Foreigners drive out Ghanaians from pharmaceutical industry

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INDIGENOUS pharmaceutical companies are on the verge of extinction as global pharmaceutical companies terminate distribution contracts and hand the contracts to companies said to be foreign distributors operating in Ghana.

Data compiled indicates that the market has grown to $522m in 2014 at a growth rate of 54% in cedi terms and 10% in US dollar terms.
Information gathered by The Finder indicates that US-based global biopharmaceutical company Pfizer; British pharmaceutical company, GlaxoSmithKline (GSK); Anglo-Swedish multinational pharmaceutical and biopharmaceutical company, AstraZeneca; French multinational pharmaceutical company, Sanofi S.A.; Johnson & Johnson, a leading US pharmaceuticals and healthcare company; and Italian multinational company, Rush Pharma, have either terminated their contracts or are in the process of terminating their contracts with Ghanaian-owned pharmaceutical companies. 
Huge financial loss for local companies 
The termination of the contracts would trigger huge financial loss to the affected companies and dampen the country’s efforts to grow the capacities of local pharmaceutical companies.
Survival of local pharmaceutical companies threatened
The termination of the distribution contract threatens the very survival of Ghanaian-owned pharmaceutical companies who have distributed products of these multinationals for years.
Industry watchers say the indigenous companies had invested heavily in the last 30 years and built huge capacity to effectively distribute products of the global producers in Ghana, only for the contracts to be terminated abruptly.
The local companies say they had helped to build and establish the brands of the global manufacturers to become household names, only for foreign distributors to unfairly be given the juicy opportunity to enjoy the benefits of their hard work.
Affected local distributors 
Persons familiar with these disturbing developments, and who do not want to be quoted, told The Finder that major local distributors of pharmaceutical products that have become household names, such as Ernest Chemists Limited, Unicom Chemists Limited, Gokals Laborex and Parkenstein Limited, have had their contracts terminated already.
The contracts of others have not been renewed even though they are yet to receive official communication from their foreign partners on the status of their relationship.
For example, GSK has terminated its distributorship contracts for its pharmaceuticals with four indigenous companies and has awarded the contract to Worldwide Health Limited.
Global manufacturers terminating contracts
Sources familiar with this disturbing development say other global giants, such as Pfizer, AstraZeneca, Sanofi, Johnson & Johnson and Rush Pharma, have not renewed their distributorship contracts for their pharmaceuticals with indigenous companies.
According to the information, these companies are also said to be in the process of awarding the contracts to foreign companies distributing pharmaceutical products in Ghana.
Analysts fear that if a monopoly is created in the distribution of pharmaceutical products, it may result in arbitrary price increases, with negative impacts on consumers, especially the poor and vulnerable.
Institutions silent
Questions are being asked why Food and Drugs Authority (FDA), Ministry of Health, Ministry of Trade, and the umbrella body for the industry, Chamber of Pharmacy, have not been seen taking action to save and protect Ghanaian businesses.
Market authorisation under threat
Industry watchers ponder the role of the FDA in protecting market authorisation holders for distribution in Ghana.
Ghana imports 70% of pharmaceuticals
Ghana imports 70% of pharmaceuticals into the country as only 30% are locally manufactured.
Pharmaceutical industry employs about 5,000 
Ghana’s pharmaceutical industry is the second largest in West Africa and directly employs about 5,000 people.
Industry was worth $522m in 2014
The Chamber of Pharmacy believes that the pharmaceutical industry in Ghana in 2013 was worth approximately GH¢940m ($475m), and that the market grew to GH¢1,509 million ($522m) in 2014 at a growth rate of 54% in local cedi terms and 10% in US dollar terms. 
$842m Industry by 2019
Furthermore, it forecasts that the market will grow to GH¢4.34bn ($842m) in 2019 at a compound annual growth rate of 23.5% in local currency terms and 10% in US dollar terms.
Structure of Ghana’s pharmaceutical industry
The first structure of the pharmaceutical industry in Ghana is a hybrid model wherein companies manufacture locally, import and distribute products from international principals, some of whom also even operate in the retail pharmacy space. 
The second structure is a 100% local manufacturing model, and third a model whereby importers bring in the finished product and distribute nationally through local distributors or their own distribution platforms. 
Information collected through the GMP Roadmap project, which started in 2013, suggests that Ghana has about 38 registered pharmaceutical manufacturers, an estimated 26 of which were active at the time of the GMP Roadmap process. 
It is believed that there are more than 243 national or regional wholesalers operating in the Ghanaian pharmaceutical market, over 2,400 licensed pharmacies, 42 AREPIs and an estimated 18,000 licensed over the counter medicine sellers.

By Elvis DARKO, Accra

ABOUT: Nana Kwesi Coomson

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An Entrepreneur and Philanthropist. Editor-in-Chief of A Senior Journalist with Ghanaian Chronicle Newspaper. An alumnus of Adisadel College where he read General Arts. He holds first degree in Bachelor of Arts from the University of Ghana; Political Science (major) and History (minor). He has also pursued MSc Corporate Social Responsibility (CSR) and Energy with Public Relations (PR) at the Robert Gordon University in the United Kingdom. He is a 2018 Mandela Washington Fellow (YALI) who studied at Clark Atlanta University on the Business and Entrepreneurship track. His mentors are Rupert Murdoch, Warren Buffet, Sam Jonah, Kwaku Sakyi Addo and Piers Morgan

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