Since the inception of the pharmaceutical industry in the 19th century, it has come a long way, and since emerged as one of the most influential and successful industries in the world. As the Pharmaceutical Society of Nigeria (PSN) congregate in Minna this November to deliberate, PharmaTimes tries to pre-empt the discourse in matters relating to the practice of pharmacy in the country.
The discovery of insulin and penicillin by Fredrick Bating and Alexander Fleming respectively in the 1920s indeed marked the beginning of modern pharmaceutical industry that has become a major contributor to the economy of many nations of the world. Apart from providing health benefits to populations around the world, the impact of Research & Development in the industry is being felt in the discovery and development of new medicines, creation of highly skilled jobs and stimulating high level innovations.
In most advanced countries of the world, pharmaceutical companies are the most successful research based industries. For instance, the industry is nicknamed the acclaimed jewel in the United Kingdom’s scientific and industrial crown because of its capacity to support ‘knowledge-intensive industries’. In the United States, the biopharmaceutical sector alone is said to have contributed significantly to the economic development of the country in diverse ways. For instance the sector has offered employment to nearly 850,000 workers while supporting over 3.4 million jobs, and that is in 2014 alone.
In India, China, Japan and a host of other nations, the pharmaceutical industry has directly and indirectly contributed tremendously to their development. However, in Nigeria, it has not exactly been able to measure up as a result of a number of challenges besetting it.
The pharmaceutical industry in Nigeria currently operates under challenging business environment with the attendant limitations on the efforts of operators to maximise the full potentials readily available in this important health sub-sector in the Nigerian economy. The challenge posed by infrastructural decay is perhaps the biggest among the list, and a major source of worry for local manufacturers of medicines in the country.
The absence of stable electricity has forced manufacturing companies to spend huge sums of money in alternative sources of power such as generators, solar energies and inverters among others. Each of these options cost a lot of money to maintain, and consequently drive the cost of production to the roof.
Aside infrastructural decay, access to low interest funding is another major constraint being encountered by operators to increase and improve capacity of pharmaceutical companies to operate effectively and also compete favourably with their counterparts in other parts of the world. Whereas lending to the industry in most countries outside Nigeria reportedly hover around the single digit rate, most lending institutions in Nigeria are unyielding in pegging their lending rates to as high as 20 per cent!
Stakeholders believe that standards in the industry are always changing and as a technologically- driven sector, funding is key to meeting the demands posed by the dynamics in the industry. As the MD/CEO of May & Baker Pharmaceutical Plc., Mr. Nnamdi Okafor observed recently during an interview session, “You need the right equipment and materials that meet the highest standards because drugs are meant to take care of ailments and not to cause more problems.”
The matter is even made worse with the current economic recession which has triggered enormous difficulties in accessing foreign exchange for import of raw materials needed for production of drugs. In fact, the Pharmaceutical Society of Nigeria (PSN), the umbrella body of registered pharmacists in Nigeria had warned that if government does not tackle the forex crisis urgently a national calamity looms with dire consequences on the morbidity and mortality rates in the country.
In a communiqué issued at the end of the society’s annual national council meeting which held in Kano recently and signed by Pharm. Ahmed Yakasai and Pharm. Gbolagade Iyiola, president and national secretary respectively, PSN, said that the paucity of forex in the country is gradually grinding operations in drug manufacturing and importation.
The umbrella body of pharmacists in Nigeria further disclosed that empty warehouses of a plethora of pharmaceutical companies occasioned by inaccessibility to forex to source finished products, active pharmaceutical ingredients and other excipients will naturally breed out of stock syndrome in the inventory of life saving drugs and therefore appealed to the Federal Government to intervene and reduce the difficulties its members are facing at the moment. According to operators, 98 percent of raw materials being used in the production of drugs in Nigeria are imported.
Obviously, government has an important role to play in facilitating investments in the pharmaceutical sector if the country is willing to harness the huge potentials that abound in this sector. There is no time most auspicious than now for government to create an enabling environment for pharmaceutical industry to thrive and contribute its quota in the national economy.
The present administration’s policy of cutting down on imports and encouraging local manufacture of goods should find its meaning in this important sector. Manufacturers had at various times appealed to government to provide them with some form of reliefs and incentives to enable them compete favourably with their counterparts in other parts of the world.
The policy of zero percent duty imposed by government on imported finished drug products as against 5 to 20 percent duty for imported raw materials for local manufacture of the same products is seen by operators and indeed stakeholders in the industry as a big threat to the development of the sector. The reason is simple. Locally manufactured drugs cannot compete favourably with imported ones – produced at relatively low costs from overseas companies.
Counterfeiting of drugs is also a major source of worry for manufacturers in Nigeria. Despite the efforts of NAFDAC to curb the menace, unscrupulous elements in the society who are engaged in this dangerous business are not giving up as they constantly device new methods of beating security surveillance and operation.
And as the former Registrar of the Pharmacy Council of Nigeria (PCN), Dr. Ahmed Tijjani remarked recently, unless the existing laws are enforced and new ones enacted to strengthen operations of law enforcement agents, the challenge posed by the activities of counterfeiters may not go away easily. He also contends that for the industry and profession to be better positioned to play its role in the country, only qualified and registered pharmacists should be allowed to deal on drugs.
The former PCN boss is not alone in this line of thinking. Before exiting office, the immediate past Director General of NAFDAC, Dr. Paul Orhii, who deployed technological tools in the fight against counterfeiting with considerable success, had advocated for the review of existing laws in other to effectively combat the menace. He premised his advocacy on visible flaws in the existing laws which have bolstered the operations of counterfeiters and hamstrung NAFDAC in effecting prosecution of offenders.
The Pharmaceutical Manufacturing Group (PMG), the umbrella body of manufacturers of pharmaceutical companies operating in Nigeria on its part, has not failed to seize every opportunity available to catalogue the enormous challenges confronting its members in operating at optimum rates.
The challenges, according to PMG are products of unfavourable policies of government over the years. The umbrella body of drug manufacturers in the country believes that government should protect them from running at a loss in their investments in the industry by implementing policies that will encourage local manufacturers of medicines. PMG is of the view that one way government can assist its members is by increasing the list of drugs prohibited for import, and assist local manufacturers to enhance their capacity to produce through provision of single digit loans and concession on imported raw materials among other requests.
The thinking in PMG circles is that if local manufacturers are given the necessary incentives, the industry has the capacity of employing a good number of unemployed youth, and the cost of medicines would be competing favourably with imported ones among other benefits. Besides, the near absence of an effective and efficient research and development centre of international standard in the country is also a big challenge to the growth of the industry.
“Almost anything can be turned around: out of every ditch, a path, if you can only see it.” – Hilary Mantel
Despite the seemingly grave challenges currently besetting the pharmaceutical industry, there are also huge opportunities that abound in it if only stakeholders, existing and potential investors can leverage on emerging statistics in the industry at both continental and sub-regional levels, to work out a strategic way forward for Nigerian operators.
Pharmaceuticals no doubt are an extraordinarily profitable business; the most profitable, in fact, looking at reported figures of past years and the future projections by industry watchers and experts.
In fact, the world pharmaceutical market is said to be worth about $1.6 Trillion currently, and it is expected to increase by 7.2 per cent at a year-on-year increase up to 2020, according to Frost and Sullivan, an internationally reputable consulting firm that specialises in providing market research and analysis in a recent survey it conducted.
With particular reference to Nigeria and Ghana, the consulting firm believes that a strong business opportunity exists for big pharmaceutical and generic pharmaceutical companies in both countries because the tropical climate in which Nigeria and Ghana are situated makes the areas a hotbed for infectious diseases, particularly malaria, tuberculosis and AIDS among numerous others.
Outbreaks of polio, meningitis, cholera, pandemic influenza, yellow fever, measles, hepatitis and tetanus among other diseases, are also frequent in the tropics. It also took cognisance of the rising adoption of western diet and sedentary lifestyle among the citizenry of both countries to trigger a paradigm shift in the burden of illness towards non-communicable diseases (NCDs) such as cardiovascular disease, cancer, diabetes and respiratory disease expected to witness a high growth rate between now and 2020.
It however noted that with a combined revenue base estimated to reach $3.12 billion in 2018 from $1.63 billion in 2003 at a compound growth rate of 13.39 per cent, the pharmaceutical industry in Nigeria and Ghana is very promising for investors.
In conclusion, the consulting firm believes that pharmaceutical companies would do well to develop efficacious drugs to treat NCDs as the World Health Organisation predicts that the proportional contribution of these diseases to the healthcare burden in Africa will rise by 21 per cent through 2030.
Pricewaterhouse Cooper, a reputable consulting firm, in its recent forecasts further reinforces the belief among experts that the future of pharmaceutical industry remains bright when it revealed that there is escalating demand for pharmaceutical products because of a global population increase as well as changing lifestyles of people.
It noted that pharmaceutical firms are in for big business because the incidence of infectious diseases is increasing in virtually every part of the world partly because some diseases have become drug-resistant, and that is compelling the international community to urgently find ways of addressing the challenge.
Opportunities in Nigeria
The pharmaceutical industry in Nigeria stands in a better position to lead its counterparts in Africa in terms of productivity and prosperity if properly re-positioned. The Pharmaceutical industry is like any other investment that thrives in population density generally referred to in business parlance as customer base. This is because by it investors assess and determine the profitability or otherwise of a business they are interested in.
With a population of 180 million currently, the largest in Africa and abundance of human and natural resources, investment in the industry has a high potential of succeeding faster than any other country in the region. Besides, the estimated population increase to 200 million by 2020 according to recent forecasts means that the disease burden of the country will increase and consequently escalate demand for pharmaceutical products.
There is also the possibility of some of the private and public tertiary institutions operating in Nigeria attracting funds for research purposes because of their reputation and set up. The achievements of some of the universities had placed them in the mould of centres of excellence and as such, they could be helpful in research and development aspects of pharmaceutical industry demand.
As one of the largest producers of crude in the world, there is also the likelihood of investment interests in the petrochemical industry. If that happens, production of Active Pharmaceutical Ingredients (APIs) will bolster investments in the industry.
HARNESSING OPPORTUNITIES IN THE PHARMA INDUSTRY
For operators of the pharmaceutical industry in the country to harness the huge opportunities that abound, there is the urgent need for attitudinal change towards creativity. Companies that will record high productivity and profitability in the industry would be those companies that would be creative in thinking and smart in designing their business modules.
From accounts of internationally reputable consulting firms like Pricewaterhouse Cooper, and Frost and Sullivan, the pharmaceutical industry in the African region is expected to be the fastest growing in the world due to escalating disease burden occasioned by factors that are dynamic in form. Therefore, it is imperative for pharmaceutical manufacturing companies in Nigeria to re-position their operations in other to maximise the opportunities that are imminent, and there are effective ways to achieve that.
First, pharmaceutical companies in Nigeria would need to eschew the culture of counting their woes at all times and instead, begin to seek ways of partnering with government and working closely with each other in other to engage meaningfully in the development of locally made products.
There is the need for manufacturers of pharmaceutical products in Nigeria to concentrate on their core business areas in other to effectively grow their businesses. Two of the world’s top drug makers, Novartis and GlaxoSmithKline are a perfect example of this kind of engagement. The two drug manufacturing giants had in 2014, struck a multi-billion-dollar deal by swapping assets and combining their efforts and consequently, generating good returns on investments to shareholders.
It is also imperative for operators of pharmaceutical companies to collaborate and partner each other for the purpose of raising funds that would be devoted to research and development initiatives – a major component for the manufacture of quality medicines of the future.
In the same way, it would be beneficial for pharmaceutical companies to collaborate and sponsor or support research initiatives by themselves or by reputable tertiary institutions in the country on aspects of pharmaceutical products manufacture. Who says that the much needed medicines for the cure of malaria and other diseases ravaging African nations cannot be discovered in Nigeria?
In conclusion, there is indeed ‘a path in every ditch, for those who can see it.’ The path may be hard strewn with impediments just like what operators and indeed stakeholders in the pharmaceutical industry in Nigeria had witnessed over the years – going by their various accounts; however, such challenges are also surmountable by those who could make the right decisions.