The high cost of drugs in the country would persist, as local production of the products is near total collapse due to inconsistencies in government policies.
Though the Nigerian pharmaceutical market boasts over 200 manufacturing and packaging companies made up of three dominant segments of readily available over-the-counter drugs (43.1 per cent), affordable generics (38.9 per cent), and expensive branded patented drugs (12 per cent), the drug market in the country has been dominated completely by imported drugs which comes to the average Nigerian at a very high cost.
Consequently, the cost of drugs in Nigeria has become very expensive, as the prices of imported drugs are dominated in dollars.
Data from Pharma West Africa rate the industry as the second largest in Africa, after South Africa, with an estimated market size of about ¦ 6.1 trillion according to data from Access Bank.
Market research from Goldstein Research predicted that the local pharma market size would increase at a Compound Annual Growth Rate, CAGR, of 9.1 per cent between 2017 and 2030.
Projections foresee a value surpassing N3.26 trillion by 2025 driven by a CAGR, of 11.5 per cent according to Access Bank Plc. Similarly, McKinsey & Company forecasts the market size to top N5.5 trillion by 2026. These projections highlight the immense potential of this sector in Nigeria.
Beneath this shiny surface, however, lies a dark side to the impressive credentials — stagnation.
Local drug manufacturing struggles to keep pace with the rapid growth. Many local pharmacies are overflowing with imported medications -a paradox. While the market thrives, domestic manufacturing which has capacity utilization below 50 per cent, cannot keep pace.
Currently, Nigeria manufactures only around 25 per cent of its pharmaceutical needs. Worse still, despite having a large domestic manufacturing sector, a staggering 70 per cent of medicines are imported (essentially from China and India) either legally or smuggled illegally. Estimates suggest only 30 per cent of Nigerians have access to genuine medications.
To address the imbalance, the Federal Government implemented various protective measures to stimulate local production by placing a ban on the importation of certain pharmaceutical products.
Since 2000, a host of products have been added to the list of banned items.
They include antipyretics such as paracetamol and aspirin, antimalarials, antibiotics, vitamin B complex tablets, multivitamin tablets, capsules and syrups (except special formulations), among a host of others.
But even as these measures aim to boost domestic manufacturing, challenges persist and overall success remains hinged on overcoming limitations in domestic manufacturing capacity.
Nigeria’s spending on imported pharmaceuticals has risen dramatically in recent years, according to a report by the Raw Materials Research and Development Council, RMRDC, which is the Federal Government’s agency responsible for industrial raw materials growth, promotion and utilisation,
From the RMRDC data, between 2017 and 2023, Nigeria committed over N3 trillion to the importation of pharmaceutical products. In 2016, over N126 billion went into pharmaceutical imports, dropping to about N119 billion in 2017 and rising to N185.5 billion in 2018.
There was a significant increase in importation spending from N520 billion in 2019 to N1trillion in 2020, a surge of 92.31 per cent.
Although there were decreases in 2021 and 2022, spending on imports remained considerably high at N544.4 billion and N445.7 billion respectively.
Industry watchers say the sharp rise in 2020 is attributable to the COVID-19 pandemic, which increased demand for medications and medical supplies worldwide.
However, the overall trend highlights Nigeria’s growing reliance on imported pharmaceuticals, which portends grave challenges for the country’s healthcare system in the long run.
With domestic production perpetually struggling to meet even a quarter of the country’s demand for medicines, a dangerous dependence on imports is inevitable, raising concerns about affordability and availability of essential drugs.
For many Nigerians, the local pharmaceutical business is in dire straits, with challenges from securing forex to basic operational challenges.
Indeed, the fortunes of Nigeria’s pharmaceutical drug market is divided. Despite the market surge, Nigeria’s private pharmaceutical manufacturing sector remains relatively small, with a share of manufacturing in the country’s GDP of only about four per cent.
Over the years, numerous local manufacturers have been compelled to close shop and the cascading impact is increasing susceptibility of Nigerians to shortages of local medicines and more reliance on foreign medications.
Industry watchers argue that only local manufacturing of drugs could guarantee Nigerians’ have access to essential medications and reduce dependence on foreign imports.
