Hoarding and Gouging Amplify Drug Price Crisis Post-GSK Exit
The departure of GlaxoSmithKline (GSK) from Nigeria has triggered a perfect storm of hoarding and price gouging, propelling drug prices to unprecedented levels. Compounded by a devalued currency and high tariffs on pharmaceutical imports, middlemen are exploiting the scarcity of GSK products, leading to exorbitant prices and substantial profits.
Middlemen’s Profit Surge: Seretide Price Skyrockets Over 900%
BusinessDay’s investigation reveals that certain middlemen are capitalizing on the shortage of GSK products, making over 100% profit on drugs like Seretide. The price of Seretide, a vital medication for asthmatic patients, surged from N7,000 in Q1 2023 to a staggering N70,000 in November.
Parallel Imports on the Rise as GSK Vacuum Persists
With the scarcity of GSK products, individuals are resorting to parallel imports, bringing legally manufactured GSK products from other countries into Nigeria. Samuel Okwuada, CEO of Remedial Health, explains that those who stocked up on these products or acquired them just before GSK’s exit can now command high prices due to the scarcity.
Forecast: Relief in the First Quarter of 2024
While acknowledging the current exploitation, a source from a leading retail pharmaceutical store anticipates that the situation will ease by the first quarter of 2024 when the availability of GSK products is expected to improve.
Foreign Exchange Crisis and GSK’s Silence Intensify Challenges
Despite GSK’s 51 years of operation in Nigeria, the pharmaceutical giant is yet to announce a third-party distributor for its consumer healthcare products, exacerbating the scarcity. The termination of the distribution agreement by the Haelon Group further restricts access to essential medicines, turning them into luxury items for many Nigerians.
Impact on Patients: Rising Costs and Limited Access
The surge in drug prices, especially for essential medications like Ampiclox, Ventolin inhaler, and Augmentin, is imposing significant financial constraints on patients. Many are struggling to afford medicine amid widespread poverty and soaring food inflation.
Healthcare Providers’ Concerns: Patients Micro-Managing Medicines Due to Cost
Healthcare providers are witnessing an alarming trend of patients micro-managing medicines due to financial constraints. The escalating costs of essential medicines and treatments are forcing patients to decline hospital visits, particularly affecting those with conditions like diabetes.
Root Causes: Unresolved FX Crisis, High Importation Costs, and Energy Expenses
Analysts attribute the crisis to the unresolved foreign exchange crisis, exorbitant drug importation costs, and the high cost of doing business fueled by energy expenses. The pharmaceutical sector’s heavy reliance on imported active pharmaceutical ingredients (APIs) makes it vulnerable to currency devaluation shocks.
Call for Government Action: Dismantling Obstacles to Local Business
Stakeholders emphasize the need for proactive government measures to dismantle obstacles hindering local business. The pharmaceutical sector’s reliance on imported APIs underscores the urgency of creating an enabling environment for local manufacturing.
In conclusion, the departure of GSK has unleashed a complex web of challenges, from soaring drug prices to the struggle for access to essential medications. As Nigeria navigates these turbulent waters, proactive government interventions are crucial to safeguarding the health and well-being of its citizens.
