Surging Production Costs Put Pressure On Businesses – Neimeth Boss

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Nigerian pharmacist and industrialist, Pharm. Matthew Azoji, has stated that this is a distressing time for business owners in Nigeria, as many businesses are barely surviving while some have suspended operations due to soaring costs of production.

Azoji, a Fellow of the Pharmaceutical Society of Nigeria (PSN), and managing director of Neimeth International Pharmaceuticals Plc, made the remarks in a recent interview with Pharmanews in his office.

He also emphasised that adequate investment of resources in innovation would enhance access to medicines and thereby improve patient outcomes.

Concerning what many have described as unfriendly policies of the government towards the pharmaceutical manufacturing sector, Azoji opined that the government does not deliberately target the pharma industry with harsh policies. Rather, he said, some policies intended for other purposes may adversely affect pharmaceutical companies.

He said “For instance, the decision of the government to provide subsidies only for Premium Motor Spirit (PMS) or petrol and not for diesel and aviation fuel has left the price of diesel, which pharmaceutical manufacturers, use to power their factories at the mercy of the forces of demand and supply.

“As a result, the current disruption in the supply of petroleum products, due to the Russia-Ukraine war, has led to over 135 per cent increase in the price of diesel; but the price of PMS has remained largely stable, except for the time the bad petrol supplied to the market caused scarcity and proliferation of black markets for the product.

“The current very high price of diesel has therefore heavily affected the pharma manufacturing industry, significantly increasing the cost of production which cannot be passed 100 per cent to consumers because of the overall adverse economic situation in the country.”

Continuing, Azoji said: “The meaning is that profitability is significantly reduced for the average pharma manufacturer but that is not the intention of the government. Also, in ensuring a transparent procurement process, government often throws open the purchase of drugs for government facilities and programmes, to both local manufacturers and importers. And you know that some of the foreign manufacturers operate in environments which enjoy low cost of production. This makes products of local pharmaceutical companies uncompetitive.

“Regarding what the government is doing for the pharma industry, I can say that some things have been done right by the government and more needs to be done to promote the industry. The COVID-19 pandemic woke the government up to the cries of the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN) for funds to boost capacity in the sector. The government, through the Central Bank of Nigeria, gave out N100 billion capacity expansion low-cost loans from which many manufacturers benefited.

“Last year, the government launched the new National Drug Policy 2021. That policy seeks to promote the local pharmaceutical sector by encouraging local production. For instance, the policy seeks to ensure that by 2025 Nigeria will be able to achieve 75 per cent local manufacture of essential medicines needed in the country. The policy goes ahead to seek the use of fiscal and other measures to promote the local production of drugs in Nigeria.

“The pharma industry will need to rise to the occasion and work closely with Government to take advantage of this new policy. However, we request the government to do more to actively create a better enabling environment for the local pharma industry to thrive for the benefit of Nigerians in the areas of enhancing access to medicines, creating of jobs and generating foreign exchange through export to other African countries. 

“All the problems of the economy, namely infrastructure deficit, poor power supply, high interest and exchange rates, corruption and others that perennially plague the economy impact the sector negatively. Tackling those challenges will help tackle problems in the pharma sector.” 

The Neimeth boss further said that the new National Drug Policy will boost the pharma sector to perform optimally. He expressed hope that the document, the third of such policies, will achieve the targets and objectives that the previous NDPs could not fully achieve.

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In his words, “We hope the current NDP will be given teeth to attain its objectives. For instance, the target is to grow local pharmaceutical manufacturers to ensure that by 2025 Nigeria achieves 75 per cent of local drug production; that is, only 25 per cent of essential drug needs will have to be imported.

“This will definitely boost local drug production by making local manufacturers produce optimally. Currently, Nigerian pharmaceutical manufacturers are not using more than 60 per cent of their capacity. So, capacity utilisation will improve in the sector. But for this to be achieved, the implementation has to start without delay.”

Speaking on his National Productivity Order of Merit (NPOM) award by the Federal Government, Azoji said, “I was among 37 eminent Nigerian individuals and 11 organisations that were honoured by President Muhammad Buhari with the award, in Abuja.

“The award is given to recognise one’s high productivity, hard work and excellence. NPOM was instituted by the Federal Government through the Ministry of Labour and Employment to promote local excellence and hard work in industry and national life. For me, the award came as a recognition of my role in piloting the affairs of Neimeth International Pharmaceuticals Plc successfully in the last three years.

“I believe that whatever we have accomplished in the last three years is a result of the contribution of all of us. Secondly, the award is dedicated to my wife and children for their unflinching support of my work. Most importantly, the award is dedicated to Almighty God for His grace and power which made all we accomplished possible. May God take all the glory.” 

Highlighting his expectations from the leadership of the PSN, led by Prof. Cyril Usifoh, Azoji said, “I expect the leadership to continue to champion the cause of Pharmacy and pursue the interest of Nigerian pharmacists wherever they may be. I have confidence in the leadership. The president, Prof. Cyril Usifoh, being an erudite scholar and astute professional, I believe he will build on the foundation laid by his predecessors, as well as their laudable programmes, and also initiate new ones. I expect him to deepen the work of advocacy.”

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