Pharmaceutical firms have long regarded Nigeria with interest, chiefly because of its massive middleclass population and rising GDP, although we caution that much of that GDP depends on oil revenues. Current plans for 10% of oil revenues to be directed at developing the Niger Delta region could be revised downwards if the president calls for electoral reform and remains the incumbent. This could escalate tensions between the north and south of the country ' with the north wanting a larger share of the revenues ' and raise risks for pharmaceutical firms looking for a Nigerian base. BMI identifies a number of key risks for pharmaceutical sector development in Nigeria: the weak regulatory environment; large numbers of counterfeit drugs; sporadic law enforcement for shutting down illegal pharmacies; low per-capita spending on medicines (although this is to be expected); supply chain issues; power generation and supply; and high unemployment and therefore a limited skilled workforce, among others. Infrastructure is also a key shortcoming in the Nigerian market. Most infrastructure investments have focused on transport and power generation, as when power stations are operating, there are frequent outages. For pharmaceutical firms with heavy energy demands, this means investment in separate generators to prevent losses during production. In its Q410 Business Environment Ratings, BMI gives Nigeria a total score of 35.8 out of 100. Against a selection of regional peers, it ranks below Ghana, but otherwise is generally in line with expectations. The population is expected to reach 166mn by 2014, while real GDP growth will continue just above 7% for the next five years. Unemployment is set to remain high, and will be 14.6% of the total labour force by 2014, although this is on a slow downward trend. High unemployment points to lower purchasing power, which means that we estimate per-capita spending on pharmaceuticals at a meagre US$4 in 2009, rising to US$8.3 by 2014. This is a marginal improvement, but indicates serious underlying irregularities in income distribution, particularly from the key oil sector. On the upside, low drug spending by a large population is still attractive to drugmakers, particularly those with generic medicines and essential over-the-counter (OTC) drugs. The latter is significant ' analgesic OTC drugs feature heavily in terms of sales volumes and BMI believes spending in this segment will continue to be just under one-fifth of total pharmaceutical spending in Nigeria over the medium term. We also consider Nigeria to be very much in the stages of high essential medicine demand, which is a key reason for the OTC market comprising a generous proportion of all medicine expenditure. Despite the risks, there are evidently opportunities ' Canadian drugmaker Valuben Pharmaceutical has recently stated its interest in forming a public-private partnership with the Nigerian government in the Living Spring Pharmaceutical firm. Valuben's experience in establishing operations abroad has led the firm to prospect the country and the Nigerian firm, in turn, stands to benefit from knowledge transfer.

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Nigeria Pharmaceuticals and Healthcare Report Q4 2010
Published on August 2010
Report Summary
Pharmaceutical firms have long regarded Nigeria with interest, chiefly because of its massive middleclass population and rising GDP,
although we caution that much of that GDP depends on oil revenues. Current plans for 10% of oil revenues to be directed at
developing the Niger Delta region could be revised downwards if the president calls for electoral reform and remains the incumbent.
This could escalate tensions between the north and south of the country ' with the north wanting a larger share of the revenues ' and
raise risks for pharmaceutical firms looking for a Nigerian base.
BMI identifies a number of key risks for pharmaceutical sector development in Nigeria: the weak regulatory environment; large
numbers of counterfeit drugs; sporadic law enforcement for shutting down illegal pharmacies; low per-capita spending on medicines
(although this is to be expected); supply chain issues; power generation and supply; and high unemployment and therefore a limited
skilled workforce, among others. Infrastructure is also a key shortcoming in the Nigerian market. Most infrastructure investments have
focused on transport and power generation, as when power stations are operating, there are frequent outages. For pharmaceutical
firms with heavy energy demands, this means investment in separate generators to prevent losses during production. In its Q410
Business Environment Ratings, BMI gives Nigeria a total score of 35.8 out of 100. Against a selection of regional peers, it ranks below
Ghana, but otherwise is generally in line with expectations.
The population is expected to reach 166mn by 2014, while real GDP growth will continue just above 7% for the next five years.
Unemployment is set to remain high, and will be 14.6% of the total labour force by 2014, although this is on a slow downward trend.
High unemployment points to lower purchasing power, which means that we estimate per-capita spending on pharmaceuticals at a
meagre US$4 in 2009, rising to US$8.3 by 2014. This is a marginal improvement, but indicates serious underlying irregularities in
income distribution, particularly from the key oil sector.
On the upside, low drug spending by a large population is still attractive to drugmakers, particularly those with generic medicines and
essential over-the-counter (OTC) drugs. The latter is significant ' analgesic OTC drugs feature heavily in terms of sales volumes and
BMI believes spending in this segment will continue to be just under one-fifth of total pharmaceutical spending in Nigeria over the
medium term. We also consider Nigeria to be very much in the stages of high essential medicine demand, which is a key reason for
the OTC market comprising a generous proportion of all medicine expenditure.
Despite the risks, there are evidently opportunities ' Canadian drugmaker Valuben Pharmaceutical has recently stated its interest in
forming a public-private partnership with the Nigerian government in the Living Spring Pharmaceutical firm. Valuben's experience in
establishing operations abroad has led the firm to prospect the country and the Nigerian firm, in turn, stands to benefit from
knowledge transfer.
Table of Content
Executive Summary . 5
SWOT Analysis 6
Nigeria Pharmaceuticals And Healthcare Industry SWOT ..... 6
Nigeria Political SWOT .... 7
Nigeria Economic SWOT .. 7
Nigeria Business Environment SWOT . 8
Pharmaceutical Business Environment Ratings 9
Table: Middle East And Africa Pharmaceutical Business Environment Ratings, Q410 ........ 9
Nigeria Pharmaceuticals and Healthcare Report Q4 2010 Page 1/5

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Rewards ........ 10
Risks .... 11
Nigeria ' Market Summary ....... 12
Regulatory Regime . 14
Recent Regulatory Developments ..... 15
Intellectual Property Regime ... 17
Counterfeit Drugs .. 17
Recent Developments in Regards to Counterfeit Drugs ........ 19
Table: Implementation Key To Success Now ...... 22
Pricing And Reimbursement Regime . 23
Industry Developments... 25
Epidemiology 25
Maternal and Child Health ...... 27
Communicable Diseases . 28
HIV/AIDS ...... 29
Recent Infectious Diseases Developments.. 31
Healthcare Financing ..... 32
Healthcare Provision ...... 34
Recent Healthcare Sector Developments ... 35
Healthcare Reforms ........ 36
Health Insurance ... 37
Table: Nigeria's National Health Insurance Scheme (NHIS) Key Facts .. 38
Traditional African Medicine ... 40
National Drug Policy ...... 41
Pharmaceutical Distribution.... 42
Medical Devices..... 42
Recent Developments In The Medical Devices Market 43
Table: Nigeria Free Zones: Key Incentives 44
Clinical Trials ........ 45
Industry Forecast Scenario ...... 46
Overall Market Forecasts ........ 46
Key Growth Factors ' Industry 48
Key Growth Factors ' Macroeconomic ..... 49
Table: Nigeria ' Economic Activity .. 52
Prescription Drug Market Forecast .. 52
Patented Drug Market Forecast ....... 53
Generic Drug Market Forecast 54
OTC Medicine Market Forecast ....... 55
Pharmaceutical Trade Forecast ....... 57
Other Healthcare Data Forecasts ..... 58
Key Risks To BMI's Forecasts . 59
Competitive Landscape .. 60
Pharmaceutical Industry . 60
Domestic Pharmaceutical Sector ...... 62
Recent Domestic Company Developments . 64
Foreign Pharmaceutical Sector ........ 65
Recent Foreign Company Developments ... 68
Research and Development ...... 69
Company Monitor ... 70
Indigenous Producers ..... 70
Nigeria Pharmaceuticals and Healthcare Report Q4 2010 Page 2/5

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Nigerian-German Chemicals PLC (NGC) . 70
Emzor... 72
Fidson Healthcare . 74
Archy ... 76
Neros Pharmaceuticals ... 77
Drugfield Pharmaceuticals Limited .. 78
Neimeth 79
Multinational Company Profiles ....... 81
Pfizer ... 81
Novartis ........ 84
Sanofi-Aventis ........ 86
GlaxoSmithKline (GSK) .. 87
Merck & Co .. 89
Country Snapshot: Nigeria Demographic Data . 90
Section 1: Population ...... 90
Table: Demographic Indicators, 2005-2030 ....... 90
Table: Rural/Urban Breakdown, 2005-2030 ...... 91
Section 2: Education And Healthcare ........ 91
Table: Education, 2002-2005 .. 91
Table: Vital Statistics, 2005-2030 ..... 91
Section 3: Labour Market And Spending Power . 92
Table: Consumer Expenditure, 2000-2012 (US$) ........ 92
BMI Methodology ... 93
How We Generate Our Pharmaceutical Industry Forecasts . 93
Pharmaceuticals Business Environment Ratings 94
Risk/Reward Ratings Methodology ... 94
Ratings Overview ... 94
Table: Pharmaceutical Business Environment Indicators .... 95
Weighting ...... 96
Table: Weighting Of Components ..... 96
Sources 96
Forecast Tables ...... 97
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