The Evolution of Drug Production in Nigeria
The pharmaceutical industry is very important to the economy of every country. Pharmaceuticals, especially drugs, are so priceless that no nation can survive without them and every serious-minded government pays great attention to drugs. Drugs are so important that the World Health Organization (WHO) recommends a National Drug Policy for every country. Most progressive countries have formulated and implemented their national drug policies, thereby ensuring good health for their citizens and great wealth for their nation.The development of pharmaceuticals in Nigeria has undergone significant evolution from the concoctions infused from a cocktail of leaves, fruits, barks and roots to small tablets made through chemical synthesis. Modern science and technology has turned drugs into extremely valuable products and continues to aim at delivering them in forms with enhanced efficacy, precision in action, safety and appearance. This poses a great challenge to the pharmaceutical industry as there is always a need to improve on previous inventions and develop even better drugs. As a result of this evolution, many new entrants into the pharmaceutical industry have emerged globally since the mid-1930s.
 This has led to intense competition with its attendant problem—products of suspect quality infiltrating the markets as players in the industry struggle to get more of the market shares. The problem is exacerbated by the double regulatory standards adopted by exporting countries, as well as the lack of inbuilt security measures that should be included during product development by drug manufacturers to forestall counterfeiting.
The pharmaceutical industry in Nigeria has passed through a tortuous path, from the rudimentary era of pre-957 to the foundation-laying era of the 1960s, through the oil boom era of the 1970s, to the harrowing experience of the 80’s and 90’s and into the potentially bright era of the 2000s. This path traversed by the industry is not peculiar to Nigeria but is the same as in other developing countries. The development of the Nigerian pharmaceutical industry has evolved over time in five phases. Each phase depicts the stages of growth that took place in the industry.
Phase I (Pre 1957 Era)
The first phase started with the establishment of the first pharmacy in Nigeria by Dr. Zacheus Bailey in Lagos.1 During this time, the pharmaceutical business involved distribution of imported drugs by representatives of different multinationals in the country. Some of the multinationals were Beecham, May and Baker, Pfizer, Glaxo and J. L. Morrison. This meant that there was no local manufacturing of modern pharmaceutical products in Nigeria before 1957.
Phase II (1957-1980)
This phase covered the era when the multinational companies started establishing production plants in Nigeria. These include Glaxo (1958), Pfizer (1962), Sterling (1963), Wellcome (1967), PZ (1968), and Pharchem (1968), SmithKline Beecham (1973), May & Baker (1977), and Hoechst (1982). This phase was seen as the golden era as many companies expanded and some of them built modern factories. With the end of the Nigeria-Biafra Civil War in 1970 and the emergence of the oil boom, this era could not have been better for the companies and the economy as profits, employment and foreign exchange swelled. However, these companies were solely owned and operated by foreigners with no Nigerian indigenous participation.
Phase III (1980-1982)
The enactment of the Indigenization Policy in 1978 brought about the third phase in the evolution of drug production in Nigeria. The policy forced most of the multinational companies to sell 60% of their shares to Nigerian investors. The period also saw the emergence of indigenous companies such as Biode, Rajrab and Leady Pharma (1980), Biomedical Services (1981) and many others. The Federal and the then Bendel State Governments also set up manufacturing facilities in the country. Indigenous companies began to combine the formulation of simple dosage forms with the manufacture of more sophisticated dosage forms. By 1980, the local production of drugs had increased from less than 5% to 20%.3 This stage of the evolution was a very positive stage for the country’s pharmaceutical industry. It engendered prospects for many Nigerian investors and improved the chances of expansion with consequent positive growth impact on the Nigerian economy.
Phase IV (1983-1986)
Excessive unmanaged dependence on imported finished products resulting from the oil boom era had a severely damaging effect on the economy. With the dwindling economy and severe shortages of foreign exchange, goods became scarce and the scarcity of pharmaceutical products became a new phenomenon. The government introduced the infamous import license for all imported goods, including drugs, and with it, the course of the history and development of the Pharmaceutical Industry was altered. The introduction of the structural adjustment programme as recommended by the International Monetary Fund (IMF) further exacerbated the fragile economy.
The Nigerian government’s implementation of the import license regime was done mainly on the basis of political patronage. Many people who had no business with drugs and pharmaceuticals got the licenses and became importers, while pharmacists, genuine manufacturers and importers were denied access to foreign exchange or forced to repurchase the import licenses from those whose plants and offices were located in their briefcases. With the introduction of this regime, the drug importation and distribution system in Nigeria became chaotic. The country’s markets were flooded with all sorts of fake/counterfeit and substandard products.
However, two positive results happened during this period. More indigenous pharmaceutical manufacturers, such as Emzor, Mopson, Barewa, Geonnasons, Continental, Ashmina, and Afrik came into the scene. In addition, the proportion of local manufacture grew to 40 percent.
Phase V (1987- present)
This is the era with six main ownership structures.5 Indigenous manufacturers control 58 percent of manufacturing, Asianowned companies control 18 percent; Anglo American owned companies has 14 percent, the government companies’ control 5 percent and others control 5 percent. From the above structure, it is clear that indigenous ownership in the industry is on the increase. This is a welcome development for the industry and indeed the nation because the presence of indigenous companies in the industry creates jobs and encourages the development of products that are relevant to the healthcare needs of the nation. It also encourages and supports full implementation of the Essential Drug List as it ensures availability, accessibility, affordability, and rational use of drugs that are very crucial to the success of the health policy of the nation.
Despite the apparent growth in the number of indigenous players in the industry, there still remains the fact that no company has set up a basic active raw material manufacturing plant in Nigeria, not even for Paracetamol or Aspirin. The pharmaceutical industry is greatly challenged in this regard.
The amendment of the Essential Drug List (EDL) decree restricting the application only to public health institutions was the first tonic to the industry. With the amendment to this decree, companies were able to expand their product base, resuscitate abandoned product lines, and increase their volume, turnover and profit margins.
Furthermore, the abolition of the import license system also brought succour to the industry. Foreign exchange, which hitherto was an object of political patronage, became available to the real industrial sector. Industries were able to source their raw materials and equipment, free from encumbrances. This was of great benefit.
The abolition of Value Added Tax (VAT) on pharmaceutical raw materials, coupled with the reduction of tariff on raw materials and equipment by the Nigerian government have greatly encouraged the pharmaceutical industry.
NAFDAC’s differential tariff and its war against fake drugs are now creating a boom for the pharmaceutical industry. Presently, there are eighty-six local pharmaceutical manufacturing companies producing less about 30% of Nigeria’s drug need.
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