Firm reports industry-wide efforts to reduce drug prices
According to May & Baker Nigeria Plc, pharmaceutical companies in Nigeria have been lowering their profit margins to help reduce the high cost of medications.Patrick Ajah, CEO of May & Baker, made the announcement on Monday, according to The Punch.
Ajah stated that the company has increased drug prices only three times in the last year to keep medicines affordable, particularly for its own products.
He noted that the departure of major pharmaceutical companies, including GlaxoSmithKline, resulted in significant increases in drug prices.
In response, Health Minister Muhammad Pate contacted local pharmaceutical manufacturers to work on solutions to the problem.
"The pharmaceutical industry has done a lot to reduce the cost of the drugs that we manufacture. "We are compromising our profits and margins," said May & Baker's CEO on Monday.
He stated that pharmaceutical manufacturers could only hold out for so long before they "cannot help it anymore," noting that while companies "need people to be able to afford our products, if we are unable to produce, it will be worse."
During May & Baker's recent 80th anniversary celebration, Ajah spoke about Active Pharmaceutical Ingredients and their impact on foreign exchange, research and development, and corporate social responsibility.
The CEO of May & Baker also stated that stability in local pharmaceutical manufacturing remains a challenge, as the majority of Active Pharmaceutical Ingredients (APIs) used by domestic drug producers continue to be imported.
He stated, "The majority, if not all, of the APIs are imported, as are packaging materials and many other components used in the production of these medicines.
"They're imported. The difference is that if that product can be manufactured by a company like us, it will be less expensive than importing the finished product."
Ajah stated that the Federal Government's policy of floating 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 acquiring dollars.
"The least we can get is N1,509," he said. "Multiply that increase by how much we buy active ingredients, like paracetamol, you find out that most companies are not making a profit."
Ajah stated that unless the federal government addressed the high exchange rate, pharmaceutical companies would continue to collapse and drug prices would not fall.
According to the CEO of May & Baker, the Federal Government's recent announcement of an import duty waiver has yet to be implemented.
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