Friday, July 23, 2021

Pharmaceutical Industries in Nigeria: Challenges and Prospects

by | May 16, 2021 8

The pharma industry traces its root from two sources; the first of these were local apothecaries that expanded from their traditional role of distributing botanical drugs such as quinine and morphine to wholesale manufacture in the mid 19th century. The function of the industry is to research, develop, produce and market drugs or pharmaceuticals for use as medications. Its aim is to produce safe and effective medicines with cost efficiency and productivity to the manufacturer. The potential for national or local production of quality assured, low-cost pharmaceuticals to meet national needs is an issue that has been debated and discussed for several decades. The justifications or challenges that initiated the need for local production of pharmaceuticals include;

  1. The problem of lack of ready accessibility to available pharmaceuticals
  2. High prices for imported pharmaceuticals
  3. Poor quality of some pharmaceuticals

These challenges have prompted public and political interests in considering local production of pharmaceuticals with the aim to

  1. Promote self-sufficiency
  2. Achieve independence from international suppliers
  3. Develop local industrial capacity
  4. Produce foreign exchange through exportation of domestically manufactured medicines and
  5. Create new jobs.

Until the middle of the 20th century, most developing countries like Nigeria only imported finished pharmaceutical dosage forms such as suspensions, syrups, tablets, creams, ointments, suppositories, powders, capsules, and parenteral preparations all of which were imported by either multinational drug companies, government or some wealthy indigenous private entrepreneurs. Serious attention was not paid to the local production of raw materials, dosage forms or processing equipment. However, in recent times, the trend has changed and these are beginning to gain more attention especially the local production of dosage forms and some processing equipment.

Although a large proportion of dosage forms are still being imported or purported to be imported from industrially developed countries like India, China, USA, Europe, Parkistan, Taiwan, Brazil etc., government has also tried to encourage indigenous investors to move away from the sole importation of finished goods to the manufacture of simple products. This is an indication that serious effort still needs to be made in order for Nigeria to meet the drug and health needs of her citizens.

Common features of pharmaceutical industries in Nigeria

Because of the unstable socio-political atmosphere generated by crime and corruption in most developing countries, the economy still tends to show characteristic features of extreme capitalism and is still much consumer-oriented. Therefore, it has been clearly observed that indigenous industries in Nigeria whether pharmaceutical or otherwise have the same characteristics that can be summarized as follows:

  1. A high percentage of the processed raw materials are imported that is, the industries are secondary types with no primary base.
  2. Heavy machine and equipment used are mostly manufactured overseas and imported.
  3. Labour is still very cheap.
  4. The market is vast due to very high population in Nigeria.
  5. Highly qualified indigenes, professionals and research experts in universities and research centres are now being recognized and consulted for technical services. Unlike before where foreign technical advisers or experts are often preferred and consulted.

Nature of pharmaceutical industries in Nigeria

According to 1986 world bank report, the local production of drugs in developing countries is unrealistic except in countries with large local market and capacities to produce Active Pharmaceutical Ingredients (APIs) such as Argentina, Brazil, China, Egypt, India, Mexico and Thailand due to economies of scale and technological requirement for the manufacture of drugs. This led to a trend away from the promotion of local pharmaceutical production and laid more emphasis on the quality control of imported pharmaceuticals and licensed generic products manufactured by multinational affiliates. The globalization of the pharma sector and the advent of worldwide public health funding initiatives have led to a more competitive market for generic pharmaceuticals and this has resulted in a significant decrease in the prices of essential medicines.

Reports from a world bank 2005 study, reveal that there are several types of pharmaceutical manufacturers with different business models that operate manufacturing facilities in low- and middle-income countries. They include:

  1. Subsidiary of large multinational companies that manufacture patent-protected, branded products for local and regional markets.
  2. Global manufactures of generics that focus on developed markets in the United States, Europe, and large-middle income markets such as India and China. Some also have manufacturing operations in smaller developing countries or joint venture with local manufacturers.
  3. Generic companies with predominantly national operations that focus on the domestic market with occasional exports into neighbouring countries.
  4. Small-scale local manufacturers that usually make a limited number of products, including traditional medicines to serve local or regional markets.

In addition, most hospitals repackage medications in smaller, unit dose containers and may compound specialty items, such as creams with special formulations for their own patients and satellite facilities. This type of small-scale production of pharmaceuticals in a hospital pharmacy could include secondary production from existing raw materials that are usually imported and the packaging or repackaging of finished dosage forms into smaller dispensing packs and course-of- therapy packages.

Most of these manufacturers vary widely in their scope of operations/ production.

Levels of pharmaceutical manufacturing industries

There are three different levels of production that pharmaceutical manufacturing industries can operate and they include the primary, secondary and tertiary levels.

Primary production

Primary production is the processing of raw materials to create Active Ingredients (AIs) and additives/ excipients or ancillary substances used in pharmaceutical formulation. The final AI, which is the biologically active compound in the formulation that produces the therapeutic effect, should meet pharmacopeial or similar requirements. Primary manufacturing may involve either chemical or biological processes requiring different types of production facilities, technologies, skills and knowledge. The manufacture of active ingredients is the most expensive aspect of pharmaceutical production because of the necessary investment in capital equipment, process development and quality assurance systems. The more sophisticated the products, the greater the capability and skills required to develop and maintain the production processes.

Secondary production

Secondary production is the large-scale processing of finished dosage form such as tablets, capsules and injections, from raw materials or intermediate products, often from both local and imported sources. Production of sterile preparations (such as injections, antibiotics, and intravenous fluids) and nonsterile preparations (such as oral solids, liquids and topical preparations) can be carried out with either locally produced or imported packaging materials. Although less technically demanding than primary production, this stage must be completed to precise specifications. It requires modern, high-speed, precision equipment to produce pills, capsules, and liquids, often in large quantities and at very low unit costs, which are targets that small facilities find difficult to achieve, especially while also meeting international GMP standards. They can be seen as factories registered by law to formulate and produce various dosage forms. The secondary industries depend entirely on the primary industries for their drugs and excipient raw material inputs. Similarly, both the primary and the secondary industries cannot function without the ancillary or support industries, i.e, the tertiary industries such as the engineering/ tool industries, paper, plastic, glass and metallic packaging unit industries.

Tertiary industries

These include packaging and labelling finished products from primary and secondary sources into bulk packs, smaller dispensing packets, bottles, or course of therapy units for individual use. The initial quality of the pharmaceutical product established in the earlier phases of production must be maintained in the tertiary and final step, so ensuring high-quality standards through rigorous operational procedures is important. Tertiary production also addresses specific local needs for certain formulations, labelling, and packaging.

In addition to the above levels of production, pharmaceutical manufacturing industries can also be categorized into small, medium and large scale based on the overall production output. The small-scale industries are owned by private individuals while the medium scale is owned by a group of persons or shareholders. The so-called large scale industries are foreign controlled and made up of multinational corporations.

Cause of genuine drug product shortage in Nigeria

The major cause of genuine drug product shortage can be attributed to the following:

  1. Short supply of highly trained production pharmacy personnel.
  2. Lack of primary industries producing pharmaceutical grade raw materials in commercial quantities.
  3. Import syndrome and insufficient interest in local drug research and manufacturing.
  4. Discouragement from multinational companies whose parent associated companies overseas dictate the cost of raw materials and equipment used for production and quality control of dosage forms in poorer countries.
  5. Differential taxation policies of pharmaceutical materials both imported and local. This significantly affects the production decisions. If the public- policy goal is to create a level playing ground for producer decisions on what and where to produce, there should be no difference in the tax treatment of raw materials, both active and inactive ingredients, and finished products. Heavy taxation of packaging materials will deter local industrial development and lead to shortage.

Challenges faced by pharmaceutical industries in Nigeria

Wholesale importation of finished products, as well as retail pharmacy business, has been a flourishing business in Nigeria. Of recent, there has been a parallel increase in the local drug manufacturing. However, the former still flourishes more than the later due to the following factors:

  1. Very high demand of industrial conditions and standards required for both raw materials, dosage form processing, equipment and processing environment.
  2. Control of global drug business by multinational cooperations that have overcome most of their initial development problems.
  3. Unfair competition by imported products and multinationals.
  4. The need to standardise many drugs of herbal origin now circulating in Nigeria and Africa.
  5. Inability of developing countries to tap the research results from their basic or applied scientists lead to brain drain to foreign laboratories.
  6. There is still the inability on the part of the government to check illegal importation, manufacture and sale of fake, adulterated and substandard expired goods due to dishonest drug dealers and some corrupt government officials. The recent 100% check of containers has greatly reduced and discouraged the importation of fake, adulterated and substandard expired goods through ports of entry.
  7. Lack of effective research and development due to poor research support from the government and private companies.
  8. Unfair government policies
  9. Poor access to foreign exchange for sourcing/ import of raw materials.
  10. Spiralling cost of business
  11. Brain drain that is, the ability to find experienced and skilled staff, particularly scientists and engineers.
  12. Poor marketing and administrative structure.
  13. Poor or inexistent continuity plan beyond the CEO.

In addition to human resources, the reliability of water, power and environmental controls are central to the production decisions. If materials, equipment and spare parts are not available, items will have to be imported from countries with established pharmaceutical industries.


  1. Small-scale indigenous private or government manufacturing labs and research institutes are now beginning to compete favourably with the foreign-based companies even though we still depend on the imported raw materials and equipment.
  2. With the ongoing training of more pharmacists in the country, enlightenment of the citizens, pharmacists, politicians and licensed patent medicine vendor through workshops and mandatory continuing education programmes, awareness has been created and now there is more reliance on good quality products including those manufactured in Nigeria.
  3. There are now well qualified and registered pharmacists acting as consultants in drug product analysis and quality assurance. These analysts certify the genuineness or otherwise of locally manufactured or imported products.
  4. There is also a number of growing local industries that manufacture good plastic containers, starches for non-internal preparations, gums etc., and soon local manufacturers will no longer import most drug excipients. Many developing countries moved from mere packaging of finished products into the production of excipient raw materials formulation of dosage forms in commercial quantities for internal use and exports.

In conclusion, it is very clear that pharmaceutical industries in Nigeria are up against several constraints. In other to enable these industries to thrive and compete favourably with those in developed countries of the world, the government has a great role to play in infrastructural development, stable policies, security, enabling environment as well as developing the money and capital markets for easy access to medium and long-term funds.


Related Keywords: future of pharmaceutical industry in Nigeria, profitability of pharmaceutical companies in Nigeria, Nigeria pharmaceutical industry overview 2017, growth of pharmaceutical industry in Nigeria, Nigeria pharmaceutical market share and growth,  Indian pharmaceutical companies in Nigeria, challenges of pharmaceutical industry in Nigeria, baseline assessment of the Nigerian pharmaceutical sector


  1. Chukwuka Edoziuno says:

    I thank you for this explanatory post. It helped me a lot. More power, guys.

    • Pharmapproach says:

      We are happy you found it useful. Don’t forget to share the post.

  2. Najib Muhammad Lawan says:

    Thank you for this research, permit me to make reference of it.

  3. Najib Muhammad says:

    Thank you appreciate.

  4. Dr. Adekunle David says:

    Thanks for this piece. It’s informative. Can we have a private discussion?

    • Pharmapproach says:

      Yes, we can. You can contact me by using our contact us page.

Leave a Reply

Your email address will not be published. Required fields are marked *