Saturday, 3 June 2017

The unanswered Questions Surrounding Calabar Pharmaceutical Company (CALAPHARMS), As It Kicks off in October

Richard Duke 03-06-17

Calabar Pharmaceutical Company also known as CalaPharm Nigeria Limited is presently undergoing registration as a private limited liability company with the Corporate Affairs Commission.

The General Manager of the yet to be registered CalaPharm, Mr Farhan Khan recently stated that CalaPharm will be positioned to begin full production by October in order to align with the take-off of the Cross River State Health Insurance Scheme (also fondly known as Ayadecare).

The main investors of CalaPharm are Healthage Nigeria Limited (a Pharmaceutical Drug importation company based in Ikeja, Lagos also known as Healthage Pharmacy) owned by Farhan Khan, who is also the designated General Manager.

Healthage Nigeria Limited import NAFDAC approved drugs from Pakistan which are distributed in Nigeria with their locally produced drugs from their Lagos based Pharmacy.

The Pharmaceutical sector is very lucrative and while the local drug manufacturers have been only able to meet up to 25% of the drug demand in Nigeria; the gap of 75% is being met by pharmaceutical drug imports from Asia (mainly India,China and Pakistan). Healthage Nigeria have been a hybrid company manufacturing their own drugs locally which is supplemented by importing their own drugs too from Pakistan.

What is the guarantee that CalaPharm will not end up warehousing manufactured and imported drugs from their Healthage Nigeria Ltd sister company while fronting the production of basic generic medication?

What is the ownership structure of CalaPharm? What is the financial equity of CRSG in CalaPharm? What is the profit-sharing formula (if any) between Healthage Nigeria Ltd (the core investors) and CRSG (which is normally done through the MOFI vehicle) ? Although the government have inaugurated a Board for CalaPharm, it is still a private limited liability company with Mr Khan as the key investor. It would be useful to know what was agreed in the MOU arrangements.

According to Mr Khan, CalaPharm will be the biggest drug producing company in West Africa and will supply drugs to all the 18 local government areas, other States and neighbouring countries.

The business case for setting up CalaPharm makes a lot of economic sense. It is estimated that the Pharmaceutical market in Nigeria is worth around $1.4bn with a growth of 13%. Furthermore, the Pharmaceutical Council of Nigeria have confirmed that there are 128 registered drug manufacturers, 1534 retail pharmacies, 724 drug distributors and 300 drug importers in Nigeria.

However, there are over 10,000 patient medicine and proprietary stores in Nigeria selling over the counter drugs mainly in villages and poor communities. With an effective distribution structure in place CalaPharm's drug products will be made available in each of the 18 local government areas through new Pharmacy outlets in order to support the Ayadecare initiative. That's great, as there will be less dependence of all these over the counter dodgy drugs in our neighbourhoods.

Until the formal approval of CalaPharm Nigeria Ltd by the CAC we would not be able to make a formal FOI request to confirm the company Directors, the shareholding arrangements and whether CRSG's legal interest is noted or not.

•It would be noteworthy to add that another company,CalaPharm Global Services Ltd has already been registered since August 2016 (with an address at No 1 Old Secretariat Rd, Calabar) and we do not know the relationship between it and CalaPharm Nigeria Ltd yet. Pharmaceutical business is big business so we need to know who is getting what, how, when, and at what cost.