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Viewing cable 08LAGOS378, NIGERIAN: LOCAL DRUG MANUFACTURERS PUSH FOR IMPORT BAN

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Reference ID Created Released Classification Origin
08LAGOS378 2008-09-25 07:56 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Lagos
VZCZCXRO1322
RR RUEHMA RUEHPA
DE RUEHOS #0378/01 2690756
ZNR UUUUU ZZH
R 250756Z SEP 08
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC 0186
INFO RUEHUJA/AMEMBASSY ABUJA 9838
RUEHZK/ECOWAS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
UNCLAS SECTION 01 OF 02 LAGOS 000378 
 
SENSITIVE 
SIPDIS 
 
STATE PASS EXIM FOR JRICHTER 
STATE PASS USTR FOR AGAMA 
STATE PASS USAID FOR NFREEMAN, GBERTOLIN 
STATE PASS OPIC FOR ZHAN, MSTUCKART, JEDWARDS 
STATE PASS TDA FOR LFITTS, PMARIN 
DOC FOR 3317/ITA/OA/KBURRESS 
DOC FOR 3310/USFC/OIO/ANESA/DHARRIS 
DOJ FOR MARIE-FLORE KOUAME 
TREASURY FOR RHALL, DPETERS 
 
E.O. 12958: N/A 
TAGS: ETRD EIND EAID ECON PGOV PREL NI
SUBJECT: NIGERIAN: LOCAL DRUG MANUFACTURERS PUSH FOR IMPORT BAN 
 
REF: ABUJA 1874 
 
1. (SBU) Summary: The Pharmaceutical Manufacturing Group of Nigeria 
(PMGMAN) is lobbying the Government of Nigeria (GON) for an import 
ban on additional pharmaceutical products, claiming that local 
manufacturing capacity is sufficient to meet Nigerian demand. 
Should the GON impose an import ban, multinational pharmaceutical 
companies fear they will be driven out of the Nigerian market. At 
the same time, Yar'Adua's Special Advisor on economic matters told 
Ambassador September 15 that Nigeria will likely reduce the existing 
number of bans, but these seems mostly on the agriculture side of 
the equation as opposed to an overall reduction.  End Summary. 
 
Protectionism Behind Drive for Import Ban 
----------------------------------------- 
 
2. (SBU) Jude Abonu, Director of Corporate Affairs for Pfizer, told 
EconOff on August 22 that PMGMAN, comprised of domestic drug 
producers, is pushing the GON to ban additional drugs, potentially 
including new patented "blockbuster" products, like hypertension 
medications, that are highly popular and profitable for the 
industry.  (Note: GON banned 17 generic products in 2005. End Note) 
In July, the Ministry of Health (MOH) conducted a survey of local 
manufacturing capacity.  The MOH only consulted PMGMAN members and 
did not include other stakeholder groups, including pharmaceutical 
importers and pharmacists.  Abonu believes that the MOH conducted 
the study at the behest of PMGMAN, and the local firms surveyed 
grossly inflated their production capacity to convince the 
government that local production would be sufficient to meet local 
demand. (Note: The MOH has not published the survey's findings. End 
Note) Pfizer, along with other multinational companies, offered to 
pay for an independent third-party audit on the industry's local 
capacity, but the GON has not responded to the offer. 
 
Local Capacity Cannot Meet Quality, Demand 
------------------------------------------ 
 
3. (SBU) Of the six major multinational pharmaceutical companies 
currently in Nigeria, only GlaxoSmithKline (GSK) has a local 
manufacturing factory.  Other manufacturers import their products 
due to costs and concerns over Nigeria's ability to meet 
international quality standards in the manufacture of pharmaceutical 
products, Abonu explained.  Convincing the GON of the detrimental 
business and social effects resulting from an import ban has been a 
challenge, and Abonu confessed that the industry does not always 
speak with one voice, hampering its ability to influence the debate. 
 
 
4. (SBU) Kunle Okelola, Executive Secretary for PMGMAN, admitted to 
EconOff August 28 that local pharmaceutical manufacturers do not 
have the capacity to produce at international quality standards and 
have been operating around 40 percent utilization capacity in the 
past decade.  According to Okelola, these same problems, instead of 
arguing against an import ban, are the reasons the GON needs to take 
steps to support local manufacturers.  Okelola claimed that only for 
products that require sophisticated technology to make should be 
imported. 
 
Import Ban Will Drive Companies Out of Business 
--------------------------------------------- -- 
 
5. (SBU) Abonu estimated that over 70 percent of the drugs used in 
Nigeria are imported.  A decision to impose an import ban would 
drive many multinational drug companies out of Nigeria, he 
predicted.  Should the GON be determined to impose a ban on certain 
drugs, Abonu proposed a five year grace window within which 
multinational companies would be able to set up local production. 
(Note: Despite its large population, Nigeria has only a $218 million 
pharmaceutical market, one of the smallest in the Middle East and 
Africa, according to a survey conducted in 2007 by Business Monitor 
International.  While low per capita income plays a large role in 
the underdeveloped market, the survey predicts market growth will 
remain slow due in part to the absence of a coherent and adequate 
regulatory regime and protectionist import regulations.  End Note) 
 
6. (SBU) Comment:  Nigerian industry trade groups are forever 
calling for the GON to ban this or that.  We have no information on 
whether their requests have gained any traction within the GON. 
 
LAGOS 00000378  002 OF 002 
 
 
Pharmaceuticals are not like other items on Nigeria's ban list. 
There are a host of issues, like intellectual property rights and 
drug safety, which need to be considered.  U.S. Mission works 
closely with the relevant GON entities to address these issues and 
will continue to do so.  Multinational pharmaceutical companies' 
voice is an important one, along with ours, to get the GON to take 
these issues more seriously. 
 
7. (SBU) That said, on September 15 a very senior GON official told 
Ambassador that President Yar'Adua has ordered his ministers, e.g. 
for commerce and industry and finance, to reduce the total number of 
bans to no more than six (See reftel).  Time will tell.  End 
Comment. 
 
BLAIR