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The pharma industry has a critical role to play in Nigeria’s health sector. With life expectancy of 54 years, doctor to patient ratio of 1/7000 compared to the World Health Organisation (WHO) recommended 1/600, and surveys showing only about 30% of Nigerians have access to wholesome medicines and pharmacy care, the importance of this sector cannot be overemphasised.
The community/retail pharmacy and to a large extent, patent medicine practitioners are the most easily accessible points of call for basic ailments by majority of Nigerians.
The industry is fragmented at every level with many independent small size players across the board.Nigeria has about 200 active manufacturing and packaging firms mostly located in Lagos, Onitsha, and Kano.
Over 90% of inputs are imported mainly from India and China. These local producers in aggregate terms control approximately 30% of the market.
The commercialisation model for most brand/product owners is a hybrid of wholesale push and direct to retail – pharmacies, patent medicine stores, clinics and hospitals.
Some of the companies undertake expert marketing activities, otherwise called detailing, to facilitate recommendations and pull for their product lines. The process of commercialisation in the industry is sometimes fraught with issues of ethical compromise.
In the downstream sector, records at the Pharmacists Council of Nigeria state that there are about 5,000 registered retailers and wholesalers located in 140 of the 774 local governments in the country. Most of the registered outlets are located in major cities and a few tier 2 cities because of the higher disposable income levels in these locations.
The majority of Nigerians source their pharmaceutical products from traditional channels called patent medicine dealers and chemists which are located on street corners in tier 2/3 cities and in some tier 1 cities.
Nigerian pharmaceutical products which include open markets, kiosks, table tops and hawkers which can be seen in all towns across the country. These traditional outlets are estimated to be over 100,000 (with only about 40,000 registered with the Pharmacists Council of Nigeria) and in most instances, lack the capability to meet standards that will ensure wholesomeness of medicines they stock.
Nigeria’s pharma industry has been evolving, albeit slowly with a few retail chains with as many as 50 outlets emerging with branches across major cities as well as regional players with as many as 10-15 outlets.
Major cities including Lagos, Onitsha, Aba and Kano control about 80% of wholesale business while Lagos, Abuja and Port Harcourt control over 60% of formal retail. This follows relatively sizeable disposable income levels in these cities.
There are high incidence of ‘passing off’ and ‘copying’ which may not have been tracked by regulatory authorities and brand owners. Passing off/copying means unscrupulous players cloning brands of successful companies and selling at much lower prices, sometimes at 20%-40% discount.
The pharma industry is regulated by various bodies including the National Agency for Food and Drug Administration and Control (NAFDAC), Pharmacists’ Council of Nigeria, Standards Organisation of Nigeria, the Federal Ministry of Health, local governments and other professional bodies.
The Nigerian Pharmaceutical industry, during the pre-independence era focused primarily on the marketing and distribution of imported drugs. Afterwards, foreign manufacturers began to establish manufacturing plants in the country. The indigenization policy of 1978 changed the course of the industry as these foreign manufacturers were incited into selling at least 60% of their ownership stakes to Nigerians, thus increasing domestic participation.
The Nigerian pharmaceutical market is a dynamic and growing sector with significant potential for both domestic and international players. With a population of over 219 million, Nigeria is the most populous country in Africa and represents a vast market for pharmaceutical products.
Nigeria provide strong business opportunities for big pharmaceutical and generic pharmaceutical companies because the tropical climate in which Nigeria is situated makes the areas a hotbed for infectious diseases, particularly malaria, tuberculosis and AIDS among numerous others.
In Nigeria’s predominantly informal distribution and retail networks, counterfeit and parallel medicines are often difficult to distinguish from the genuine article. Estimates suggest that informal retail accounts for more than three-quarters of the value of the pharma market, and parallel imports for up to half of drugs sold in some TAs.
The Nigerian Pharmaceutical market is the second largest market in Africa (after South Africa), supplying more than more than 60% of the drugs consumed in the West African sub-region. The top 10 local producers controlling less than 25% of industry revenue. The industry is said to have over 130 drug manufacturers with majority of the indigenous drug manufacturers engaged in the production of generic drugs owing to the high Research and Development (R&D) costs.
The industry is faced with numerous challenges such as low-capacity utilization, a weak financial base, high cost of raw materials, poor infrastructure and low level/ obsolete technology, difficulties meeting World Health Organization (WHO) pre-qualification criteria, high-interest rate and unstable demand amongst others.
The Nigerian pharmaceutical industry has the potential to become a major player in the global market. The country has a large and growing population, and there is a strong demand for affordable and quality medicines.
In May 2022, the National Government of Nigeria signed a new National Health Insurance Act which will mandates health insurance for workers and all Nigerians. As this is introduced over the next few years, there will be significant changes in the ways medicines are used and acquired.
According to the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN), the Nigerian pharmaceutical industry has the capacity to be a giant in the manufacturing, distribution, and sale of pharmaceutical products in Sub-Saharan Africa.
The Nigerian health sector was ranked 187th out of 191 members by the World Health Organization (WHO) in 2000 [5]. This poor rating of the sector was due to several factors tied to poverty, high prevalence of Corresponding author: Melody Okereke, BPharm Faculty of Pharmaceutical Sciences, University of Ilorin Kwara State, Nigeria Email: [email protected] diseases, malnutrition, etc. Another factor that stands out is the apparent lack of standardized equipment and machinery for the production, distribution, and storage of pharmaceuticals.
According to the Pharmaceutical Society of Nigeria (PSN), over the last few years, Nigeria has struggled with a lack of foreign exchange, which has contributed to a 200% rise in the cost of imported drugs.
The lack of sufficient demand for locally manufactured drugs due to cheaper imports from China and India would result in poor manufacturing capacity and will have a detrimental impact on previous investments in the industry.
To strengthen the Nigerian pharmaceutical manufacturing capacity, the government, regulators, policymakers, pharma companies, and other relevant stakeholders must address the political, socioeconomic, financial, and regulatory barriers such as high taxes, high energy costs, poor infrastructure, insecurity, poor funding, and unfavorable policy changes.
The Nigeria Pharmaceutical Market accounted for $XX Billion in 2023 and is anticipated to reach $XX Billion by 2030, registering a CAGR of XX% from 2024 to 2030.
GlaxoSmithKline Exits Nigerian Pharmaceutical Market
In August 2023, GlaxoSmithKline (GSK) announced its decision to exit the Nigerian pharmaceutical market, concluding its over 51-year presence in the country. The decision was attributed to a combination of challenges in the market, including foreign exchange complexities, security concerns, and high operational costs.
Nigeria Receives Healthcare Booster from Private Capital
The healthcare sector in Nigeria is set to receive a boost from private capital, according to a recent report by the global community of investors. The report highlights several positive health and wellness indicators in the country, suggesting that opportunities are opening up due to efforts to strengthen the healthcare sector in recent years.
Open Drug Market Shut Down in Kano
The Kano State government has ordered the closure of the Sabon-Gari open drug market, directing dealers to relocate to the Coordinator Wholesale Centre at the Kano Economic City. This move aims to curb the sale of counterfeit and substandard drugs in the state.
Pharmaceutical Development Fund to Provide Loans to Local Manufacturers
The Nigerian government has established the Pharmaceutical Development Fund, which will provide loans to local manufacturers to support the growth of the pharmaceutical industry. The fund is expected to play a crucial role in reducing reliance on imported medicines and promoting domestic production.
Rising Prevalence of Non-Communicable Diseases (NCDs)
NCDs such as hypertension, diabetes, and cancer are on the rise in Nigeria. This is due to factors such as urbanization, changes in diet and lifestyle, and an aging population. As a result, there is a growing demand for medicines to treat NCDs.
Growth of Telemedicine and E-Pharmacy
The use of telemedicine and e-pharmacy is growing in Nigeria. This is due to the increasing penetration of smartphones and mobile internet access. Telemedicine and e-pharmacy are providing patients with convenient and affordable access to medicines and healthcare services.
New Treatments for Infectious Diseases
Infectious diseases remain a major public health challenge in Nigeria. New treatments are being developed to combat diseases such as malaria, tuberculosis, and HIV/AIDS. These treatments include new antimalarial drugs, improved formulations of tuberculosis medications, and long-acting injectable HIV/AIDS treatments.
Innovative Therapies for Non-Communicable Diseases (NCDs)
NCDs such as hypertension, diabetes, and cancer are on the rise in Nigeria. New therapies are being developed to treat and manage these diseases more effectively. These therapies include novel antihypertensives, glucose-lowering medications for diabetes, and targeted cancer therapies.
Vaccines and Immunotherapies
The development of new vaccines and immunotherapies is a major focus in the Nigerian pharmaceutical industry. These products have the potential to prevent and treat infectious diseases and certain types of cancer.
Traditional Medicine Integration
There is a growing interest in integrating traditional medicine into the Nigerian healthcare system. Several companies are working to standardize and validate traditional medicines for use in modern healthcare settings. The development of these new pharmaceutical products is a testament to the growing innovation and scientific expertise in the Nigerian pharmaceutical industry.
“With the new guidelines, there will be a system of organised distribution of drugs that will guarantee that the drugs that are available are safe and effective.
“The event is being promoted to help the government provide Nigerians with the best pharmaceutical services and to safeguard the interests of practitioners and the general public.
Additionally, it is being promoted in order to foster indigenous entrepreneurship.
To address the major issues plaguing Nigeria’s pharmaceutical market, ULCO will operate as a business with a social enterprise focus.
The purpose of the launch, which will be presided over by former Permanent Secretary of the Federal Ministry of Power, is to encourage all potential investors to contribute to the organisation’s rise to a prestigious status.
