In recent times, Nigeria has witnessed a concerning phenomenon: the departure of pharmaceutical companies due to economic challenges. GlaxoSmithKline (GSK), one of the major players in the industry, recently announced its decision to wrap up its business operations in the country after 51 years of operation. As a result, critical drugs like Augmentin and inhalers are becoming scarce, leading to significant implications for patients who need them most.
Drug retailers, like Muhammed Bude, believe GlaxoSmithKline’s decision to cease production in Nigeria stems from the high cost of doing business in the country and is associated with the scarcity of foreign exchange currencies. According to his narration, the departure exacerbates existing shortages of essential medications like Augmentin and Ampiclox Becham, widely used for the treatment of bacterial infections.
Other GSK products, like Panadol, face similar challenges. Over the past few years, Panadol prices have skyrocketed—from selling at 1000 to 1500 naira per pack to now hovering around 2000 naira. Even more alarming is the price surge for a carton of Panadol, which has jumped from 35,000 naira to a staggering 100,000 naira—a more than one hundred percent increase in the last three years.
Though GSK intends to hand over the production of some of its products to a third party, according to Bude, this will also cause more inflation, further catapulting the already inflated prices.
“We have seen drugs like Augmentin, Ampiclox Becham, and Ventolin Inhaler, among others, go out of stock. And it’s sad because they are among the most used drugs,” noted Bude.
The story is not isolated to over-the-counter drugs. Vital medications for chronic illnesses like hypertension, diabetes, and kidney diseases have seen prices soaring beyond affordability. Rufus Okafor, a Sokoto-based man in his 70s, has battled hypertension for years. His son, who procures the required medicines for Rufus, revealed the cruel reality of both scarcity and the expensive prices of drugs.
Adomet is one of the drugs Rufus is required to take on a regular basis. However, as his son narrated, the family struggled to procure it due to its soaring price. The price of Adomet has catapulted from 250 naira to a staggering 650 naira. This is one of the other three drugs Rufus must not lack at any time.
For a disease that necessitates regular medication, the hike in drug prices leaves patients and their families with few alternatives and a growing sense of despair. One of them is Aliyu Umar, a 12-year-old boy from Kebbi State battling kidney disease. Umar was booked for surgery but had to delay it because, according to Aliyu’s father, Abdullahi Umar, they could not afford the bill. Umar and Abdullahi find themselves in a heart-wrenching dilemma as the helpless father watches his son battle life and death.
“It’s so disheartening how things are becoming so expensive,” said Abdullahi, tears floating down his eyelid. “Medication shouldn’t be too expensive to this extent.”
Abdullahi’s lamentation is the voice of many Nigerians living in extreme poverty, some of whom have chosen to abstain from hospitals because of the hospital bills and the prices of medications. In its 2022 Multidimensional Poverty Index Survey, the National Bureau of Statistics said 63 percent of Nigeria’s population, which represents approximately 130 million people, are poor. Hikes in the price of drugs mean poor people are targeted and isolated from receiving medical care, something that translates to a mass denial of affordable healthcare.
Nigeria’s Foreign Exchange Crisis
Nigeria grapples with an acute shortage of foreign exchange, primarily driven by the overwhelming demand for US dollars, which far exceeds the supply from the central bank. To address this challenge, the apex bank unified the exchange currencies, a policy meant to halt the artificial exchange rates. This has also caused a significant devaluation of the naira, Nigeria’s national currency, particularly in the parallel market where the majority of foreign exchange transactions occur. As of October 27, 2023, one US dollar was trading at approximately N1,200 in the parallel market, a stark contrast to the official rate of N780.
The currency devaluation has led to a surge in inflation, which reached 19.7 percent in September 2023. It has escalated the costs associated with production and imports while simultaneously eroding investor confidence. Economists traced the primary root of the foreign exchange crisis to Nigeria’s heavy reliance on oil revenues as its primary export. The global oil price slump and the economic ramifications of the COVID-19 pandemic have severely impacted these revenues, causing depreciation.
In January 2020, the price of oil plummeted from over USD 60 per barrel to below USD 20 per barrel in April 2020, while the pandemic brought about a worldwide economic contraction that substantially reduced the demand for oil. The President Tinubu-led government and the Central Bank of Nigeria have implemented various measures to address the situation, some of which were currency unification and the lifting of the ban on restricted items to access forex. However, these measures have been insufficient to solve the crisis.
Due to the scarcity of foreign exchange currency, Nigeria’s imports have been on a sloppy trend in recent years. The country’s imports in 2022 amounted to $1.05 billion, which was a 23.4 percent decline from $1.37 billion in 2022. It also declined by 63.0 percent from $2.84 billion in 2020. Nigeria’s importation streak has been decreasing since 2015, when it last reached its peak of $52.59 billion.
As Nigeria’s importation received a fatal blow, the pharmaceutical industry, which largely depends on importation, had its bitter share.
Recent data from the International Trade Centre’s Trade Map Database shows that Nigeria’s imports of pharmaceutical products decreased from $2.84 billion in 2020 to $1.37 billion in 2021 and further to $1.05 billion in 2022. This represents a decline of 51.8 percent and 23.4 percent, respectively. Also, Nigeria’s exports of pharmaceutical products decreased from $2.21 million in 2020 to $779,000 in 2022, which represents a decline of 64.8 percent.
Pharmacists Raise Alarm
The scarcity of vital drugs does more than empty pockets; it erodes trust in the healthcare system, noted Marylinda Malooly, an intern at the Pharmacy Council of Nigeria. According to her, patients are becoming disillusioned, with some choosing not to seek medical care due to the uncertainty of drug availability and lack of affordability. With the patient population hesitant to receive treatment, she considered the health sector burdened by challenges that can be called a disaster.
Pharmacists lamented seeing patients who have been placed on drugs due to the nature of their illness being forced to use less quality drugs. A pharmacist at Kubwa General Hospital, who pleaded anonymity, said these days, asthma patients using Ventolin inhalers have had to switch to Aetolin inhalers, due to the former’s scarcity. And sometimes, patients delay their treatment or even forgo it when they hear the prices of the drugs prescribed for them.
“There was a time when a patient who was prescribed Augmentin was forced to switch to Fleming due to the non-availability of Augmentin,” he said.
Kashim Baba, a pharmacist at Kubwa General Hospital, emphasized the need for the government to act swiftly. Patients who once had access to vital medications are now left with little or no alternatives.
“For example, hypertensive diabetic patients that used to get these drugs can no longer get them completely,” he said. “I have seen a patient for whom the doctor originally prescribed Tab levofloxacin, but due to its unavailability, the doctor needed to change it to Tap Ciprofloxacin.”
When a government implements policies that not only discourage importation, but frustrate local investment, you know such a government is anti-people, noted Dr James Oyeniyi, a pharmacy professional and lecturer at Usmanu Danfodiyo University, Sokoto.
“The government knows the pharmaceutical industry relies on importation. We import most of our drugs, and for those that are locally produced, we source most of the materials outside the country. So if the government intends to improve local production by frustrating foreign exchange, then it needs to look at the effects on the pharmaceutical industry.”
Dr. Oyeniyi joined many Nigerians who are convinced the foreign exchange scarcity was an artificial crisis purposely caused by the government. He believes the current dilemma is a result of the previous administration’s campaign to boost local production. One of the first things the former president Muhammad Buhari did was restrict the purchase of dollar with a naira debit card. Then it placed a ban on 43 items, restricting their accessibility to foreign currencies.
Though pharmaceutical items were not restricted, noted Dr. James, such a policy made the foreign currency so scarce that the importers of pharmaceutical goods find it difficult to access.
“When it became really tough, our people (importers) deduced the strategy of using naira to buy CFA Franc [francophone currency] or the Ghana Cedi, then using them to buy the dollar,” explained Dr. James. “And as you may guess, it made things tough and expensive, soaring up the production cost.
“Urgent attention is needed to ensure that the lives of those suffering from chronic diseases are not rendered more miserable. The people of Nigeria deserve access to affordable healthcare, and the government must ensure the pharmaceutical industry can access foreign exchange currencies for the production and importation of medicine and medical items.”