Nigerians bought N80.98 billion worth of drugs in 2022, increasing the amount spent in the preceding year by 22.95 per cent, Prime Business Africa learnt.
Five companies; Fidson Healthcare, Glaxo Smith Kline, May and Baker, Pharma Deko as well as Morison benefited from this whopping spend.
However, the industry is far from being largely profitable, as two of the companies suffered significant losses during the year in review.
The N80.98 billion generated by the five pharmaceutical companies is well above the N65.86 billion grossed by the drugmakers in 2021.
Prime Business Africa gathered that the drugmakers are burning most of their turnover on manufacturing their brands of drugs, as 66.38 per cent of the industry’s revenue is spent on making medicines available in the market or pharmacy.
The cost of sales grew by 35.38 per cent last year, recording a higher growth when compared to the 22.95 per cent growth in turnover for the same period.
This weighs on the drug companies’ bottom line, although the publicly listed firms managed to squeeze out N6.98 billion profit after tax amid the rising cost of sales, surpassing the N5.83 billion net profit reported in 2021. The industry’s profit after tax growth was slowed by losses reported by Morison and Pharma Deko.
Companies that benefited from high drug spend in Nigeria
This list is determined by the growth rate in profit after tax of the listed firms.
May and Baker
Despite not being the market leader, May and Baker was the highest beneficiary of the industry’s increased drug sales, as the firm reported 48.03 per cent in net profit.
Fidson Healthcare
Fidson Healthcare reported the highest growth in revenue for the financial year of 2022, recording 31.67 per cent, as turnover hit N40.63 billion, against N30.86 billion.
Glaxo Smith Kline
Glaxo Smith Kline came third on the list, as the company reported N692.05 million bottom line last year, which is 5.05 per cent more than the N658.81 million profit after tax earned by the drugmaker in 2021.
Losers of the drug market
Morison
Morison made the losers list as the cost of production increased by 78.96 per cent, after spending N121.86 million in 2022, up from the N68.09 million cost of sales reported in 2021.
Pharma Deko
Pharma Deko closed last year with a N141.60 million loss after tax, surpassing the N137.90 million loss recorded by the company in 2021.
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