Food and transportation inflation may dominate the headlines, because they affect the majority. However, a crucial issue, often overlooked, is the staggering surge in the cost of essential medicine in Nigeria.
A World Bank report, "Healthcare Costs in Nigeria: Trends and Impact", reveals a startling fact-the cost of essential drugs in Nigeria has skyrocketed by nearly 50% from 2020 to 2023. The pandemic worsened this situation, with some medicines witnessing price hikes of over 100% during its peak due to supply chain disruptions and increased demand. This price increase seem to be getting worse post Covid 19. Common antibiotics like Amoxicillin have experienced price increases of up to 60% over the past three years. Medications for chronic conditions, such as antihypertensive drugs, have surged by an average of 70% between 2020 and 2023. Insulin and other diabetes medications have seen price hikes ranging from 30% to 80% since 2020. Antimalarial drugs, crucial in Nigeria, have had 50% or more price increases over the past few years.
Findings by Punch Newspaper last May showed that the prices of some antimalarial drugs had increased from 11 per cent to around 23 per cent between November 2023 and April 2024. In November, an Artesunate injection of 120mg was sold for N2,500, while the 60mg injection was sold for N1,800. However, in April, market surveys showed that Artesunate 120mg now sells for N2,800 (12 per cent increase), while 60mg of the injection now sells for N2,000 (11 per cent increase). The cost of Coartem 80/480mg was around N3,300, while Amatem Soft Gel was sold for N2,500 and Lonart 80/480mg for N2,850. In April, Coartem 80/480mg is now sold for N4,000 (a 20 per cent increase). Amatem soft gel increased by over 20 per cent, selling for around N3,000. Lonart 80/480mg sells for N3,500, a 22 per cent increase.
These circumstances are, however, forcing many patients to skip their lifesaving medications and instead turn to unapproved alternatives and counterfeit drugs. Reports suggest that due to high costs, the availability of essential medicines in public health facilities has decreased, with up to 40% of commonly used drugs often being out of stock. The prices of branded medicines have risen sharply, but even generic drugs have not been spared, with average increases of 30-40% across various drug categories. Analysts have attributed the surge in drug prices to factors such as the devaluation of the national currency, unstable foreign exchange rates, reliance on imported active pharmaceutical ingredients, and heavy dependence on drug imports, among many other micro and macroeconomic factors.
The impact of this rise in price is significant and affects the Nigerian consumers, the pharmaceutical companies, and the healthcare ecosystem. The consumers have affordability issues, accessibility issues and health impact crises. According to a report by BMC Health Services Research titled "affordability of essential medicines in Nigeria", over 60% of Nigerians now struggle to afford essential medicines, with many having to forgo treatment or seek alternative therapies due to high costs. The rising costs have led to a 20-30% reduction in medication adherence rates, particularly among patients with chronic diseases who require ongoing treatment. Nigerians' out-of-pocket expenditure on healthcare, including medicines, has increased significantly, with the average family spending 35-40% of their income on healthcare expenses. Even when medicines are available, high transportation costs and limited distribution in rural areas exacerbate the issue of accessibility.
This price increase anomaly not only affects individuals but also has a profound impact on the healthcare system. The inability to afford medicines often leads to delayed or skipped treatment, worsening health outcomes and increasing the risk of complications. High costs hinder the effective management and prevention of diseases, contributing to higher rates of morbidity and mortality from conditions that are otherwise preventable or manageable. These avoidable conditions put a strain on the healthcare system by increasing hospitalisation, and even the health budget is adversely affected because of the high cost of drugs. Moreover, the fact that the high cost of medicines disproportionately affects the poor and rural populations exacerbates inequalities in health outcomes and undermines patients' trust in the healthcare system.
The impact on the pharmaceutical industry is enormous. The rising cost of drugs has affected demand for their products. The fluctuating exchange rate regime that has forced a great decline in the value of the Naira has increased the cost of production because of the high cost of imported pharmaceutical raw materials and drugs. Even the forex transfer system that makes it difficult for multinational pharmaceutical companies to repatriate their profits to their parent companies abroad due to the lack of USD has led some to pack up and leave Nigeria, like GlaxoSmith Plc.
The statistics and medical imperatives presented here underscore the urgent need for interventions to control medicine prices and ensure that essential drugs remain accessible to all Nigerians. Addressing the high cost of essential medicines in Nigeria is a complex issue that requires a multi-faceted approach. It involves not only government intervention but also supply chain improvements, local production incentives, and international cooperation. By implementing these solutions, Nigeria can make significant strides towards ensuring that all citizens have access to the medicines they need for a healthy life. I would propose a few solutions for a more sustainable drug price regime in Nigeria.
First, Government and policy interventions may be needed. Implementing strict price controls and caps on essential medicines can help make them more affordable. This can include regulating the mark-up from manufacturing, importing, wholesaling, and retail. The government can also provide subsidies or free distribution of essential medicines to vulnerable populations to improve access. They can expand programmes like the National Health Insurance Scheme (NHIS) to cover more medications. Besides, the government can encourage using cost-effective generic medicines by ensuring their quality and efficacy to lower costs. Regulatory frameworks should support the fast-track approval of generics. They must strengthen regulation and oversight to reduce the prevalence of counterfeit drugs, which not only pose health risks but can also distort the market and drive-up costs for genuine products.
Second, the core stakeholders must improve supply chain efficiency by strengthening supply chain infrastructure to minimise distribution costs and avoid stockouts to ensure more consistent availability and affordability of medicines. For local distribution, it is unfortunate that indigent consumers living in the rural areas or difficult areas to access in cities bear the brunt of higher drug prices. This makes medications slightly more expensive in poor areas than in rich and more accessible areas. This is the paradox of drug pricing in Nigeria. There is a need for prompt intervention beyond market forces.
Third, encouraging local production of essential medicines can reduce reliance on imports, lower costs, and improve supply reliability. Government incentives and partnerships with private sector players are critical in this regard. Investing in research and development for local drug production helps in creating affordable, home-grown solutions for common health issues. For the big, expensive imported brands for life-threatening sickness, Nigeria can behave like India and invest in mass production of generic drugs to reduce the cost of lifesaving essential medicines without inhibitions from patents or Intellectual Property Rights (IPR).
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Fourth, educating the public on the importance of adhering to prescribed treatments and the availability of affordable medication options can improve health outcomes. Partnering with community leaders to disseminate information and facilitate access to medicines in remote areas can enhance outreach and effectiveness.
Lastly, healthcare administrators should engage with international organisations and donor agencies to secure funding and technical assistance for purchasing and distributing essential medicines at lower costs. Also, joining international drug purchasing pools helps negotiate better prices through bulk buying and collective bargaining power.
We have identified that the depreciation of the Naira has significantly impacted the cost of imported medicines, leading to price increases of 20-50% annually for imported drugs due to fluctuating exchange rates. Nigeria's high inflation rates, averaging 25 - 33% annually in recent years, have compounded the problem, driving up the costs of locally produced and imported medicines. Global supply chain issues, especially during the global crisis post- COVID-19 - the Russian-Ukraine war, and the Middle East crisis, have led to increased shipping and production costs, contributing to price hikes. Changes in government policies, including tariffs and taxes on pharmaceutical products, have added an estimated 5-10% to the cost of medicines.
Therefore, all stakeholders must understand the existential threat the lack of access to essential drugs poses to many Nigerians and must do whatever it takes to solve this problem. Drug inflation is an ill wind that blows us no good. Bringing down the prices of essential drugs is a task that all must join hands to accomplish. At least for the sake of many lives that are at stake!
