Drug sales slump 50% as Nige­ri­ans cut spend­ing, seek cheap sub­sti­tutes

Phar­ma­cies clos­ing op­er­a­tions

Business Day (Nigeria) - - FRONT PAGE - ODINAKA ANUDU, ANTHONIA OBOKOH & MICHAEL ANI

The eco­nomic slow­down is hit­ting Nige­ri­ans so hard that they now can­not af­ford to buy the right drugs that will cure their ail­ments. This has led to many peo­ple re­sort­ing to cheaper and some­times very dan­ger­ous sub­sti- tutes, caus­ing many phar­ma­ceu­ti­cal com­pa­nies who have seen up to a 50-per­cent fall in sales to close shop or sell their op­er­a­tions.

“The drop in sales is about 30 to 50 per­cent in the last two years. Many phar­ma­ceu­ti­cal stores are do­ing 50 per­cent to 70 per­cent of what they were do­ing be­fore now,” said Chidi Okoro, founder, Drugs and Medica­ments Nige­ria Lim­ited, with about 14 re­tail out­lets across Nige­ria.

Okoro ex­plained that the phar­ma­ceu­ti­cal in­dus­try re­sponds fast to eco­nomic head- winds, as pa­tients and fam­i­lies tend to spend less dur­ing times of eco­nomic stress.

“Peo­ple are buy­ing cheap brands be­cause they do not have money. Rather than buy malar­ial drug for N1,200, they pre­fer to buy that of N600, which

in turn af­fects sales. We have a prod­uct called Wiper, which is an an­ti­malar­ial drug. Peo­ple were not buy­ing it be­fore, but it now sells like hot cake in Onit­sha for about N500,” Okoro said.

“Again, peo­ple also now go to al­ter­na­tive medicines – herbal and to pas­tors,” he said.

He pointed out that im­porters bring in 7C drugs from, say, Czech Repub­lic, to beat the stronger 3Cs from the UK in terms of price, ad­ding that the in­dus­try is also try­ing to con­trol its credit.

“Be­cause re­tail­ers are not pay­ing up, whole­salers are also sti­fling sup­ply. This is one of the rea­sons why there are empty shelves in phar­ma­ceu­ti­cal stores,” he added.

A ma­jor­ity of Nige­ri­ans now have lit­tle or no dis­pos­able in­come, with the Brook­ings In­sti­tute es­ti­mat­ing that the coun­try is now the poverty cap­i­tal of the world, with a record 87 mil­lion peo­ple liv­ing in ex­treme poverty and 8,000 peo­ple slid­ing into ex­treme poverty on a daily ba­sis.

But the cheap sub­sti­tutes also come at a cost, to life and health, ex­perts say.

The pa­tron­age of cheap al­ter­na­tives has neg­a­tive im­pli­ca­tions on the health of Nige­ri­ans, Okoro said, with the Na­tional Agency for Food and Drug Ad­min­is­tra­tion and Con­trol (NAFDAC) be­com­ing more of a rev­enue-gen­er­at­ing agency than a reg­u­la­tor.

Ifeh Azih, a bio­chemist and man­ag­ing di­rec­tor, Des­tiny Lab­o­ra­to­ries, said even though cheap medicines pro­vide short-term re­lief and par­tial rem­edy for pa­tients, they pro­long cures of ail­ments, lead­ing to ul­ti­mately death.

“Herbal medicines par­tic­u­larly have se­ri­ous im­pact on the kid­ney, liver and pan­creas. In fact, some of them re­duce the level of sugar in the blood. I know three peo­ple who re­cently died of this sit­u­a­tion. They didn’t know that the medicine was re­duc­ing their blood sugar un­til death,” he said.

Azih added that the eco­nomic crunch is forc­ing Nige­ri­ans to change doc­tors’ pre­scrip­tions, dis­clos­ing that many cit­i­zens are now priced out of es­sen­tial drugs, which has se­ri­ous im­pact on health.

The un­em­ploy­ment rate in Nige­ria in­creased to 23.10 per­cent in the third quar­ter of 2018, from 18.8 per­cent in the sec­ond quar­ter, ac­cord­ing to the lat­est fig­ure from the Na­tional Bureau of Sta­tis­tics (NBS). Min­i­mum wage is N18,000 ($50) and has re­mained so since 2011. In­fla­tion rate at 11.28 per­cent erodes in­come, just as mis­ery in­dex, a met­rics used in as­cer­tain­ing how well an av­er­age cit­i­zen lives, is 34.4 per­cent.

“Peo­ple no longer de­mand for drugs like they used to,” said Onocha Emeka, a phar­ma­cist at Novelette Phar­macy. “Even those that pur­chase medicines pre­fer to go for cheaper brands.”

Phar­ma­ceu­ti­cal com­pa­nies listed on the Nige­rian Stock Ex­change (NSE) are also be­ing im­pacted as some saw a de­cline in rev­enues in their most re­cent third quar­ter (Q3) re­sults.

May & Baker rev­enues fell 5.4 per­cent to N6.54 bil­lion in Septem­ber 2018, from N6.92 bil­lion a year ear­lier.

Mori­son In­dus­tries Plc, an­other drug maker, saw a 31-per­cent slump in rev­enues to N90.96 mil­lion in Septem­ber 2018, from N131.2 mil­lion a year ear­lier, while Pharma-deko rev­enues fell to N811 mil­lion in the same pe­riod from N1.1 bil­lion in 2017, a 27-per­cent drop.

“The chal­lenges of phar­ma­ceu­ti­cal com­pa­nies re­flect the prob­lems fac­ing the in­dus­try. Pa­tron­age is key and re­mains a chal­lenge,” Okey Akpa, chair­man, Phar­ma­ceu­ti­cal Man­u­fac­tur­ers Group of the Man­u­fac­tur­ers As­so­ci­a­tion of Nige­ria (MAN), told Businessday.

Ma­jor play­ers in the phar­ma­ceu­ti­cal sec­tor are strug­gling to sus­tain pro­duc­tion to pre-2015 lev­els.

Al­ready, Swiss Pharma has been bought by an in­vestor af­ter ex­peri- enc­ing early strug­gles, while Evans Med­i­cals has gone un­der. In­ci­den­tally, these two drug mak­ers got the World Health Or­gan­i­sa­tion (WHO) pre­qual­i­fi­ca­tion, which or­di­nar­ily should raise the level of their com­pet­i­tive­ness. The phar­ma­ceu­ti­cal in­dus­try de­pends on im­ports for over 50 per­cent of its raw ma­te­ri­als even as pa­tron­age re­mains a ma­jor hur­dle.

A phar­ma­cist who spoke on con­di­tion of anonymity said the de­mand for drugs last year was low. Ac­cord­ing to him, some of the drugs pa­tients bought were from doc­tors’ pre­scrip­tion while oth­ers were self­med­i­ca­tion.

“There has been a de­crease in the sales of drugs. The de­gree of drop is sig­nif­i­cant. I make av­er­age sales of N70,000 daily, but it was far more than this be­fore now,” the phar­ma­cist said.

He said the low pa­tron­age wit­nessed is not be­cause of ris­ing drug prices as prices have re­mained sta­ble; rather, it is a re­sult of the gen­eral eco­nomic chal­lenge in the coun­try.

Real house­hold con­sump­tion and govern­ment con­sump­tion ex­pen­di­tures de­clined in 2017 (at -0.99 per­cent) while na­tional dis­pos­able in­come fell by 1.52 per­cent, ac­cord­ing to NBS data.

Ab­dul Sa­mad Rabiu (3rd r), chair­man, Ce­ment Com­pany of North­ern Nige­ria (CCNN); Os­car Onyema (3rd l), CEO, Nige­ria Stock Ex­change (NSE), and other direc­tors of the CCNN, Finn Arnold­sen (l); Chi­maobi Madukwe (2nd l); Kabiru Rabiu (2nd r), and Ahmed Aliyu, com­pany sec­re­tary, CCNN, dur­ing the ring­ing of the clos­ing gong on the floor of the NSE to mark the end of trad­ing and com­mem­o­rate the suc­cess­ful com­ple­tion of the Ccnn/kalam­baina Ce­ment Merger in La­gos. Pic by Olawale Amoo

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