Why Are Antibiotics Drug Prices Out of Control Since GSK’s Exit?

In August 2023, the well-known British drug company, GlaxoSmithKline (GSK), stopped working in Nigeria. This has led to big changes in how easy it is to get and afford important medicines, like antibiotics. 

Over the last year, the prices of these medicines have gone up a lot, which worries both doctors and people who need these drugs. 

This article looks at why the prices of antibiotics have increased so much, focusing on the problems in Nigeria’s drug market and the impact of the country’s economic issues.

Here are five reasons that explain this troubling trend

Supply Shortages and Hoarding

 After GSK’s departure, an immediate shortage of their products occurred as suppliers and retailers began to stockpile goods. This hoarding behaviour, especially evident during the peaks of November 2023, drastically forced prices upwards. For instance, the price of Augmentin 625mg spiked by 525% to N25,000 in some pharmacies.

Dependence on Third-Party Distributors

GSK’s decision to rely on third-party distributors rather than direct distribution has contributed to inconsistent supply and price hikes. These distributors often face their own challenges, including increased costs and logistical issues, which are passed down to consumers.

Economic Instability

Nigeria’s economic environment, characterised by high inflation rates and exchange rate volatility, has impacted the pharmaceutical sector. These factors have driven up operational and import costs, making it difficult for companies to maintain stable pricing.

Counterfeit Products

The scarcity of genuine GSK products has paved the way for counterfeit medicines in the market. These alternatives are cheaper but potentially harmful, posing a significant health risk to consumers looking for affordable medication.

Increased Import Costs

 With GSK’s exit, the remaining pharmaceutical suppliers have to import more products to meet demand. However, the devaluation of the naira and high importation costs have made these imports more expensive, further driving up retail prices.