May & Baker Cuts Profits to Keep Drug Prices Low 

May and Baker Factory .Photo credit :May and Baker

May & Baker Nigeria Plc, a major drug manufacturer, has revealed that pharmaceutical companies in Nigeria are cutting their profits to reduce the prices of medications. According to the company’s CEO, Patrick Ajah, May & Baker has only increased their prices about three times in the past year to ensure affordability, especially for their own products. 

The Impact of Rising Drug Costs 
Ajah noted that after several global companies, including GlaxoSmithKline, exited Nigeria, drug prices skyrocketed. This prompted the Minister of Health, Muhammad Pate, to gather local pharmaceutical manufacturers to find a solution. “We are sacrificing our profits and margins to reduce costs,” said Ajah. However, he warned that this situation can only be sustained for so long. 

Challenges with Foreign Exchange and Imports 
Most of the ingredients used in drug production, known as Active Pharmaceutical Ingredients (APIs), are imported. Ajah highlighted that while manufacturing drugs locally reduces costs compared to importing finished products, the challenge remains due to the unstable exchange rate. Since the government decided to float the Naira, the exchange rate has spiked from N461/$1 to N1,600/$1. This increase has made it difficult for companies to buy dollars, pushing some to the brink of collapse. 

We are sacrificing our profits and margins to reduce costs, but the challenges with the exchange rate and reliance on imported ingredients are making it harder for pharmaceutical companies to stay afloat. Without government action, things will only get worse.— Patrick Ajah, CEO of May & Baker Nigeria Plc 

Government Waivers and Vaccine Manufacturing 
The government had announced an import duties waiver for the pharmaceutical industry, but Ajah dismissed it as a “fake announcement” since nothing has been implemented. Even with the waiver, he believes it would only solve a small portion of the problem. May & Baker is also venturing into vaccine manufacturing through its Bio Vaccine subsidiary. The company recently received an order to supply 15% of Nigeria’s routine immunization vaccines. Additionally, May & Baker plans to launch seven new products in 2024 as part of its ongoing research and development efforts. 

Ajah stressed that without local control over APIs, the situation will worsen. He also called on the Federal Government to address the high exchange rates to save the pharmaceutical industry from further decline.