Following the decision of GlaxoSmithKline (GSK) to leave the Nigerian market, sources close to the matter have suggested that the decision was not entirely due to operational reasons, as initially announced.
The leading pharmaceutical company, based in the UK, announced on August 3 that it would cease direct production and sale of its prescriptions in Nigeria and would instead migrate to a third-party distribution model for all its drugs already on the market.
The company claimed at the time that the transition was necessary due to a number of operational challenges, the most significant of which was the difficulty in ensuring a regular supply of the product in the Nigerian market.
GSK pointed out that it was struggling with the forex scarcity as well as the recent economic decision by the nation’s authorities to suspend fuel subsidy payments.
The company further explained that the recent economic climate had resulted in a high cost of doing business within the country.
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Since withdrawing its localized operation in the country, the price of GSK products, most of which are popular in their respective markets, have almost doubled.
According to Nigerian Journalist, David Hundeyin, the deciding factor in GSK’s decision to withdraw its activities was not “operational reasons” as previously thought but an attempt at a hostile acquisition of the company by a top cabinet minister in the Tinubu administration.
Mr Hundeyin revealed in a social media post on Saturday that the UK company chose to withdraw completely from the country when faced with the prospect of dealing with a powerful Nigerian figure.
“Instead of letting him take over their 50+ year-old Nigerian business, they decided to exit Nigeria and its wahala altogether, and start selling medication to the Nigerian market through a middleman (which means you will now pay significantly more for the same medication),” he tweeted.
Mr Hundeyin alleged that a similar strategy had been employed sometime back in the takeover of Nigerian Agip Oil Company Limited by Oando PLC.
“You will now buy GSK medication at up to 20x its previous price because a billionaire Nigerian cabinet minister decided he didn’t own enough assets and he wanted one more,” he added.
