BusinessDay

Repositioning Nigeria’s pharmaceutical industry for competitiveness

The Nigerian pharmaceutical industry is faced with a number of challenges ranging from high energy cost to lack of a strong petrochemical industry.

But it has managed to stay afloat in the face of these challenges.

Four firms in the industry have  so far obtained the World Health Organisation(WHO)’s pre-qualification needed for international competition and competitiveness.

Even though the WHO certification may appear as cheery news for the industry, three out of four firms that have obtained it are in a bad shape.

Evans Medical Plc is one of the three which got the pre-qualification. But it was taken over by the defunct Skye Bank and the tier-one First Bank in 2017.  Its dream of conquering the global market died as soon as the takeover happened.

Swiss Pharma sold its assets to Biogaran-Servier in March 2017. Those familiar with the company before its exit said the sale to the French company was based on financial crisis.

Chi Pharma was acquired two years ago by Coca-Cola. Since the beverage maker took over Chi Limited, it appears that the possibility of the firm returning to the market is remote.

Insiders say the drug makers failed to do due diligence before investing heavily to acquire the WHO prequalification.

The pharmaceutical industry has been hard hit by a number of factors. One is lack of funding, which has exposed the likes of Evans Medicals to humongous debts it could not repay. Apart from funding, the industry is also hard hit by high production cost, which makes its drugs more expensive than imported ones. Cost of production occupies 30 to 40 percent of their expenditure as the firms spend a lot on energy, water, research and development as well as raw materials. Most of the raw materials used by these drug makers are imported because Africa’s most biggest economy does not have a strong petrochemical industry that should produce resins and excipients.

Okey Akpa, chief executive officer of SKG Pharma and former chairman of the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN),  said that increased  import of medicines jeopardises Nigeria’s drug and national security.

Akpa said the industry needs an urgent support to save Nigeria during emergencies.

The world is currently facing an unprecedented crisis precipitated by covid-19, which has hit over 3.9 million people across the world amid tens of thousands of deaths.

Nigeria already has over 3,000 confirmed cases and there are fears of the virus spreading further in the coming weeks.

Unfortunately, the pharmaceutical industry is not ready to produce health-related products to support fight against the pandemic.

Fidelis Ayabae, chairman of Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN), said as long as the country makes case for importation of drugs more than local manufacturing,  the pharma industry will continue to fall below expectations.

 “The only remedy for drug security is encouraging local manufacturing,” he said.

“It has come to a situation where there is every man to himself. So, what do we do? As long as we think that drug importers have an argument, we will continue to struggle,” he said.

He advocated that hospital-based drugs, which drug makers could produce in the country, should no longer be allowed into Nigeria.

Analysts stress the need to cut multiple taxation and build infrastructure to support manufacturers. They stress the need to reduce gridlocks at Apapa and Tin Can ports to cut rising logistics costs at the ports.

Sam Ohuabunwa, president of the Pharmaceutical Society of Nigeria (PSN), said recently that the pharmaceutical industry should seek to increase its relevance and be less dependent on importation.

“We should be less dependent on imported inputs,” he said. “Let the industry spend more time to develop local inputs for production. We must begin to think how we can be more self-sufficient,” he advised.

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