Naira depreciation and forex scarcity drive drug price hike – NAFDAC

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Naira depreciation and forex scarcity drive drug price hike - NAFDAC
Naira depreciation and forex scarcity drive drug price hike - NAFDAC

The Director-General of the National Agency for Food and Drug Administration and Control (NAFDAC), Mojisola Adeyeye, has clarified that the recent increase in drug prices in Nigeria is not directly linked to GlaxoSmithKline’s (GSK) withdrawal from the country.

In August 2023, GSK Nigeria announced its decision to cease operations as its parent company, GSK UK, intended to discontinue its production license and collaborate with another local entity.

Concerns had arisen that GSK’s exit might result in higher drug prices. However, Adeyeye stated that the depreciation of the Nigerian currency, the naira, is the primary factor behind the price hikes.

Rising drug prices

She explained that even before GSK’s planned departure, general commodity prices had risen, and some of the products produced by GSK had decreased in cost.

Adeyeye emphasized NAFDAC’s support for local drug manufacturing and noted that GSK had collaborated with local manufacturers rather than solely relying on imports.

She further highlighted that foreign exchange scarcity had significantly affected multinational pharmaceutical companies operating in Nigeria, making it challenging for them to repatriate funds to their parent companies.

GSK UK’s strategy involves transitioning to a third-party direct distribution model for its pharmaceutical products in Nigeria, ending its direct production and commercialization of prescription medicines and vaccines.