Nigeria’s pharmaceutical imports have been forecast to reach $789m by 2018, gaining 10.4 percent from a value of $481m in 2013 as a result of importation of Active Pharmaceutical Ingredients (APIs) and other raw materials used in finished pharmaceutical products which have direct effect in the diagnosis, treatment or prevention of diseases from India, United States of America, Germany, etc.
While analysts believe this has widened the country’s pharmaceutical trade deficit from $475m in 2013 to $778m in 2018, opportunities exist for investors to take advantage of the gap in Africa’s largest economy with rebased Gross Domestic Product of $510bn.
Farouk Gumel, partner at PwC Nigeria, a multinational professional services firm, who gave this revelation, said that as chronic diseases are soaring and emerging economies including Nigeria are driving demand for medicines, imports remains key to meeting growing local demand for medicines in the country.
Although there are over 130 pharmaceutical companies in Nigeria and nine of these firms listed on the Nigerian Stock Exchange (Neimeth, Neros, Emzor, May & Baker Nigeria, Fidson, Drugfield, Nigerian German Chemical plc (NGC), Novartis and GSK), Gumel stated that some common drugs produced include anti-malarials, vaccines and antiretroviral (ARV), antibiotics, anti-helminthics, oncology drugs and diabetic drugs.
Gumel noted that while no reliable data exists, various estimates have put the amounts spent on medical tourism at between $500m and $800m.
According to Gumel “Top medical tourist destinations include India, Europe, the United States and the Persian Gulf. The Indian High Commission estimated that 47 percent (est. 18,000) of Nigerians who visited India in 2012 did so to seek medical attention spending $260m on treatment-about $15,000 per medical tourist. Opportunities exist for investors to take advantage of the gap in Africa’s largest economy.”
Ola Ijimakin, general manager, marketing, Fidson Healthcare plc, explained that petrochemicals are mostly the starting point for pharmaceutical companies to source raw materials for drug production hence until petrochemical industries in Nigeria are developed, the nation may not be able to develop capacity for APIs.
Ijimakin noted that the cost of finished pharmaceutical products is not in the hands of pharmaceuticals as it is determined to a large extent by the cost of imported APIs.
“There is the need to develop the chemical/petrochemical industry, provide necessary infrastructure and environment to make locally manufactured APIs competitive in the international market as any local investor might need to export if the local market is not able to absorb the products,” Ijimakin added.
BusinessDay investigations reveal that Nigeria and India signed a Memorandum of Understanding (MoU) on cooperation in pharmaceutical sector in March 2011, with India’s export of pharmaceutical products, including Active Pharmaceutical Ingredients (API) and fine chemicals to Nigeria standing at $307m as at March 31, 2012.
Mahsesh Sachdev, Indian high commissioner to Nigeria, in a recent interview with BusinessDay, revealed that Indian medicines have traditionally been the largest source of medicines into Nigeria, supplying over a third of the market.
“There are more than 30 Indian pharmaceutical companies located in Lagos alone and engaged in manufacturing and/or importing medicines, API and fine chemicals to Nigeria is worth $307m in year ending March 31 2012.
“With the industry growing at 13 percent annually, the turnover is expected to grow five-fold by 2020. While Indian Pharmaceutical industry is famous for generics, it is also making fast inroads into branded products especially in biotechnology,” Sachdev disclosed.
Rising disease burden, including non-communicable diseases (NCDs) such as hypertension and diabetes, is creating growth prospects for pharmaceutical companies including multinationals in Africa to produce drugs to address chronic conditions.
As investment in more specialised diagnosis centres, relating to cardiovascular and oncological disease has continued to improve the level of patient diagnosis, increasing levels of affordability has spurred demand for prescribed chronic medicines.
African pharmaceutical market is characterised by highly brand conscious consumerism, with aspirational consumption behaviour hence, competitive pricing, along with good product quality, distribution networks and product promotion remains key to success.
These growth projections for the pharmaceutical markets within East and West Africa is coming at a time when NCDs have become the leading causes of death, becoming a large public health concern, dominating healthcare needs and expenditures in developed and most low and middle-income countries, including Nigeria.
Alexander Chiejina
