June 11, 2024

Central News

at the center of it

British pharmaceutical giant GlaxoSmithKline finally ‘abandons’ Africa

IN a significant move that has sent shockwaves through the pharmaceutical industry in Africa, GlaxoSmithKline (GSK), a British multinational pharmaceutical company, has decided to quit Kenya.
This comes just four months after it departed from Africa’s largest economy, Nigeria.
This sudden exit is part of a broader global restructuring effort by GSK, which involves transitioning to a distributor-led model for its operations in these African nations, mirroring the approach it adopted in Nigeria back in August.
The decision to shift to a distributor-led model by GSK signifies a strategic transformation in its business operations within Africa.
Instead of maintaining a direct commercial presence in these countries, the company will now rely on third-party distributors to supply its medicines and vaccines.
This shift is driven by GSK’s desire to streamline its operations and focus on its core business areas, particularly the prescription drugs and vaccines sector, which boasts a portfolio of renowned brands like Augmentin, Zentel, and Ventolin.
The company has clarified that its production facility in Kenya, located in Nairobi’s industrial area, will continue to operate under GSK’s stand-alone affiliate, Haleon.
This subsidiary focuses on consumer healthcare products such as Sensodyne and Panadol. GSK has a separate entity for its consumer healthcare business
In July, the conglomerate took a significant step by spinning off its consumer healthcare business and listing it as a separate entity known as Haleon.
GSK’s decision to transition to a distributor-led model in Kenya is aligned with its global strategy, emphasizing efficiency, competitiveness, and growth in key markets.
It’s exit from Kenya comes amid a broader overhaul of its global business operations. Notably, GSK turned down a £50 billion bid from Unilever for this unit, signaling its commitment to maximizing the value of its prescription drugs and vaccines business.
Review of it’s operations in Kenya, as in Nigeria, is a culmination of a process that began nearly five years ago when the pharmaceutical giant announced its intention to scale back operations in Africa.
While it ceased marketing medicines to healthcare professionals in 29 sub-Saharan African markets, it continued to maintain local operations in Kenya and Nigeria, alongside representative offices in Cote d’Ivoire and Ghana.
Throughout its presence in Kenya, GSK has made a substantial impact on the healthcare landscape. It is known for providing essential medicines, including those for malaria, HIV/AIDS, and antibiotics like Augmentin and Panadol.
Notably, GSK was behind the development of the groundbreaking malaria vaccine, Mosquirix, which was piloted in Kenya last year to reduce malaria-related deaths, particularly among children.
Its exit from Kenya, as well as departure from Nigeria, underscores the challenges faced by multinational pharmaceutical companies operating in Africa.
These challenges include competition from more affordable generic medicines, often sourced from India, as well as locally manufactured pharmaceutical products.