Nigerians are now paying three times more for antibiotics formerly made by British pharmaceutical giant GlaxoSmithKline (GSK), one year after its exit.
Prices of GSK’s flagship products, Augmentin 228mg and 475mg, have risen by 307 percent and 328 percent respectively between August 2023 when the company exited Nigeria and August 2024, BusinessDay market findings show.
Augmentin 228mg and 475mg cost N12,000 and N18,000 today as against N2,950 and N4,200 in August 2023, according to findings.
The price of Seretide inhaler, an asthma drug by GSK, increased from N7,000 in the first quarter (Q1) of 2023 to as high as N70,000 in November of the same year. It has now settled at N51,300, representing a 632 percent price increase from N7,000 in August 2023.
The price of Amoxyl 500mg has increased 3.5 times to N3,400 in August 2024 from N950 in the same period in 2013.
However, the price of Augmentin 625mg has decreased slightly, dropping from N14,000 in August 2023 to N13,400 in the same period of 2024.
Also Read: Antibiotics Rate 1390% Price Increase As Drug Manufacturers Walk Away
The price of another asthma medication, the Ventolin inhaler, has also dropped slightly from N9,100 to N8,700, due to the increased availability of drug distributors across the country.
The general price hikes only account for half of the financial hardship that GSK’s exit is causing Nigerians, most of whom are already struggling with tight pockets and weak purchasing power.
Shortly after GSK announced its withdrawal from Nigeria and plans to rely on third-party distributors, product shortages emerged as suppliers and retailers stockpiled products, forcing up prices.
As of Q1 2023, Augmentin 1g was sold at about N5,000; 625mg at N4,000; 475mg at N2,700-N3,000 and 228mg at N2950.
However, at the height of the hoarding and hoarding that rocked November 2023, Augmentin 625mg rose by 525 percent to N25,000 in some pharmacies. The 475mg and 228mg brands were sold between N8,000 and N9,000. One gram of the brand fetched N4,000.
Meanwhile, large pharma chains that source from fulfillment centers (FCs), usually third-party suppliers, are still keeping prices relatively the same as they were in the first quarter of 2023.
Also read: What to know about MeCure, the company plans to manufacture Nigeria’s first antibiotic
BusinessDay understands that the decline seen last year for products such as Augmentin 625mg and Ventolin inhaler was due to increased supply in the market, reducing the shortage.
“The Ventolin inhaler was and some Augmentin products were in short supply and came from FC late last year. But they are now supplied by distributors, hence the drop in retail prices,” a source who runs a large pharmacy told BusinessDay.
Samuel Okwuada, CEO and co-founder of Remedial Health, warned that supply may have increased alongside parallel imports and counterfeiting may be playing a role in the supply mix, with bad actors also taking advantage of the exit.
“When we started to have the impact of exit and inflation issues as well, the price of the antibiotics went up to N45,000. It was difficult for people to be able to buy. Almost within a month, we started seeing the same product in the market selling for N10,000 to N15,000. It was not that this manufacturer that had gone out of the market decided to return or decided to lower the price. It was pretty much a fake. So, obviously, for people who are still looking for this drug, it is cheaper. But the problem is that it may not be genuine stuff,” Okwuada, who runs a health technology company that is transforming the pharmaceutical supply chain, told BusinessDay.
Nigeria’s economic challenges, compounded by inflationary pressures and exchange rate fluctuations, have threatened the pharmaceutical sector in the past year.
GSK’s departure followed years of shrinking margins and insurmountable challenges in accessing foreign currency through official channels, which severely hampered its operations.
Patronizing cheaper brands or generic versions of these products has been the coping mechanism for many Nigerians facing hardships due to high drug costs.
Analysts expected that the exit of multinationals, including Sanofi, from Nigeria would open up opportunities for existing companies to explore and expand their market share.
Meristem in its 2024 outlook predicted that these exits would create opportunities for incumbents to further gain market share and also anticipated increases in pharmaceutical and consumer healthcare prices in 2024.
The company projected improved financial performance at the industry level, driven by growth in sales volume and projected price adjustments to align with prevailing macroeconomic conditions.
It noted, however, that there would be a corresponding increase in production costs and operating costs due to expected increases in transport and energy costs as well as persistently high inflation.
So far, MeCure Industries has been the only local company to try to produce amoxicillin-clavulanic acid tablets locally, possibly as a replacement for GSK’s antibiotic, Augmentin 625mg.
Fidson Healthcare Plc already handled contract manufacturing of Panadol, a brand of paracetamol, before GSK pulled out.
According to experts who spoke to BusinessDay, Nigeria’s current challenge of high exchange rates, high interest rates and difficult operating environment is a disincentive for investors.
Patrick Ajah, managing director of May & Baker, told BusinessDay that the exchange rate peg is the main solution to resolve these issues.
He also pointed out that the government must be aware of providing support to pharmaceutical companies such as intervention funds.
“There are companies with the ability to make things like ampicillin and cloxacillin, but they are small and lack the support needed. Many of them have closed their operations or paused them. It is important to encourage businesses to come up,” Ajah said.
“My company was trying to build a facility last year. We had done the market assessment and found a place to build. You cannot build such a facility in the same place where you do other things to prevent pollution. When we were done with the analysis, the devaluation of the naira stopped us. The amount I needed had tripled. We could not start.
“The main thing the government needs to do is fix the exchange rate issue.” That is the biggest problem leading to the prices we are seeing. All our imports are in dollars. There is no way to achieve an exchange rate that was N460 last year and is now over N1500. This is one of the main reasons why multinationals are leaving. It is not the abolition of the fuel subsidy.
“All the money that the multinationals were bringing in had to go through the banking system at the official rate.” You brought in money to come and build a facility at the rate of N360 and now you are going to pay over N1,500 and can’t even find the dollar. Many companies will not handle it. Fixing the exchange rate is one thing that will immediately reset our case,” Ajah said.
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