Amid reports that United Kingdom pharmaceutical manufacturer, Glaxo SmithKline (GSK), is leaving Nigeria, the company said it is only changing its business model in the country.
Recall that Prime Business Africa reported that GSK Nigeria, the subsidiary of GSK UK, announced it will cease operation in the country, as the parent firm has ended its business dealings with the local unit.
GSK Nigeria was the sole distributor of the medicines and vaccines manufactured by the UK firm in the West African country, however, with the discontinuation of their business relationship, the former said it has no business to operate, hence, its decision to end operation.
Following the announcement that GSK Nigeria will cease operation, reports began to circulate that GSK UK is leaving Nigeria amid declining revenue.
However, a GSK spokesperson told Prime Business Africa that the company doesn’t have a manufacturing facility in Nigeria, and it is only changing its business model from a local operating company to a local third-party direct distribution model.
“The GSK Group is changing its business model in Nigeria, transitioning from a local operating company to a local third-party direct distribution model.
“We do not have any manufacturing facilities in Nigeria and this announcement applies to GSK’s commercial business only, which will undergo a phased redundancy programme impacting 160 employees.
“We are in the process of consulting with all impacted GSK people, whom we will treat fairly, respectfully and with care, meeting all applicable legal requirements,” the official said.
The company further stated that the change is necessary to enable GSK to operate effectively in Nigeria, “This change is a strategic business decision taken to make sure GSK is operating as effectively as possible to meet patient needs.
“GSK has supplied the people of Nigeria with medicines and vaccines for more than 50 years, and it remains our priority to ensure continued patient access in the decades to come. While the nature of the operating model is evolving, our dedication to the people of Nigeria remains steadfast.
“This change does not impact our global health programmes in Africa, and we will continue to work with distribution partners, governments, and NGOs to make GSK medicines and vaccines available to patients,” part of the statement to PBA reads.
On appointing a third-party distributor
GSK clarified that the company hasn’t appointed a third party and its transition from a local operating company to a local third-party direct distribution model will be based on a regulatory process.
Although the firm didn’t specify the timeframe, GSK said it hopes to announce the third-party distributor in the coming months, as the new business model will ensure the sustainable future supply of GSK products to patients in Nigeria.
“The GSK Group has not yet appointed a third-party distributor in Nigeria as part of our strategic business transition. When all regulatory and legal requirements have been met, we will accelerate the process of putting in place a third-party distribution model, in order to supply the market with pace.
“We aim to announce the name of the new distributor of GSK prescription medicines and vaccines in Nigeria in the coming months. This is a model that has been implemented effectively in markets in other parts of the world and we believe it will enable the sustainable future supply of GSK products to patients in Nigeria.
“Any third-party service provider we engage with will be subject to contracting and compliance requirements in line with local laws and regulations to ensure their services are delivered to the high standards required by GSK and in the best interests of patients,” the company’s official said.
On the impact of its new model on pricing
GSK said the pricing of its products will be determined by its partners, as well as circumstances within the operating environment.
The spokesperson stated: “GSK is committed to developing responsible pricing strategies, in conjunction with our partners, based on country specific circumstances and irrespective of business model that are accessible for patients and sustainable for our business.”