A CDD Fellow, Dr Kwame Sarpong Asiedu, has revealed that retail pharmacies in the country are trading at a loss.
According to him, the economic woes of the country has seeped through the pharmaceutical industry. He indicated that retailers in the country are equally dealing with the “local inflationary pressures” which impacts on the salary of their staff.
“The sad truth is that, I had a conversation with some pharmacies yesterday and a lot of retail pharmacies are trading at a loss. The reason they are, is because, like the wholesalers and manufacturers have said, when they bring the products in, they’ve got to make projections as to giving credit to the retailers for say a month, when they get their money back and what the dollar will be to reflect getting forex to go back and import.”
Dr Kwame Sarpong Asiedu
Dr Asiedu stated that the situation of the pharmaceutical retailers, especially considering CDD’s alerts in June and August, points to the trends in the alteration and pressures in the pharmaceutical supply change from the wholesale-retail standpoint. He explained that at the time, the change in price between December 2021 and June 2022 was between 33% and 49%.
“The cedi depreciation was just about 20% and we did predict that things were going to get worse and we did make projections as to how we could bring it down by providing forex at preferential rates to pharmaceutical manufacturers, wholesalers and importers. Because just as producer price inflation trickles down, wholesale price inflation in the pharmaceutical sector also trickles down to the retail sector and the end user tends to bear the brunt.”
Dr Kwame Sarpong Asiedu
To salvage the situation, the CDD fellow indicated that forex is crucial in ensuring the sector becomes robust.
Acquisition of pharmaceutical raw materials
On his part, David Kafui Klutse, a representative of the Pharmaceutical Manufacturers Association of Ghana, stated that the association has been significantly impacted by the inflation in the country because “pharmaceuticals requires a lot of importation of active pharmaceutical raw materials” for production processes. He noted that all these materials are bought overseas and require a lot of dollar component to make purchases.
“So, with the current depreciation of the cedi against the dollar, it makes it very difficult for us to plan and manufacture and price appropriately to the requirements and budgets of our citizenry.”
David Kafui Klutse
Mr Klutse highlighted that very few of the raw materials can be produced in Ghana as the majority of them have to be bought abroad. He explained that because the raw materials are at a pharmaceutical grade quality, indigenous manufacturers don’t have the capacity to produce a lot of the “pharmaceutical grade quality, API and active pharmaceutical ingredients” required for production.
Wading in on the conversation, the President of the Pharmaceutical Importers and Wholesalers Association of Ghana, William Adum Addo, underscored that the Association needs forex to do the import and the escalation of the dollar has posed threats to its survival. He lamented that the money required to do business has depreciated more than 50% to 60%.
“As we speak, the same one dollar is about GHC14 or GHC15. So, without even bringing the product in Ghana, the cost at the location, where you are going to pick it from, has dropped. In terms of the amount of money you need to bring the same item of 1 dollar, you need about GHC15; we are not talking about your bank loan which has also doubled to also 35% or 38%. We’ve not brought in your taxes at the port which has also doubled; because as the cedi depreciates, the taxes also goes up, because the taxes are pegged at the dollar at the port which changes every Monday.
William Adum Addo
Mr Addo revealed that members are under pressure to survive because their survival is in the interest of every patient and the populace at large.
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