Samuel Okwuada, is the Chief Executive Officer and co-founder of Remedial Health, a healthtech startup digitalizing pharmacies and the pharmaceutical value chain. A pharmacist and serial entrepreneur, Okwuada in this interview, speaks on the removal of fuel subsidy on the cost of medicines and healthcare distribution in the country, and how pharmacies and Proprietary Patent Medicine Vendors (PPMVs) are leveraging technology to address challenges from rising costs among others.
What is the healthcare distribution system in Nigeria like, especially when it comes to medicines?
The healthcare distribution system in Nigeria, particularly concerning medicines, can best be described as archaic. Pharmaceutical companies typically operate independently, selling their products to pharmacies and Proprietary Patent Medicine Vendors (PPMVs) via multiple middlemen.
These neighbourhood pharmacies and PPMVs represent more than 85 per cent of medicines sold in the country. However, the fragmented nature of the market means it can be difficult for both manufacturers and healthcare businesses to maximise the opportunities in the market.
A big part of the distribution system is the three main wholesale medicine markets located in Kano, Lagos and Onitsha where medicines are sold in open-air markets that are generally not suitable for medicines and consumables.
Healthcare providers across the country often have to travel to these markets to access the inventory they need for their stores, taking them away from their stores and limiting their ability to serve their customers.
This approach differs significantly from the distribution systems in developed countries where the market has been integrated and prominent distributors cover the entire country.
Manufacturers and suppliers typically sell their products to these distributors, who then ensure the distribution of medicines to various pharmacies nationwide using technology.
Counterfeit medicines are also a significant problem, with counterfeit products accounting for approximately 40% of medicines in circulation in Nigeria. There are also other issues with the transportation network. Nigeria is heavily dependent on road transport and the road network in many parts of the country is not in the best state, particularly in rural areas.
This makes it difficult for people in these areas to access the medicines they need and sometimes opens the door to counterfeit medication.
These challenges have been exacerbated by the recent fuel subsidy removal and other economic headwinds impacting the country, making the distribution process even more complex and problematic.
What is the impact of the removal of fuel subsidy on healthcare distribution in Nigeria?
The recent removal of fuel subsidy has had a big impact on how we distribute medicines across the country. We now face much higher costs because we have to buy fuel at almost three times the price we used to.
Prices of medicines in some cases have gone up 30-40% over the past few months. It is also much harder for our delivery drivers, especially when they must go to remote areas.
How has the fuel subsidy removal specifically affected the cost of medicines in the country?
The removal of fuel subsidy in Nigeria has led to a substantial increase in the cost of medicines. This increase is primarily due to the surge in logistics expenses required for medicine distribution. Since the subsidy removal, our logistics costs have surged, even tripling in certain instances.
To cope with these rising costs, the prices of medicines have also increased, especially branded imported medicines. This has created a significant hurdle for people in Nigeria, especially those in need of life-saving medications.
How have pharmacies and Proprietary Patent Medicine Vendors (PPMVs) leveraged technology in mitigating rising costs and other challenges?
Pharmacies and Proprietary Patent Medicine Vendors (PPMVs) in Nigeria are using technology to deal with the challenges caused by the removal of fuel subsidy in healthcare distribution. Some of the solutions that they have increasingly adopted include mobile apps for digital procurement, which makes buying medicines easier and cheaper.
These apps also have a wide range of products, making it simpler to manage inventory and handle finances.
They have also leveraged their relationships with e-commerce platforms like ours to access inventory finance and other financial services to help them maximise the opportunities available to them at this time. They are basically accessing inventory on credit and paying for it after the medicines have been sold.
Over the last few months, we have seen a 40% increase in the adoption of our financing offering, as healthcare businesses explore how to navigate the various economic headwinds impacting the country.
Can you briefly tell us about Remedial Health?
Remedial Health operates at the intersection of healthcare, supply chain management, technology and financial services, delivering the digital procurement infrastructure to power effective healthcare distribution for Africa’s 1.2 million pharmacies.
Starting in Nigeria, Remedial Health has built an effective operating system for pharmaceutical buyers and suppliers, working with more than 300 manufacturers and serving more than 5,000 hospitals, pharmacies and PPMVs across 34 of Nigeria’s 36 states, with regional hubs to enable a seamless experience across the country.
Store owners can access more than 8,000 vetted products via the mobile app, with same-day delivery and inventory financing to minimise cash-flow friction for routine orders and maximise sales opportunities.
The startup also provides facility financing, payment solutions and inventory management solutions that make it easier for store owners to run their business more efficiently and profitably.
For pharmaceutical manufacturers, Remedial Health provides an effective route-to-market for their products, as well as data-driven insights into local markets that can be leveraged for more effective planning and decision-making.
What do you think Nigeria should do to scale up local production of drugs?
To boost local drug production in Nigeria, a comprehensive strategy is crucial. This involves substantial investment in advanced manufacturing and research, simplified regulations, and incentives for domestic pharmaceutical companies. Training programmes for skilled professionals, partnerships with international firms, and integrating technology for efficient production are also essential.
Maintaining global quality standards and strengthening intellectual property protections build confidence in local medicines.
Government commitment to purchasing from local producers and public awareness about domestic products is vital.
Improving infrastructure and collaborating with academic institutions drive innovation. This holistic approach aims to elevate Nigeria’s pharmaceutical industry, creating jobs, improving healthcare, and reducing import dependence.
Is there any other thing you would like to say?
Pharmacies in Africa currently act as defacto primary health care centres (people visit their local pharmacies for most health issues first before seeing a doctor) and we want to enable these pharmacies to fulfil this responsibility well with the aid of technology. Supply chain, and inventory financing help solve the medicine sourcing problem but there are still shortages of doctor and diagnostics services in Africa which we aim to tackle.