Olufemi Adeyemi 

The CEO of May & Baker, Ajah, stated that the significant expense of medications is primarily attributed to the reliance of local manufacturers on imported active pharmaceutical ingredients (APIs) and packaging materials.


Mr. Patrick Ajah, the Managing Director and CEO of May and Baker Nigeria Plc, has expressed concerns that the prices of medicines in Nigeria will continue to be elevated until there are improvements in the country's power supply and foreign exchange conditions.

He noted that an executive order issued by President Bola Ahmed Tinubu on June 28, 2024, which exempts essential medical imports from duties and VAT, has not yet been put into effect, even after more than two months.

Ajah shared these insights during a press conference in Lagos, marking the 80th anniversary of May and Baker's operations in Nigeria.

He pointed out that the high cost of medicines is largely due to local manufacturers' dependence on imported Active Pharmaceutical Ingredients (APIs) and packaging materials, which are significantly impacted by the unstable and high exchange rates.

He emphasized that the pharmaceutical industry has made considerable efforts to lower medicine costs, including sacrificing profits, despite facing high foreign exchange rates and tariffs for importing APIs and packaging materials.

His statement highlighted the significant impact of GSK's departure: "Following GSK's exit, the prices of essential items like the Ventolin Inhaler, crucial for many asthma patients, surged dramatically.

“Any asthma patient facing a crisis without access to inhalers is at serious risk of death. The technical nature of the dosages involved means that no local company in Nigeria possesses the necessary machinery to produce these inhalers.

“When GSK was fully operational, the cost was approximately N1,800. However, once they announced their exit, these inhalers became unavailable. This issue extends beyond Ventolin to other inhalers like Seretide. The price of Ventolin soared to N25,000, while Seretide reached N50,000.

“A major contributing factor is our reliance on imports. Most of the active pharmaceutical ingredients (APIs) we utilize are sourced from abroad. I recently returned from India, where I observed that nearly all APIs, along with packaging materials and various other components necessary for medicine production, are imported.

“If a local company like ours were to manufacture these products, the costs would be lower compared to importing the finished goods, which entails importing every component.

“Since Nigeria floated the Naira, the exchange rate has escalated from N461 to a dollar to N1,600 to a dollar. We have been grappling for months to acquire dollars, with the lowest rate we can find being N1,509. When you factor in the increased costs of active ingredients, such as paracetamol, the financial strain becomes evident.

“Consequently, many companies are struggling to remain profitable, leading to numerous business failures. Without government intervention regarding the exchange rate, it is regrettable to say that drug prices will not decrease.

“We have repeatedly refrained from raising our prices. Recently, there was a slight decrease, bringing the rate down to N1,300, and we were hopeful. However, the current rate has now surpassed N1,500 to a dollar."

"We have refrained from implementing price increases on multiple occasions. Previously, when prices began to decline, they fell to N1,300, and we were optimistic about this trend. However, we are now aware that the rate has risen to over N1,500 per dollar.

"A few months ago, the government announced the immediate removal of tariffs on certain goods. This information was widely reported in the media, leading many to anticipate a decrease in prices shortly thereafter.

"Currently, I am part of a committee established to assist the government with this implementation. It has been over two months since the announcement, yet no progress has been made.

"While we can make such announcements, without proper implementation, there will be no tangible results. Moreover, even if implemented, it would only address a small fraction of the issue, perhaps around 5 percent.

"The foreign exchange situation remains a significant concern. For example, customs in Nigeria adjust their tariffs based on the prevailing exchange rate, despite operating within the country.

"This is the current landscape. However, for local companies, the situation is still more favorable than for those importing drugs, as we strive to manage our operational costs and limit price increases to what we believe consumers can afford.

"It is essential for our customers to be able to purchase our products. I must mention that the cost of electricity has surged by over 300 percent. While I won’t disclose specific figures, a colleague of mine has reported monthly electricity expenses ranging from N250 million to N300 million.

"This individual will also need to recoup the expenses associated with manufacturing the medication. Therefore, the total amount is substantial. I understand that this is largely influenced by the foreign exchange situation. However, we will continue to strive in the areas where we can lower prices to maintain stability."