Abstract
For BMI’s Q409 Nigeria Pharmaceutical and Healthcare report, we expect
total drug market spending in
the country to rise from US$633mn in 2008 to
US$695mn by 2013, representing a compound annual
growth rate (CAGR) of
1.59% in US dollar terms and 3.24% in local currency. Per capita spending
on
medicines will reach US$4.3 by 2013, while the proportion of GDP
dedicated to legal drug spending will
reach only 0.2% – a decrease
from 0.28% in 2008. While concerning, multinational drugmakers should
consider differential pricing when allocating products to Nigeria. Likewise,
the government should
reassess its import tariffs on drugs that can be
locally produced if imported medicines are indeed cheaper.
Moreover, it
should invest and support local manufacturers in upgrading facilities so that
economies of
scale are viable in the pharmaceutical segment.
The
country has great export potential – however the lack of domestic
investment in local manufacturing
coupled with unreliable energy supplies
(causing frequent outages that disrupt production and ruin
unfinished
medicines) makes an increase in the export sector highly unlikely.
According to our Business Environment Rankings, Nigeria scores a meagre two
out of 10 for its
approvals process, with an even poorer score of less
than one for corruption. BMI notes that the Nigerian
government must
urgently resolve its problematic internal affairs before embarking on drastic
law
enforcement. The ongoing bureaucracy and deliberation in policy
management is itself a massive
weakness that is exploited by
counterfeiters.
The Health Reform Foundation of Nigeria (HERFON), the
National Assembly and the Ministry of Health
have united in their stance
to harmonise contributions to the healthcare system in the country in June
2009
BMI believes that the financing of the primary healthcare sector is
in dire need of re-organisation.
The Nigerian government is still pushing
through the National Health Insurance bill, which has
experienced low
uptake due to weak strategic planning. In addition, the country has been set
Millennium
Development Goals (MDGs) for improving its provision of
healthcare. The National Health Insurance
Scheme (NHIS) was designed to
provide equitable access to medical services, but it has been indentified
that aside from low uptake, the fragmented contributions through various
government bodies is a severe
hindrance to progress.
A conference held
in June 2009 resulted in the joint agreement that the financing and
co-ordination of the
primary care system was to be prioritised. We note
that African health systems are often characterised by
a lack of
unification between various financing authorities. The latest development
highlights a
progressive stance by the Nigerian government in recognising
this issue. Without greater government
involvement over time, the system
will be more severely underfunded. One rationale behind our outlook
is
that many people that still resort to out-of-pocket payments for primary care
will have little incentive to
join the NHIS without a reduction in
premiums to make it more affordable.
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