Connect with us

Breaking News

Exit of multinational pharmaceutical companies: An imperative for developing local production capacity



By Emmanuel Afunwa

In the last quarter of 2023, two Multinational Pharmaceutical Companies, GSK and Sanofi, announced they were leaving the Nigerian market and were changing their business model in the country to be handled by a third party to sell their brands. This means they will not be directly involved in the marketing and promotion of their brands in Nigeria henceforth. In the wake of these announcements Procter and Gamble, another pharmaceutical and consumer goods producer also announced it is exiting the Nigerian market. These pronouncements have left many stakeholders in the pharmaceutical industry befuddled considering the roles multinational companies play in local economies in Africa and particularly in Nigeria. Many households rely on products from these companies to meet their health care needs daily and the fear is that these exits may cause disruptions in the steady supply of essential medicinal products which may lead to scarcity and increased prices. As troubling as this may be, it points to the need for us as a country to consider how to strengthen our capacity for local production of pharmaceutical products to ensure our medicines security as a country.

Reasons for exit of pharmaceutical multinationals

The multinational companies have cited difficulty in getting foreign currencies, poor power supply, congestion at the ports, multiple taxations, regulatory challenges, complex bureaucracies and dwindling profitability as some of the reasons for leaving the country. The Pharmaceutical giants are changing their models of doing business in Nigeria by appointing local vendors to ensure the availability of their products in the country. They claim that with the existing structure their business they were not profitable which necessitated their exit but it is instructive that this is not peculiar with Nigeria as reports also show they are exiting other African economies which they deemed as unprofitable just like in Nigeria.

See also  Heavyweight Showdown: Wilder and Zhang Clash in Saudi Arabia

Impact of exit on local economies

The exit of the multinational pharmaceutical companies will have a huge impact on the local economy. Firstly, there is bound to be job losses which will affect many families and their dependents.

Also, shelves of retail pharmacies are already facing scarcity of popular brands of these companies like GSK’s Ventolin inhalers, Augmentin tablets and syrups which in some cases have risen over 100% above their normal prices.

Given the fact that many Nigerians buy their medicines out-of-pocket without any support of healthcare financing to cushion the cost of their medicines may lead to poor health outcomes with many patients on medications not being able to afford the cost of their medicines.

This may result in those medicines becoming accessible only to wealthy Nigerians who can afford them and unavailable to those who cannot.

This creates some level of health inequity by design where healthcare is available to the wealthy and unavailable to some others.

This defeats the essence of healthcare which should be a fundamental right and accessible to all patients.

The scarcity of these medicines may also lead to patients travelling longer distances to buy their medicines which may result in increased indirect healthcare costs like those spent on transportation, especially with the attendant fuel hike in the country.

For those who have chronic illnesses and are on long-term medications the cost of these medicines may become prohibitive leading to poor health outcomes due to poor adherence to their medicines because of cost.

Importance of local production

This exit may be painful but could be seen as a blessing in disguise.

It might as well be pointing Nigeria towards a direction of opportunity which is to begin investing massively in local pharmaceutical production to meet its local needs for essential medicines.

See also  Army Brigadier General Killed By Suspected Robbers In Abuja

With the growing population, the attendant needs for essential medicines, closeness to growing neighbouring countries and with over 70% of our local pharmaceutical needs being presently imported there is a huge gap to be filled by embarking on local production of pharmaceuticals in Nigeria.

Besides, as a signatory to the Universal Healthcare Coverage (UHC) nothing can be achieved with our current healthcare model without essential medicines to meet the medication needs of the citizens.

This approach will ensure safe, effective and affordable medicines are accessible to Nigerians and set us up on the path to medicine security as a nation. With the position of Nigerian in the West African sub-region and the yawning gap for medicines in those countries and opportunity for export will be created. This can set us the path of moving from consumption to production and increased foreign earnings to grow our economy. Borrowing from models adopted by India and China, who have become the global pharmacies where almost every country patronise for their medicines began by becoming intentional with their objective to become self-sufficient with their local drugs production and started exports thereafter. This is the path Nigeria needs to tow for it to meet its local drugs needs and then expand to exports even if it will begin with just the African markets.

Overcoming inherent challenges

For Nigeria to set out on this path it needs to fix its petrochemicals and power industries. With the current situation of these two industries, Nigeria will remain a sleeping giant. If the petrochemicals industry and the power sector are revamped there is bound to be an influx of investors who will build the needed infrastructure and modern technology that set the country on the path of production instead of consumption which is the level the country is for now.

See also  Facebook, Instagram users experience outage in Nigeria

With a population of over 200 million people, the market is here but with a low production capacity, the economy is below what it should be. With adequate investments in terms of infrastructure with modern technology and necessary regulatory reforms there is bound to be growth in the pharmaceutical industry.

Promoting sustainable solutions: Public-Private Partnerships and capacity building initiatives

With insights from India’s imports of pharmaceuticals into Nigeria in the business year 2021-2022 is close to $ 600 million there is a need to tap into opportunities inherent in the pharmaceutical industry and become another key player in the sector.

The Nigerian government should make the environment conducive to all stakeholders for ease of investment by reforming the regulatory framework, creating production incentive schemes, bulk industrial and production drug parks and special loan schemes for pharmaceutical production.

It could also intervene by funding pharmaceutical research and development, providing financial support for seminars, training, conferences and workshops on pharmaceutical technology upgrades and knowledge transfer to meet WHO-GMP standards, reducing pharma registration red tapes, public-private partnerships are ways the government can encourage small-medium scale players into pharmaceutical production to up their game to scale up their businesses to meet global standards and boost their production capacity initiatives towards achieving the target goals of meeting out local drug needs which is essential for sustainable health security of the country.

Afunwa, a phamarcist and pharmaceutical policy analyst, wrote via

For Diaspora Digital Media Updates click on Whatsapp, or Telegram. For eyewitness accounts/ reports/ articles, write to: Follow us on X (Fomerly Twitter) or Facebook

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest Updates

Open Letter To IGP Egbetokun On His Macabre Dance

Malian Singer Rokia Traore Detained in Italy Amid Child Custody Dispute

Herve Renard Emerges As Top Contender For Vacant Super Eagles Coaching Job

Senegal’s Oil Discovery: A Game-Changer for the Economy?

IGP Egbetokun’s Shameful Antics: A Betrayal of Public Trust

INEC Verifies ADC Secretariat Ahead of Polls 

Kagame Faces Familiar Rivals As Rwanda’s Presidential Election Campaign Begins

Despite Huge Investments, Unviable Airports Dot Nigerian States

Terror Strikes Russia: Coordinated Attacks Leave Multiple Dead

Nigerian who failed WASSCE 17 times honoured with two doctorate in US

Subscribe to DDM Newsletter for Latest News