GLOBALIZATION AND PHARMACEUTICAL INDUSTRIES IN NIGERIA ( A STUDY OF ORIS UMOEZE NIG. LTD AND NIPRIPHARM LAB LTD IN ABUJA)

CHAPTER ONE

GENERAL INTRODUCTION

1.1. Background to the Study

Economic globalisation has led to the increasing economic integration and interdependence of national, regional and local economies across the world through an intensification of cross-border movement of goods, services, technologies and capital. Economic globalization has been expanding since the emergence of trans-national trade, it has however grown at an increased rate over the last few decades under the framework of General Agreements on Tariffs and Trades (GATT) and World Trade Organization (WTO) which made countries gradually cut down trade barriers. While globalization has radically increased economic integration and increased access to modern ideas, it has opened up the developing economies to stiff competition for the sale of their manufactured goods in the perfect market. Nigeria which is a developing economy has been engulfed by this wave of integration and therefore faces stiff competition in her international transaction with the outside world. This is even more challenging owing to the fact that it is signatory to the WTO and as such cannot make deliberate efforts towards protecting the local industry by placing barriers on the importation of certain goods into the country.

However, every society has its peculiarities and special health demands. Pharmaceutical products are usually developed in line with the nature of an environment and the health needs of the citizenry. It is therefore imperative that countries are self- sufficient in the area of drug production. This is also essential in view of the security implications involved in the importation of drugs from other countries.

The participation of developing countries in the globalization process should be an opportunity to better utilize their comparative advantage, employ advance technologies in their production process, and attract foreign capital and management experience. On the contrary, economic globalization has expanded the gap between the developed and developing economies. One of the major arguments has always been that it is a perfect market and free trade which means each economy has the power to determine its position in the international engagements. How then has economic globalization been a hindrance or otherwise to Nigeria‘s quest for self-sufficiency in the area of pharmaceutical manufacturing?

Despite the growing number of graduates of pharmaceutical sciences in Nigeria, the country still depends on importation for seventy percent of its drug needs. Globalization has seen to the flooding of the market to the point that even drugs which are on the federal government import prohibition list are still being imported into the country.

What then are the factors responsible for this problem?

1.2. Statement of Research Problem

The world has become so interconnected and it is unequally so that the developing economies have been exposed to the influence and dominance of the developed economies. Globalisation poses a serious challenge to Oris Umoeze and Nipripharm Lab limited because it encourages stiff competition between the products of these companies and the imported products and at the same time globalization comes with a global standard such that for every pharmaceutical manufacturing company to survive in this competitive environment it must be able to adhere to its tenets. This challenge affects the different sectors of the Nigerian economy differently. Yet, most studies have focused on the effects of globalization on the domestic economy in general without attention to each of the sectors despite the rapid increase in the importation of pharmaceutical products into the country. This study therefore set out to examine the effects of globalization on the pharmaceutical industries in Nigeria with a special focus on Oris Umoeze Nigeria Ltd and Nipripharm Lab Ltd in Abuja.

1.3. Research Questions

1. What is the position of Nigerian pharmaceutical industries in the era of globalization?
2. What are the effects of globalization on Oris Umoeze and Nipripharm Lab Limited
3. To what extent do domestic factors hinder these companies from achieving global standard?
4. How can Pharmaceutical Production be raised to International Competitiveness in Nigeria?

1.4. Aim and Objectives

The aim of this research is to examine the nature of Nigerian pharmaceutical industries in the era of globalisation. Specifically however, the research sought to achieve the following specific objectives:

1. To examine the position of Nigeria Pharmaceutical Industries in the era of globalisation

1. To examine the effects of globalization on Oris Umoeze and Nipripharm lab Ltd
2. To examine the extent to which domestic factors hinder the companies from achieving global standard.

1. To suggest ways that Pharmaceutical Production can be raised to Global Competitiveness in Nigeria

1.4. Research Assumptions

This research is premised on the following assumptions:

1. Nigerian pharmaceutical industries is inefficient in this era of globalization
2. Globalisation is the major factor responsible for the poor performance of Oris Umoeze and Nipripharm Lab Ltd.
3. Domestic factors are the major hindrances to the effective performance of Oris Umoeze and Nipripharm Lab Ltd
4. Pharmaceutical Production process in Nigeria is below International Competiveness Standard

1.6. Research Methodology

This research employed two sources of data collection; primary and secondary sources. To get the primary data, the survey method of data collection and interview were employed. Questionnaires were distributed to the relevant stakeholders; Oris Umoeze Nigeria limited, Nipripharm lab limited as well as pharmaceutical importers, distributors, wholesalers and retailers; and extensive structured face-to-face interviews were conducted. Analysis of relevant literature was also carried out to utilize the content of communication and internet materials were also consulted.

1.6.1. Population of the study

The focal point of this research is the pharmaceutical industries in Nigeria. However, Oris Umoeze and Nipripharm Lab Ltd are used as case study in this research. These two pharmaceutical companies are located in the Federal Capital Territory. Therefore, the other stakeholders who form part of the population of the study are professional pharmacists and pharmacy practitioners such as pharmaceutical importers, wholesalers and retail premises in Abuja. These respondents were chosen because they are expected to be the immediate customers of the products of Oris Umoeze and Nipripharm Lab Ltd. The staffs of the National Agency for Food drug administration and Control (NAFDAC), Pharmacist Council of Nigeria (PCN) and the Federal ministry of Industry, trade and investment were the major respondents through which data were sought for this study. The staff of these institutions were consulted for data because they are directly involved in Nigerian Pharmaceutical industries as well as their international transactions.

1.6.2. Data Collection

The two pharmaceutical manufacturing companies; Oris Umoeze Nigeria Ltd and Nipripharm Lab limited are located in the Federal Capital Territory. Therefore, data were generated from the staff of pharmaceutical manufacturing companies themselves, as well as pharmaceutical importers wholesalers and retailers as well as patent drug vendors in the area. This was done because the premises are the closest to the Pharmaceutical manufacturing companies and should be their immediate customers.

1.6.3. Sampling Procedure and Sample Size

There are three hundred and thirty-two (332) PCN licensed Pharmaceutical retail premises in the Federal Capital Territory. One hundred and sixty-six (166) of this was selected through systematic sampling technique. The pharmaceutical retail shops were arranged in Alphabetical order and the second unit after each selection was taken resulting in a sample size of one hundred and sixty-six (166) for the pharmaceutical retail shops. Only twelve (12) companies are licensed drug importers in Abuja. Due to the size, they were all covered. The PCN also licensed forty-five (45) wholesale premises; twenty-three (23) of this was selected through the same systematic sampling technique. Having selected (22) through alphabetical arrangement, the last company was added thereby bringing the number to (23). Also, the systematic sampling technique was adopted in selecting a total of thirty patent drug vendors; five from each of the six area Councils of the federal capital territory. The total number of patent drug vendors in the FCT was still being compiled by the Pharmacists Council of Nigeria (PCN) Head Office, Abuja, as at the time of this study. Therefore, the exact number is not at the researcher‘s disposal for this work. As stated earlier, questionnaire was also used in generating data from Oris Umoeze and Nipripharm Lab Limited in Abuja. Accordingly, the sample size for the respondents to the questionnaire was two hundred and thirty-three (233).

Purposive sampling technique was employed in selecting the respondents for the structured face-to-face interview. Thus only pharmacists and pharmacy practitioners and government officials in involved with the pharmaceutical industries were interviewed. The researcher also used two research assistants who helped tremendously in the distribution and retrieval of the questionnaires.

1.6.6. Analytical Technique

With the permission of some of the respondents, the interviews were recorded via a tape recorder. Each session of the interviews lasted between forty-five minutes to one hour depending on the disposition of the respondents. A total of seven respondents were interviewed. This was later transcribed into notes and the content further selected into various themes in line with the research objective and references were made to them in the discussion segment.

Descriptive method of analysis using the Statistical Package of the Social Sciences, {SPSS) was used in analyzing the questionnaire. A number of journals and internet materials and other publications were also examined to corroborate the data generated from interview and questionnaires.

1.7. Significance of the Study

One cannot deny the fact that a lot has been written on the effects of globalization on industrial development but the pharmaceutical industry which is the bedrock of a healthy nation is usually subsumed in the general study of globalization. Nigerian Pharmaceutical industry has not been performing optimally owing to a number of factors. This study is therefore significant because it carefully analysis the nature of Nigerian Pharmaceutical industry in this era of globalization with special attention on Oris Umoeze Nigeria Limited and Nipripharm Lad limited. These too companies have been struggling to be major players in the pharmaceutical sector, but this has been a big challenge due to the factors discussed subsequently in this work. Therefore, this study is significant because it has brought to the fore the factors militating against the effective performance of these companies within the framework of a global standard. This study will also help decision makers in the area of economic policies have information on the state of the pharmaceutical sector in Nigeria in the global economy.

1.8. Scope and Limitations of the study

This study focuses on the Pharmaceutical industries in Nigeria but Oris Umoeze and Nipripharm Lab Ltd were used as case study. These companies, as earlier stated, were chosen in view of the fact that they have not been able to perform optimally. It therefore becomes imperative to examine the situation in line with global pharmaceutical practices and globalization. However, this study would have been broadened but for lack of financial resources to gather data from other pharmaceutical manufacturing Companies outside the Federal Capital Territory (FCT), focus was restricted to the FCT.

1.9.7. Chapters Outline

This work is divided into five Chapters. Chapter one introduces the topic. Here the researcher established the problematic of Nigerian Pharmaceutical industries in the era of globalization. In Chapter two, attempt was made to carefully review the major literature relevant to the research problem. This was done thematically; focusing on issues and concepts pertinent to the topic. In this process, it was discovered that attention has not been given to the pharmaceutical industries especially Oris Umoeze and Nipripharm Lab limited within the framework of globalization. This is therefore the gap filled by this study. The theoretical framework for this study is also clearly stated in this chapter. This study adopts the economic perspective of globalisation. The core of this research which is an examination of Nigerian Pharmaceutical industry in the era of globalization focusing on Oris Umoeze and Nipripharm Lab Limited was handled in chapter four. This is done thematically and statistically so as to give a clear picture of the position of Oris Umoeze and Nipripharm Lab limited within the framework of economic globalization. The data generated from the field were carefully analyzed, discussed and the findings presented in an appropriate format. Chapter five is a summary of the entire research. Here conclusions were made and the findings were clearly itemized. All the materials consulted in the process of this research have been carefully documented at the end of this work.