…total finished goods dropped by 20.6%
Some of the major manufacturers of medicines in Nigeria produced and imported less in the first half of this year, compared to the same period of 2022 on the back of the worsening shortage of foreign exchange in the country.
The total finished goods of five drugmakers dropped by 20.6 percent to N9.36 billion from N11.8 billion, according to data from their unaudited financial statements.
The pharmaceutical firms are Fidson Healthcare, GlaxoSmithKline, May & Baker Nigeria, Neimeth, and Morison Industries. Two of them saw an increase in their finished goods.
“The industry is facing a tremendous challenge in terms of accessing foreign exchange as over the years, access to it has reduced imports, especially for raw materials,” Sam Ohuabunwa, the immediate past president of the Pharmaceutical Society of Nigeria, said.
He said the decline in pharmaceutical imports had nothing to do with local production.
“The devaluation of the naira led to a depression in the demand for drugs. And with high inflation and devaluation, it becomes difficult for businesses in the pharmaceutical industry to recover the price and when they try to recover it, their products become unaffordable,” Ohuabunwa said.
Ayodeji Alaran, managing director at PBR Life Sciences, said pharmaceutical companies are struggling to meet the medical needs of the population. “They need to be supported.”
Data from the International Trade Centre, a multilateral agency, shows that the importation of pharmaceutical products into Nigeria reduced for the second straight time to $1.05 billion in 2022, a 23.4 percent decline from $1.37 billion in 2021.
Before the Central Bank of Nigeria collapsed all segments of the FX market into the Investors & Exporters window in June, the country’s dollar liquidity crisis had worsened on the back of the Russia-Ukraine crisis, which started in February last year.
The naira depreciated from 416.52/$1 as of February 28, 2022, to N771.59/$1 on September 7, 2023, at the official market. At the parallel market, popularly called the black market, the dollar was quoted at N925 from N575.
Everything in the pharmaceutical industry is imported from raw materials to packaging, according to Gabriel Idahosa, deputy president of the Lagos Chamber of Commerce and Industry (LCCI).
“The healthcare industry is in a very difficult situation now. The healthcare security of Nigerians is in jeopardy because the drugs for treating common illnesses such as malaria and cough are getting expensive by the day,” he said.
Africa’s most populous nation relies heavily on imported drugs, active pharmaceutical ingredients and equipment used in drug manufacturing from China, India, Malaysia and the Netherlands.
Pharma West Africa, a major pharmaceutical exhibition in Africa, said that over 70 percent of medicines in Nigeria are imported, with medicines accounting for a chunk of the country’s total healthcare spend of $10 billion.
“Out-of-pocket expenditure can be as high as 62 percent of total healthcare expenditure, mainly due to limited access to health insurance,” it said on its website.
Here are further details on the companies:
Fidson Healthcare
Fidson Healthcare’s finished goods grew to N5.07 billion in H1 this year from N4.96 billion in the same period of 2022.
The firm’s total inventories dropped to N13.5 billion from N14.62 billion. Its goods-in-transit dropped to N4.42 billion from N5 billion, while raw and packaging materials dipped to N3.67 billion from N3.94 billion.
Work-in-progress recorded in the inventory amounted to N40.9 million, down from N527.3 million. Engineering spare parts grew to N289.3 million from N92.4 million, while promotional and other consumable materials increased to N197.5 million from N189.5 million.
GlaxoSmithKline Nigeria
GlaxoSmithKline Nigeria announced plans last month to exit the country after 51 years of operations.
The company saw its gross value of finished goods decline to N2.28 billion in H1 2023 from N5.26 billion in the same period of 2022.
The firm’s total inventories dipped to N2.18 billion from N5.21 billion.
Morison Industries
Morison Industries’ finished goods dropped to N13.9 million in H1 2023 from N22.2 million in the same period of 2022.
The firm’s total inventories dropped to N27.9 million from N40.57 million. Raw materials in inventories grew to N14.1 million from N28.6 million.
May & Baker Nigeria
May & Baker’s finished goods rose slightly to N1.08 billion in H1 2023 from N1.06 billion in the same period of 2022.
The firm’s total inventories increased to N4.84 billion from N4.45 billion.
Raw and packaging materials in inventories grew to N3.03 billion from N2.59 billion, while work-in-progress recorded in the inventories stood at N277.3 million, up from N255.8 million.
Neimeth International Pharmaceuticals
Neimeth’s finished goods grew to N911.2 million in H1 2023 from N490.53 million in the same period of 2022.
The firm’s total inventories grew to N1.82 billion from N1.65 billion.
Raw materials stood at N764.2 million, up from N802.7 million, while work in progress rose to N78.1 million from N145.9 million.
Spare parts in inventories amounted to N31.3 million, down from N18.6 million, while goods in transit fell to N35.5 million from N196.3 million.
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