The recent departure of GlaxoSmithKline (GSK) from the Nigerian pharmaceutical market has sent shockwaves through the healthcare landscape, resulting in a significant escalation in the prices of GSK medications.
Reports indicate that the surge in prices has reached alarming levels, with increases soaring up to 1000 per cent, prompting widespread concern and frustration among Nigerians, particularly voiced on various social media platforms.
This sudden spike in drug costs can be attributed to a confluence of factors, primarily the withdrawal of GSK, a major pharmaceutical player, and the escalating inflation rates in Nigeria.
As of October 2023, the National Bureau of Statistics (NBS) recorded an inflation rate of 27.33 per cent, marking the highest level since August 2005.
The persistent upward trajectory of inflation has been a driving force behind the soaring costs of diverse goods and services, including crucial pharmaceutical products.
GlaxoSmithKline’s decision, communicated on August 3, to discontinue the direct commercialization of prescription medicines and vaccines in Nigeria has sent shockwaves through the industry.
The company, based in the UK, outlined a strategic shift towards adopting a third-party direct distribution model for its pharmaceutical products within the country.
This strategic realignment was prompted by a range of operational challenges, notably the difficulty in maintaining a consistent supply of GSK drugs in the Nigerian market.
Challenges related to the scarcity of foreign exchange further compounded GSK’s ability to manage and settle foreign currency-denominated trade payables with its product suppliers. External factors, including regional insecurity, the government’s removal of fuel subsidies, and the overall high cost of doing business in Nigeria, collectively influenced GSK’s strategic decision to exit the Nigerian pharmaceutical market.
In the aftermath of GSK’s announcement, reports from pharmaceutical product traders reveal a conspicuous scarcity of GSK drugs nationwide.
Community pharmacies, particularly in Lagos, are grappling with significant challenges in procuring various GSK medicines, leading to decreased availability.
Pharmacists on the ground attribute these difficulties to the dwindling supply of GSK drugs.
A pharmacist emphasized, “Prices are soaring because of the major issue of the foreign exchange rate, then companies that left Nigeria, for instance, GSK, and they control most of the market products, something Nigerians are not really aware of.
We also have companies planning to leave, so there will be more shortage of medicines leading to price increase.”
Another pharmacist pointed out, “The scarcity of these medicines creates an increase in demand, which leads to an increase in prices of medicines.
If these companies left the country and directly imported medicines, they wouldn’t be this expensive, but based on exchange rates and certain government policies on importation, that’s why they are expensive.”
As Nigeria grapples with the repercussions of GSK’s exit, the intersection of economic challenges and healthcare needs poses significant hurdles for the accessibility and affordability of essential medicines in the country.
The unfolding scenario underscores the intricate relationship between global pharmaceutical dynamics and local healthcare resilience.
