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Nigeria Faces Continued Surge in Drug Prices Due to Currency Depreciation

The escalating prices of pharmaceuticals in Nigeria are expected to persist into 2024, reaching over N900 billion due to the depreciation of the naira. This economic challenge is set to add more strain on Nigerians who grappled with high drug costs in 2023. Data from the International Trade Center reveals that Nigeria imported $1.05 billion worth of pharmaceutical products in 2022, costing N475.17 billion at the exchange rate of the time. With the current exchange rate (N902.45/$) in 2024, the import prices are projected to soar to N950.81 billion.

Major Importers and Industry Challenges

Nigeria primarily sources pharmaceutical products from countries like India, China, Malaysia, Netherlands, and Belgium. Since 2019, pharmaceutical imports have consistently exceeded the $1 billion mark, with a notable increase expected in 2024. The exit of foreign drug companies like GlaxoSmithKline Consumer Nigeria Plc and Sanofi, opting for a third-party distribution model, has contributed to the recent surge in drug prices, exceeding 100%.

Industry Experts and Inflation Impact

Pharmaceutical experts, including Professor Boladele Silva from the University of Lagos, highlight the vulnerability of Nigeria’s pharmaceutical industry to economic shocks, especially related to foreign exchange volatility. The recent surge in drug prices is attributed to the country’s reliance on imported active pharmaceutical ingredients. Year-on-year, the cost of medicines like Ampiclox and Amoxil has witnessed significant increases, with a 346% rise and over 400% rise, respectively, in the period between 2022 and 2023.

Government Intervention and Concerns

Stakeholders, including the Nigeria Medical Association and political figures like Olatunbosun Oyintiloye, have raised concerns over the soaring drug prices. President Bola Tinubu has endorsed three resolutions at a Federal Executive Council meeting to address the rising costs of pharmaceuticals, including regulatory measures to protect public health and tackling the human resources crisis in the health sector.

Conclusion

The continued surge in drug prices poses a significant challenge to healthcare affordability in Nigeria, prompting government intervention and industry stakeholders to explore sustainable models for ensuring financial stability in healthcare institutions and affordability of medical services for the public.

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