Drug makers’ input costs almost double amid weak naira

Nigeria’s drug makers are battling with a rising input cost amid still sky-high inflation and weak naira that have seen their costs almost double in one year, an analysis by BusinessDay has shown.

Four of Nigeria’s listed drug makers saw their combined cost of sales surge from N15.5 billion in the first three months of 2024 to N29 billion in Q1 2025, an 88 percent leap, underscoring how naira volatility is driving up the price of imported raw materials.

Despite these mounting costs, the sector delivered robust top‑line growth over the same period as they jerked up product prices to stay afloat.

The four companies recorded total revenues of N45.82 billion in Q1 2025, up 76.3 percent from N25.99 billion a year earlier. Fidson Healthcare Plc led the pack with N35.02 billion, an 85.4 percent rise from N18.88 billion, followed by May & Baker at N9.51 billion, up 48 percent from N6.42 billion in Q1 2024.

Neimeth International nearly doubled revenue to N1.21 billion, an 86.1 percent jump from N648.3 million, , while Morison Industries Plc grew from N32.6 million to N91.5 million, a 180.8 percent increase.

On the cost side, Fidson’s expense doubled to N22.4 billion in Q1 2025 from N11.2 billion in the prior year. May& Baker’s cost of sales climbed 50 percent to N6 billion, Neimeth’s soared 296 percent to N566 million, and Morison’s rose 103 percent to N65 million. Together, these companies added N13.5 billion to their input bills year on year.

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Nigeria’s pharmaceutical market, valued at roughly $2.1 billion in 2023, is divided into over‑the‑counter drugs (43.1 percent), affordable generics (38.9 percent) and patented branded drugs (12 percent). Patented products rely almost entirely on dollar‑priced imports, meaning their naira‑cost has ballooned as the currency weakened.

In response, the Federal Government last year, issued an executive order suspending import duties and VAT on essential medical supplies to ease raw‑material pressures.

“By significantly reducing production costs, this initiative will enhance the competitiveness of local manufacturers,” says Chinyere Almona, director‑general of the Lagos Chamber of Commerce and Industry.

“The recent exit of some firms made drug availability difficult, so this policy comes at a good time.”

Data from the International Trade Centre show that pharmaceutical imports fell 23.4 percent to $1.05 billion in 2022, levels not seen since 2019’s $1.45 billion, due to FX scarcity.

But there is hope on the horizon as the naira has so far maintained stability and inflation moderating for the second consecutive months, suggesting that the firms’ costs may wane this year.