In August 2023, Nigeria's second-largest pharmaceutical company, GlaxoSmithKline (GSK), announced its exit from the country, ending its 51-year presence.
Three months later, Sanofi, another leading pharmaceutical company, also announced their exit from Nigeria. The recurrent instability in the foreign exchange market and high manufacturing costs made it difficult for multinational companies to sustain operations, as they rely heavily on imported raw materials.
The exit of these companies left a void in Nigeria's pharmaceutical supply chain]; however local pharmaceutical companies are progressively taking action to effectively fill the existing gap. The Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN) noted that it can only meet about 30% of consumers' demand.
These exits also impacted the prices of essential drugs, triggered job losses, with other public health consequences like increased counterfeit medicines in drug stores.
To address these gaps, in October 2023, through the Presidential Initiative for Unlocking the Healthcare Value Chain (PVAC), the Nigerian government committed to improving the healthcare value chain by enhancing domestic manufacturing capabilities. It also aimed to increase the country's local manufacturing to 70% by 2030.
Plugging gaps
Protex Healthcare is one of the companies leveraging the exit of multinational companies to position itself as a candidate to fill the void, fortifying its foothold in the Nigerian healthcare sector.
The organisation focuses on innovative, knowledge-driven solutions for diabetic foot ulcers, leg ulcers, tropical diseases, burns, and other complex wounds, aiming to improve patient outcomes and reduce treatment costs.
About 95% of burn-related fatalities are recorded in low and middle-income countries. Burn injuries account for at least 4.8% of trauma-related deaths and 6.7% of surgical-related deaths in Nigeria. The organisation's product range includes wound care solutions for wound cleaning and debridement and a camera system for advanced wound diagnostics.
Shortly after the PVAC was established, the company began full operations in Abuja, Nigeria's capital. Protex also emphasises training and knowledge transfers with other local manufacturers, aligning with one of the Ministry of Health's endeavour which seeks to unlock the value chain, particularly promoting clinical research and development, encourage local production of health products, shape markets to ensure sustainable local demands and strengthen supply chains.
Although Protex's products are yet to be distributed widely in the Nigerian market, the company plans to price them competitively, benchmarked against the European Union Good Manufacturing Practice (GMP), which is better than USA, China, and India. This will ensure affordability for many customers while maintaining high-quality standards, as seen in its wound dressing that costs only 15% of what is being charged in the EU countries.
Protex's outlook
While Protex's entry into Nigeria's healthcare market promises enhanced access to burn and wound care medications, its CEO, Dominiek Viaene identified certain hurdles to be overcome. Despite their alignment with the Federal Ministry of Health's efforts to unlock value chain, stablishing connections with key industry players remains a challenge for new entrants, Viaene said. He further noted that the company's operational goals mirror those outlined in PVAC, but practical hurdles persist due to communication disconnect between industry like theirs and the government. For instance, the lack of inclusion of some industry members in the government's decision-making process.
Despite that, he remains optimistic about Nigeria's market potential, given the increasing demand for high-quality healthcare products. According to him, the growing awareness among patients and healthcare professionals regarding the importance of product quality provides them with a unique advantage.
More space for others
To address the longstanding underinvestment in Nigeria's health sector and bolster domestic pharmaceutical production, the Federal Government issued an Executive Order in 2024 exempting 87 pharmaceutical companies from import taxes on critical raw materials and production inputs. The circular released by the Ministry of Finance and Coordinating Ministry of the Economy announced that this exemption, effective March 5, 2025, will last for two years and apply to all pharmaceutical companies with a Tax Identification Number (TIN) and recognition from the Ministry of Health and Social Welfare. This, if properly utilised and sustained in the next two years will not only improve the quality of the medical products, but will also make the business of medical consumables production more attractive to investors.
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Viaene's venture proves that challenges can be turned into opportunities with proper planning an exploring of opportunities. Local manufacturers are taking advantage of the gap left and seeking to increase their production capacity following the exit of GSK and Sanofi. However, registration bottlenecks still persist, which calls for organisations like the National Agency for Food and Drugs Administration and Control (NAFDAC) to streamline processes and facilitate smoother operations. Not only in Nigeria, but other African countries can also learn lessons from the exit of big pharmaceutical companies and encourage local industries to produce their drugs and other medical consumables. As this also aligns with Africa's plan for the production of 60% of vaccine and other health-related products in the continent by 2040.
