Nigeria’s pharmaceutical companies are ramping up investments and expanding operations to tap growing local opportunities.
Exits of some foreign drug makers and high cost of imported medicines have forced local players to invest in the production of diagnostic kits and devices to address Nigeria’s vast population’s critical medical shortages.
Fidson Healthcare Plc, Nigeria’s biggest drugmaker, announced plans in April to raise N20 billion through a commercial paper issuance to expand into treatment of pediatric cancer, hypertension, and other cardiac disorders, including diabetes and asthma.
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It was the first to establish domestic ampoule production in Nigeria. This expertise enabled it to seamlessly take over the manufacturing of GSK’s over-the-counter products when the multinational withdrew from the Nigerian market.
Kaduna-based drugmaker, Ama Medical Manufacturing Limited, expanded its operations in March by inaugurating the second wing of its 10 million pouch IV fluid plant. This new facility will focus on solid oral formulations, stem cells, and blood product manufacturing.
Aiming to capitalise on the African Continental Free Trade Area (AfCFTA), Ama has invested in form-fill-seal (FFS) technology. This advanced European automation will enable the company to produce 250 ml formats of normal saline, 4.3 percent dextrose saline, and 5 percent dextrose, expanding its reach across Africa.
Also, Swiss Pharma Nigeria Limited (Swipha) secured the World Health Organization (WHO) approval to develop an anti-malarial drug for pregnant women, marking the second prequalification it has received in two years.
About 12 pharmaceutical companies are branding 33 products for health insurance purposes under a collaboration with the National Health Insurance Authority to procure products from low- to medium-risk companies with good manufacturing practice certificates.
In 2019, Juhel Nigeria acquired two Blow Fill Seal’ (BFS) machines, which cost hundreds of thousands of dollars.
The facilities have helped the drug maker to manufacture new Oxytocin injection for pregnant women, seen as the first of its kind in Africa.
Moji Adeyeye, director-general of the National Agency for Food and Drug Administration and Control (NAFDAC), said a growing register of such investments has moved domestic drug production from 30 percent to almost 40 percent.
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“Local manufacturing is not just access, but access to quality medicines. When we started our 5+5 policy to shift from imports to local manufacturing, manufacturers stepped up. And when we now think of how much we are producing locally, it is no longer 30 percent; it is close to 40 percent,” the director-general said during the 7th Nigeria Pharma Manufacturers Expo 2024 in Lagos.
More than 20 newly registered local drug manufacturers have established WHO-compliant facilities in Nigeria, increasing the number of active local FPP manufacturers by 12 percent and ensuring a steady supply of quality essential medicines, Adeyeye revealed earlier.
As of February 2024, 143 applications had been received for regulatory reviews and approvals for new pharmaceutical layouts, with 73 percent given regulatory approval to commence construction.
However, the naira devaluation has caused a setback for the majority of the 105 firms who got this approval, as only 35 percent have completed and are at different stages of registration.
Oluwatosin Jolayemi, chairman of the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria, said there are 120 active companies in the group striving to invest in expanding their capacities to produce medicines.
Most companies need huge capital and an enabling policy to secure market uptake, access, and protection of these investments, Jolayemi stressed.
“To create a win-win situation for all stakeholders in this sector, the government, the populace, and the pharma companies must be intentional in crafting suitable trade, tax, regulatory, and fiscal policies that unlock the untapped value in the pharma space,” he said.
According to an analysis by McKinsey Insights, the value of the Nigerian pharma market could rise by about 9 percent a year to reach $3.6 billion by 2026, pushing it on par with the South African market. It also noted that Nigeria could contribute between $1.9 billion and $2.2 billion to pharma sales growth, 55 percent of it from prescription drugs.
Another analysis by Fitch projects that the Nigerian pharmaceutical market will grow at a 7 percent compound annual growth rate between 2022 and 2033.
Padamashree Sampath, chief executive officer, African Pharmaceutical Technology Foundation (APTF), Kigali, said at the pharma expo that the sector needs to work towards 50 percent domestic manufacturing by 2034 to maximise its potential.
She identified a $3 billion pharmaceutical action plan as part of the financing facilities provided by the African Development Bank (AFDB) to revamp and support Africa’s pharmaceutical to manufacture essential medicines and vaccines.
The AFDB is also investing an additional $3 billion to boost health infrastructure through its strategy on quality health infrastructure in Africa, she added, noting that these efforts are targeted towards supporting the African Union (AU)’s plan for the continent to produce 60 percent of its vaccines.
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Sampath emphasised the challenges facing the sector, citing an APTF survey that revealed that companies procure less than 0.1 percent of their material inputs locally despite progress in local manufacturing. Over 90 percent of these inputs come from foreign sources, primarily India, China, and Europe.
Meanwhile, raw materials account for 70 to 80 percent of production costs, constituting a significant hurdle to competitive pricing, she noted.
“Supply chain limitations are among the numerous constraints. Some need diverse, direct, and specific interventions. APTF’s partnership with PMGMAN will work to support Nigeria in all possible ways to accelerate pharmaceutical productions in Nigeria,” she said.
