutical Engineering (ISPE) the pharmaceutical contract manufacturing global market is expected to reach $120 billion by 2027 from an estimated $89.91 billion in 2020.
The growth in value is due to factors such as the rise in population, increase in chronic diseases such as cancer and cardiovascular disorders and soaring healthcare expenditures, all of which Nigeria is a victim too.
“Nigeria as the largest market in Africa always has the potential to emerge as a major pharmaceutical manufacturing hub in Africa, yet, we are able to meet only 30 percent of our demand for pharmaceutical products through domestic production, which leaves a significant gap being met through importation,” Niyi Adebayo, Minister of Industry, Trade and Investment said during the launch of the Nigeria Vaccine Policy (NVP).
Major challenges for Nigerian drug makers include lack of funds to procure equipment for pharmaceutical manufacturing, scarcity of research and development (R&D) talent, supply chain challenges, poor capacity utilisation, weak infrastructure, low-cost imports, inconsistency in government policies, and compliance with regulatory standards, among other issues all of which have historically impeded growth in the sector.
However, the federal government and its agencies have shown commitment to developing the industry through various policies and intervention programs.
Nigeria’s President Muhammad Buhari on October 1st revealed that the Ministries of Finance, Budget and National Planning, Health, Education and Science and Technology have been directed to work with Nigerian and International pharmaceutical companies and research organizations to enhance Nigeria’s domestic pharmaceutical capacity
Similarly, Godwin Emefiele, Governor, Central Bank of Nigeria said that the apex bank increased the healthcare intervention fund to N200 billion from the initial N100 billion in a bid to support the country’s healthcare sector.
He also mentioned that over N83.9 billion in loans has been disbursed to pharmaceutical companies and healthcare practitioners, in supporting 26 pharmaceutical and 56 medical projects across the country.
“We have also tried as much as possible to extend various facilities to people that are interested in upgrading the health facilities in Nigeria. We are interested in supporting people who want to build pharmaceutical plants in Nigeria,” he said.
Femi Soremekun, president, Nigerian Representatives of Overseas Pharmaceutical Manufacturers (NIROPHARM) told BusinessDay that substantial opportunity lies in contract manufacturing for Nigerian pharmaceutical companies, adding that with higher capacity utilization, the cost of manufacturing products will reduce significantly.
“Instead of banning the importation, local companies that have the capacity should be allowed to work with international firms and raise their standards, and with that take on the volume that is being imported,” he said.
Already some firms are leveraging this channel to boost their production such as May & Baker Plc., a major local manufacturer who in 2019 struck a deal with multinational giant, Sanofi to manufacture some of Sanofi’s products that were imported into the country previously.
Similarly, GSK, another international research-based pharmaceutical company has contracts with Fidson, a Nigeria-based pharmaceutical manufacturing company, to produce some of its products.
Suggestions and contributions as to how pharmaceutical contract manufacturing will benefit the Nigerian economy and local pharmaceutical industry will be discussed by experts at the maiden edition of BusinessDay’s Future of Nigeria Pharma Conference scheduled to hold on Tuesday, November 16, 2021 at Lagos/Osun Hall, Transcorp Hilton Hotel, Abuja.
The conference which is themed “Achieving National Drug Security and Export through Local Contract Manufacturing, will bring together c-level executives from the pharmaceutical industry, regulatory agencies, government parastatals, professional associations and research institutions who will dialogue on how Nigeria can grow its pharmaceutical manufacturing industry.
Speakers and participants will forge a consensus that will allow improved production synergy between multi-national drug manufacturers operating in Nigeria and their domestic counterparts to raise the shell of contract manufacturing in Nigeria’s total drug production.
The Pharma Nigeria conference will consist of a fireside chat and panel discussions. Confirmed speakers include Ade Popoola, CEO, Reals Pharmaceutical, Folake Odediran, Country Lead, Sanofi-Aventis Nigeria Ltd., Mojisola Adeyeye, Director-General (DG), National Agency for Food and Drug Administration and Control (NAFDAC) and Kunle Oyelana, MD, GlaxoSmithKline (GSK) Plc.
The conference is organized by BusinessDay, West Africa’s leading business news media, economic intelligence, and executive insights company, in partnership with the Nigeria Representatives of Overseas Pharmaceutical Manufacturers (NIROPHARM).