NAFDAC: Naira depreciation, forex scarcity causing hike in drug prices

Mojisola Adeyeye, director-general, National Agency for Food and Drug Administration and Control (NAFDAC), says the increase in drug prices is not linked to the pull-out of GlaxoSmithKline (GSK) from Nigeria.

In August 2023, GSK Nigeria informed shareholders that it was shutting down operations because its largest shareholder and parent company, GSK UK, plans to discontinue its production licence and partner with another local entity.

There have been fears that the development may lead to an increase in the prices of drugs.

However, according to Adeyeye, GSK Nigeria’s shutdown is not responsible for the recent surge in drug prices, rather, the naira devaluation is driving the hike. 

“The first reason for the increment in the prices of drug is that the value of naira has depreciated,” NAN quoted Adeyeye as saying. 

“Before the planned exit of GSK from the country, prices of commodities general had gone up and some of the products GSK produced have decreased 

“From the regulatory perspective, we encourage local manufacturing and GSK have collaborated with local manufacturers. So it is not like they import everything.”

Adeyeye said foreign exchange scarcity has also had significant impact on international pharmaceutical companies.

“The issue of foreign exchange is huge for some of the multinational companies,” she said.

“They generate funds and it becomes difficult to repatriate the money back to their parent company where other developments will take place.”

GSK UK is planning to transition to a third-party direct distribution model for its pharmaceutical products in Nigeria, ending its direct production and commercialisation of its prescription medicines and vaccines.