NIGERIAN: LOCAL DRUG MANUFACTURERS PUSH FOR IMPORT BAN

UNCLAS SECTION 01 OF 02 LAGOS 000378 SENSITIVE SIPDIS STATE PASS EXIM FOR JRICHTER STATE PASS USTR FOR AGAMA STATE PASS USAID FOR NFREEMAN, GBERTOLIN STATE PASS OPIC FOR ZHAN, MSTUCKART, JEDWARDS STATE PASS TDA FOR LFITTS, PMARIN DOC FOR 3317/ITA/OA/KBURRESS DOC FOR 3310/USFC/OIO/ANESA/DHARRIS DOJ FOR MARIE-FLORE KOUAME TREASURY FOR RHALL, DPETERS E.O. 12958: N/A TAGS: ETRD EIND EAID ECON PGOV PREL NI SUBJECT: NIGERIAN: LOCAL DRUG MANUFACTURERS PUSH FOR IMPORT BAN REF: ABUJA 1874 ¶1. (SBU) Summary: The Pharmaceutical Manufacturing Group of Nigeria (PMGMAN) is lobbying the Government of Nigeria (GON) for an import ban on additional pharmaceutical products, claiming that local manufacturing capacity is sufficient to meet Nigerian demand. Should the GON impose an import ban, multinational pharmaceutical companies fear they will be driven out of the Nigerian market. At the same time, Yar'Adua's Special Advisor on economic matters told Ambassador September 15 that Nigeria will likely reduce the existing number of bans, but these seems mostly on the agriculture side of the equation as opposed to an overall reduction. End Summary. Protectionism Behind Drive for Import Ban -------------- ¶2. (SBU) Jude Abonu, Director of Corporate Affairs for Pfizer, told EconOff on August 22 that PMGMAN, comprised of domestic drug producers, is pushing the GON to ban additional drugs, potentially including new patented "blockbuster" products, like hypertension medications, that are highly popular and profitable for the industry. (Note: GON banned 17 generic products in 2005. End Note) In July, the Ministry of Health (MOH) conducted a survey of local manufacturing capacity. The MOH only consulted PMGMAN members and did not include other stakeholder groups, including pharmaceutical importers and pharmacists. Abonu believes that the MOH conducted the study at the behest of PMGMAN, and the local firms surveyed grossly inflated their production capacity to convince the government that local production would be sufficient to meet local demand. (Note: The MOH has not published the survey's findings. End Note) Pfizer, along with other multinational companies, offered to pay for an independent third-party audit on the industry's local capacity, but the GON has not responded to the offer. Local Capacity Cannot Meet Quality, Demand -------------- ¶3. (SBU) Of the six major multinational pharmaceutical companies currently in Nigeria, only GlaxoSmithKline (GSK) has a local manufacturing factory. Other manufacturers import their products due to costs and concerns over Nigeria's ability to meet international quality standards in the manufacture of pharmaceutical products, Abonu explained. Convincing the GON of the detrimental business and social effects resulting from an import ban has been a challenge, and Abonu confessed that the industry does not always speak with one voice, hampering its ability to influence the debate. ¶4. (SBU) Kunle Okelola, Executive Secretary for PMGMAN, admitted to EconOff August 28 that local pharmaceutical manufacturers do not have the capacity to produce at international quality standards and have been operating around 40 percent utilization capacity in the past decade. According to Okelola, these same problems, instead of arguing against an import ban, are the reasons the GON needs to take steps to support local manufacturers. Okelola claimed that only for products that require sophisticated technology to make should be imported. Import Ban Will Drive Companies Out of Business -------------- -- ¶5. (SBU) Abonu estimated that over 70 percent of the drugs used in Nigeria are imported. A decision to impose an import ban would drive many multinational drug companies out of Nigeria, he predicted. Should the GON be determined to impose a ban on certain drugs, Abonu proposed a five year grace window within which multinational companies would be able to set up local production. (Note: Despite its large population, Nigeria has only a $218 million pharmaceutical market, one of the smallest in the Middle East and Africa, according to a survey conducted in 2007 by Business Monitor International. While low per capita income plays a large role in the underdeveloped market, the survey predicts market growth will remain slow due in part to the absence of a coherent and adequate regulatory regime and protectionist import regulations. End Note) ¶6. (SBU) Comment: Nigerian industry trade groups are forever calling for the GON to ban this or that. We have no information on whether their requests have gained any traction within the GON. LAGOS 00000378 002 OF 002 Pharmaceuticals are not like other items on Nigeria's ban list. There are a host of issues, like intellectual property rights and drug safety, which need to be considered. U.S. Mission works closely with the relevant GON entities to address these issues and will continue to do so. Multinational pharmaceutical companies' voice is an important one, along with ours, to get the GON to take these issues more seriously. ¶7. (SBU) That said, on September 15 a very senior GON official told Ambassador that President Yar'Adua has ordered his ministers, e.g. for commerce and industry and finance, to reduce the total number of bans to no more than six (See reftel). Time will tell. End Comment. BLAIR