Abstract
In BMI' s Q309 update of the Pharmaceutical Business Environment Rankings for
the Middle East and
Africa (MEA) region, Nigeria is once again ranked
second-last out of the 17 key regional markets, above
only Zimbabwe.
Globally, Nigeria is also ranked second-last of the 71 pharmaceutical markets
surveyed
by BMI, due to low levels of per capita spending on drugs, a
moderate compound annual growth rate
(CAGR) of 1.89% in US dollar terms
through to 2013, and the rampant counterfeiting of medicines.
Nevertheless, by 2013, BMI forecasts that the total Nigerian pharmaceutical
market at consumer prices
will increase to US$695mn, from an estimated
US$633mn in 2008 illustrating the existence of
commercial opportunities
for those drugmakers willing to be exposed to higher levels of risk.
In
fact, the government has taken a decisive stance against counterfeiters in
recent years, increasing both
enforcement and prosecution activities
against those involved in illegal trade of medicines. In March
2009, the
recently-founded Ghanaian mobile technology firm mPedigree launched its
anti-counterfeit
medicine strategy across its home country, with plans to
target the Nigerian anti-malarial and antibiotic
drug market in a similar
way. Such a cross-border approach will have a positive effect on the
operating
environment for foreign drugmakers.
However, the
pharmaceutical and the wider healthcare landscape clearly have a long way to
go before
being considered fully fair and transparent. While Nigeria' s
reimbursement process has been improving
following the launch of the
national health insurance scheme (NHIS) in 2005, poor or inappropriate
allocation of funds is having a knock-on effect on the country' s healthcare
policy. Most recently, in
March 2009, a licence to operate in the country
held by the domestic subsidiary of US based drugmaker
Xechem International
was revoked by the authorities. The decision came as a result of a
misappropriation of funds that led to severe sickle cell anaemia drug
shortages, and further investigations
surrounding financial mismanagement
are underway.
In terms of the wider operating environment, Nigeria' s
government is facing substantially lower oil
revenues in 2009.
Consequently, the authorities will push through a large fiscal deficit, which
we believe
will be financed via the excess crude account. Meanwhile,
growth is forecast to fall below 4.0% for the
first time since 2000, with
risks to the downside, which will have further implications for the uptake
of
the NHIS as well as inflows of foreign direct investment (FDI).
Similarly, the sudden and sharp
devaluation of the naira will negatively
impact the country' s ability to source pharmaceutical imports,
especially
as we believe the exchange rate has further to fall in the medium term,
despite the efforts of the
central bank to control banks' ability to
access foreign currency.
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