2013-02-28 12:23:59 - New Healthcare market report from Business Monitor International: "Nigeria Pharmaceuticals & Healthcare Report Q2 2013"
BMI View: Our bullish view on Nigeria's pharmaceutical market, estimating double-digit pharmaceutical growth over the 2013-2022 period, and high potential for return on investment, on the back of long-term demographic and epidemiological trends, has been reinforced this quarter with investment activities by Merck, Sharpe and Dohme (MSD) and GlaxoSmithKline (GSK). However, we highlight potential restrictions to revenue streams as the abundance of counterfeit drugs, reluctance by those in the private sector to enrol in the national health insurance scheme and Nigeria's differential pricing system.
Headline Expenditure Projections
Pharmaceuticals: NGN150.94bn (US$951mn) in 2012 to NGN177.44bn (US$1.13bn) in 2013; +17.6 % in local currency terms and +18.4% in US dollar terms. Forecasts are slightly lower than in Q113 due to revised historical figures.
Report Details at
- www.fastmr.com/prod/541245_nigeria_pharmaceuticals_healthcare_re ..
Healthcare: NGN1,927.05bn (US$12.15bn) in 2012 to NGN2198.18bn (US$13.96bn) in 2013; +14.1% in local currency terms and +14.9% in US dollar terms. Forecasts are slightly higher than in Q113due to revised historical figures.
Nigeria's Pharmaceutical Risk/Reward Rating (RRR) score for Q213 is unchanged from the previous quarter. This is also the case for all other countries in BMI's proprietary system that ranks pharmaceutical markets according to attractiveness to multinational drugmakers. A minor re-weighting of one of the RRR components is being implemented to improve the tool, and the adjusted scores for all markets will be published in the Q313 updates of the Pharmaceuticals & Healthcare reports. Nigeria has a RRR score of 38.1 out of 100, making it the 23rd most attractive pharmaceutical market in Middle East and Africa (MENA).
Key Trends And Developments:
In December 2012, Merck, Sharpe and Dohme (MSD), an affiliate of US-based Merck & Co, announced the opening of a new office in Lagos. The office is reported to be managed by Kingsley Okeke, a Nigerian national, and will comprise a team of 18 employees. The move is in line with MSD's strategy of expanding its geographic footprint in Africa and will enable the company to collaborate with local health professionals to address health issues in Ghana, Liberia, Sierra Leone, Gambia and Equatorial Guinea.
Simultaneously, MSD announced the launch of antiretroviral drug Atripla (emtricitabine + tenofovir + efavirenz) in the country. The drug is a one-pill-a-day treatment for HIV, and is already globally available. As patients are more likely to remain on therapy longer with simpler dosage, Atripla could be a major step forward in treating the disease in Nigeria.
In November 2012, GSK announced it would increase its stake in GlaxoSmithKline Consumer Nigeria (GSK Nigeria), bringing its total stake to up to 80% from the current 46.4%. The company is to purchase 341mn shares in the unit at a cost of NGN48 (US$0.30) per share. GSK said the transaction will be funded from existing cash reserves and will boost earnings immediately.
In October 2012, NAFDAC issued the deadline of January 2013 for all pharmaceutical companies to comply with the new technology of putting a scratch card, representing a secure unique number, on their anti-malarial drugs to stop imitation. NAFDAC launched a Mobile Authentication Services (MAS) technology which allows consumers to verify authenticity of the drug by texting the secure unique number to a certain number through SMS text messages. The January deadline is for anti-malaria products, and all antibiotic drugs are expected to be part of the technology by March 2013.
BMI Economic View: Nigerian growth will continue to be constrained by the headwinds which characterised much of 2012, including security concerns and the lingering effects of widespread flooding, into 2013. Nevertheless, the economy will still grow rapidly by global standards, at a forecast 6.8% in 2013, compared to our 2012 estimate of 6.6%.
BMI Political View: Although strong government action has seen the security situation improve in recent months due to a strong commitment by the central government, attacks by extremists in the north, and by pirates and saboteurs in the south, have continued, and we expect they will remain a serious challenge in the future. Meanwhile, the progress on key pieces of legislation is slow, but moving in the right direction.
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