Ever thought about starting a pharmaceutical business? The Nigerian pharmaceutical industry is one of the fast-emerging industries in Africa with potentials for further tremendous growth. This is largely because healthcare spending in Nigeria is often a private affair, out-of-pocket spending accounted for 70% of total health expenditure in 2016, compared with just 7% in South Africa. Several major pharmaceutical companies have already made their way into the Nigerian pharmaceutical market, and Goldstein Market Intelligence analyst forecast the Nigeria pharmaceuticals market size is set to grow at a CAGR of 9.1% over the forecast years of 2017-2030.
Currently, the Pharmaceutical Society of Nigeria (PSN), is the major umbrella body that regulates the activities of registered pharmacists in Nigeria and notable key players here include: Sun Pharma, Cipla, Candila. Glenmark, Abbott Nigeria, Biocon, Sanofi Nigeria, Elys, and Pfizer. Investment in the Nigerian pharmaceutical industry has a high potential of succeeding faster than others. Also the industry is expected to play a significant role in transforming Nigeria into a multi-million dollar economy.
At first glance, it’s tempting to assume that there are no opportunities for new entrepreneurs in the Nigerian pharmaceutical industry. Because it seems the industry has been filled with big names, however, this assumption ignores how complex and dynamic this industry is. Every step of the pharmaceutical process offers a myriad of opportunities for budding entrepreneurs to take the leap and come on board; the only catch is that you have got to know where to look.
Drug Marketing
One of such business opportunities in the Nigerian pharmaceutical industry is the area of marketing drugs and medications. Opening a medicines sales or-manufacturing company is incredibly lucrative. The sales aspect is poised to succeed because Nigerians buy drugs frequently. If you choose manufacturing, the development of these medicines requires different facilities and equipment. Not many people can afford them in the beginning.
You could also outsource the actual manufacturing of the medicines to medicines-manufacturing companies. When you start generating revenue, then start investing the money in your own company by hiring trained professionals to manufacture within your facility.
Drug Distribution
Distributorship of drugs is also an opportunity to step into the Nigerian pharmaceutical sector. As a distributor, you can streamline your customer base to cater to one or two successful businesses. Thus, you can earn income by selling and distributing medicines manufactured by pharmaceutical companies to these businesses. It doesn’t matter if they are privately owned hospitals or drug supermarkets. You could also connect with just one medicine manufacturing company as an independent marketer so that your credibility as a distributor will precede you when connected with new customers or companies.
Mobile Pharmacy
A mobile pharmacy is a pharmacy service that delivers drugs to people to their doorstep like any other deliverable service, and it is a relatively new concept in the pharmaceutical industry. Another option is alternative medicine, where you start a pharmacy that sells and supplies only herbal drugs. You can set up an online pharmacy after completing the requirements as stipulated by the Pharmacists Council of Nigeria Act. This is a lucrative business opportunity because it cuts downs the additional cost of rent and such to the barest minimum.
Challenges
Despite the avalanche of opportunities for new entries into the Nigerian health industry, this sector currently operates under a highly challenging business environment. For instance, the absence of stable electricity supply in the country has forced pharmaceutical companies to spend huge sums of money on alternative sources of power such as generators, solar energy sources and inverters. Each of these options cost a lot of money to maintain, thereby increases their costs of production and results in them overpricing their products to recover their capital which in turn drives away their customers.
High costs of imported pharmaceutical products, majority of raw materials, about 98 percent used in the production of drugs in Nigeria are imported. There are over 300 drug importers nationwide that flood the wholesale pharmaceutical market with their products. Retailers and private operators buy the products from the wholesale market to supply their customers and the cycle keeps going on.
Government’s efforts to limit the rate of imports isn’t entirely helpful because Nigerians have a lot of trust in imported drugs than locally manufactured ones. Counterfeiting of drugs is a major source of concern. Despite the efforts of NAFDAC, the perpetrators of this illicit business are not.
Managing risks in the drug manufacturing process and quality systems is crucial, but it is still challenging for the pharmaceutical companies to identify possible risks associated with a product or processes involved in manufacturing, development, and distribution of products.
Access to low interest funding is another major constraint being encountered by operators to increase and improve capacity of pharmaceutical companies to operate effectively or to compete favourably with their counterparts in other parts of the world.
The Nigerian government has a crucial role to play in revitalising our pharmaceutical industry if the country is to harness the huge untapped potentials in this sector fully. The best time for this was 20 years ago but the next best time is now. The government has to intervene to create an enabling environment for our pharmaceutical industry to thrive and contribute its quota in the national economy because these challenges are by-products of unfavourable policies of past governments over the years.
On the part of operators in the pharmaceutical industry, they need to understand that there is an urgent need to change their attitude and innovate their business models. It is also imperative for operators in our pharmaceutical sector to collaborate and partner with each other. They need to raise funds for research initiatives because this is a major area in the manufacture of quality medicines.
Opportunities and Challenges in Starting a Pharmaceutical Business in Nigeria – SME360
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