Analysis of the Oharmaceutical Industry in Nigeria

Topics: Pharmaceutical industry, Pharmacology, GlaxoSmithKline Pages: 15 (4179 words) Published: October 13, 2010





Pharmaceuticals companies are very vital to the health care delivery systems in every country of the world. These companies are licensed to market, develop, research and distribute drugs for the prevention, treatment and cur of diseases and other medical conditions. In doing this, they compliment other healthcare service providers to improve the general well being of members of the society. The pharmaceutical industry is one of the top 5 industries in the world providing employment to millions, providing healthcare services to a greater population and large contributions to worldwide GDP.

In the world over, the industry is generally regarded as a high risk/high return industry especially in the area of Research & Development of drugs, vaccines etc. There has been a lot of activities in this area in the last 5 years with over 100 drugs going on patent between 2001 and 2006. The industry has shown great potentials with an average sales growth of 9.5% annually.

The Nigerian Pharmaceutical industry is one of the largest in the continent, however, its size, relative to the size of the population and economy is remarkably small. The size of the Nigerian Pharmaceutical industry is estimated at N99billion which is only about 1% of the GDP. Average capacity utilisation is below 55% for most of the companies operating in the industry.

Production in Nigeria is mostly secondary with R & D virtually non-existent. The key substances for drug manufacturing are not manufactured in Nigeria. Players in the industry are thus divided between local manufacturers, who import the active ingredients and mix with other expedients to produce and the importers who engage in strict importation. Estimates of installed capacity showed capacity for 24billion tablets of common over-the-counter drugs and over 36 million litres of liquid preparations.

Though the industry is actually as old as 1927 when the Pharmaceutical Society of Nigeria (PSN) was formed, the industry in Nigeria only began gaining serious public attention in recent times. This had been largely due to the passionate effort of the erstwhile director-General of the Nigerian Agency for Food and Drug Administration and Control (NAFDAC) to rid the industry of the menace of fake, expired and adulterated drugs which was previously the order of the day. Due to the absence of strict regulatory framework, the distribution of drugs was done in open markets where expired drugs were sold and sharp practise resulted in the flooding of the market with fake drugs. One of the peculiar features of the pharmaceutical industry in Nigeria is that it is fragmented along product lines with over 250 companies offering about 10,195 different registered drugs and medications. A greater percentage of the sales of most companies come from proprietary drugs rather than ethical drugs. This is because proprietary drugs are cheaper to make and have a ready market amongst the populace who rely on little or no medical advice before purchasing medication.


The Nigerian pharmaceutical industry is one of the largest in African ranking behind only that of South Africa and Morocco. The industry represents over 70% of the installed capacity in West Africa and United Nations International Development Organization (UNIDO) estimates the industry to be as large as $700 million. With the projected growth rate this is expected to be well over $1.18billion by 2014.

With the average lifespan of the Nigerian dipping lower than 50 years coupled with the huge population, improving access to essential medicine is an imperative role for the industry. This is in two parts: improving access both in terms of reaching more people geographically with...
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