May & Baker Nigeria Plc has revealed that pharmaceutical companies in Nigeria have been reducing their profit margins to help lower the high cost of medications.
This was disclosed by the CEO of May & Baker, Patrick Ajah on Monday, according to The Punch.
Ajah said the company has increased drug prices only about three times in the past year to keep medicines affordable, especially for its own products.
He noted that the departure of major pharmaceutical firms, including GlaxoSmithKline, led to a significant rise in drug prices.
In response, Health Minister Muhammad Pate had engaged local pharmaceutical manufacturers to collaborate on solutions to address the issue.
“The pharma industry has done a lot to reduce, at least, the cost of the ones (drugs) that we produce. We are compromising our profits, our margins,” the May & Baker CEO said on Monday.
He said pharmaceutical manufacturers could only hold out for so long until they “cannot help it anymore” as he noted that while companies “need people to be able to afford our products if we are not able to produce, it’s going to be worse.”
Ajah addressed challenges around Active Pharmaceutical Ingredients and foreign exchange impact, research and development, and corporate social responsibility during May & Baker’s recent 80th-anniversary celebration.
The May & Baker’s CEO also highlighted that stability in local pharmaceutical manufacturing remains a challenge, as most Active Pharmaceutical Ingredients (APIs) used by domestic drug producers are still imported.
He said, “Most of, in fact, if not all the APIs are imported, including packaging materials, and so many other things that we use to produce these medicines.
“They are imported. The difference you’re going to have is if that product can be made by a company like us, the cost will be less than if you were importing the finished product.”
Ajah noted that the Federal Government’s policy to float the currency, which caused the exchange rate to rise from N461/$1 to its current level of N1,600, has significantly increased the difficulty for pharmaceutical companies in purchasing dollars.
“The least we can get is N1,509,” he stated. “Multiply that increase by how much we buy active ingredients, like paracetamol, you find out that most companies are not making a profit.”
Ajah said that unless the Federal Government addressed the high exchange rate, pharmaceutical companies would keep collapsing and drug prices would not come down.
The May & Baker CEO said the import duties waiver recently announced by the Federal Government has remained non-implemented
