…Runs from harsh economy
By Onome Amuge.
GlaxoSmithKline (GSK), a British multinational pharmaceutical and biotechnology company has drawn the curtain on its Nigerian subsidiary, after 51 years of operation in Africa’s largest economy over worsening economic pressure.
Consequently, GSK’s operations in Nigeria will no longer involve commercialising its consumer healthcare products, meaning its activities in the country will entail the distribution of its pharmaceutical products through a third-party direct distribution model.
The Haleon Group has also separately informed the board of its strategic intent to terminate its distribution
agreement in the coming months and to appoint a third-party distributor in Nigeria for the supply
of its consumer healthcare products.
The decision brings to a close GSK’s ties of more than half a century in the most populous African
country, where it commenced operations in 1972 through its precursor, Beecham Limited.
The partnership with Beecham gave rise to a broad range of top-of-mind products from
consumer brands like Ribena, Lucozade Macleans and Sensodyne to popular medicines
like Panadol and Andrews Liver Salt, consumed by millions of Nigerians across all social classes.
GSK Nigeria Plc, in a statement seen by Business A.M, said “In our published Q2 results we disclosed that the GSK UK Group has informed GlaxoSmithKline Consumer Nigeria PLC of its strategic intent to cease commercialization of its prescription medicines and vaccines in Nigeria through the GSK local operating companies and transition to a third-party direct distribution model for its pharmaceutical products.”
On its part, the board of GlaxoSmithKline Consumer Nigeria Plc concluded that there is no alternative but to cease operations.
“Today we are briefing our employees whom we will treat fairly, respectfully and with care, meeting all applicable legal and consultation requirements,” GSK Nigeria said in an official statement signed by its company secretary, Frederick Ichekwai.
GSK said it is holding talks with advisors who will inform shareholders of the next course of action
and will work out a quick cash distribution and return of capital to shareholders,
excluding GSK UK, if the Securities and Exchange Commission (SEC) sanctions the plan.
“We have been working assiduously with our professional advisors to agree on next steps and we will be shortly submitting to the Securities and Exchange Commission (SEC) a draft Scheme of Arrangement which may, if approved, see shareholders other than GSK UK, receive an accelerated cash distribution and return of capital,” the company stated.
“The Board acknowledges the support of the GSK Group in its intentions to make this possible, full details of which we hope to publish shortly. In the meantime, however, we cannot give you assurance of the final terms of any scheme, or that any scheme will be approved by the SEC or by shareholders,” GSK said.
Shareholders were therefore advised to seek professional advice and continue to exercise caution when dealing in the company’s shares until a further announcement is made.
GSK’s exit from the Nigerian market comes on the heels of recent warnings by pharmacists under the umbrella of the Industrial Pharmacists of Nigeria (NAIP) and Association of Community Pharmacist of Nigeria (ACPN) for Nigerians to brace up for scarcity of essential and non-essential/prescription drugs as prices soar by over 300 per cent due to devaluation of naira.
The pharmacists attributed the acute inadequacy of local manufacturers to an unconducive working environment.
Prior to this, pharmacists had, in May 2023, lamented the scarcity of drugs produced by GlaxoSmithKline in Nigeria.
Adewale Oladigbolu,president of the Association of Community Pharmacists of Nigeria, attributed the scarcity to supply chain shocks and the impact of COVID-19. This led to an unprecedented increment in drug prices by 300 per cent.
“There is a relative scarcity of GSK drugs and other products from other companies. That of GSK is pronounced because they are marketers of products that are widely known and widely used,” Oladigbolu said.
