Dr. Ayebae has established himself as the symbol of the pharmaceutical industry’s power and compass for the future. In this interview, he spoke passionately on inadequate government support, the plight of local pharmaceutical companies, business expansion, sustainability, competition and many more.
You were the first company to bring out retroviral drugs in the Sub Saharan Africa. How do you feel about this achievement and did you achieve the objectives that informed the innovation?
The objectives for pursuing the manufacturing of anti-retroviral drugs locally were two. One was that people were dying because they couldn’t afford anti-retroviral drugs to manage HIV virus infection or keep it in check. Then, the treatment regime was going for thousands of dollars per annum. We then though of how we can help our fellow citizens, because in most part of the world, the drugs are being given free by the government. For this reason, we anticipated that sooner or later, our government would be buying in order to keep our fellow countrymen alive.
So, the first objective was to see how we can crash the price by manufacturing locally and we succeeded in doing just that. As soon as we started manufacturing, within months of launching the products, the price came down to about $500 per regime. The second side of it was to see how to sustain the availability of the product in the local market. One of the ways we could sustain it was to make sure it is being manufactured locally. In other words, when ever anybody wants it, it is readily available, not at the mercy of importation challenges.
That is something we have not been able to sustain, not because we are not willing to do it but because the Government that is supposed to be patronizing us suddenly stopped. There are two ways antiretroviral drugs are being procured or used by people that are HIV challenged. One is through international donors; the second is through Federal Government purchases funded by the federation budget.
Talking about the first one which is through international donors, we could not supply because part of the requirements for international purchases is that our factories must be W.H.O (World Health Organisation) certified and the products themselves must be W.H.O pre-qualified. So we do not have a W.H.O pre-qualified product neither do we have a W.H.O certified factory. This is one of the international politics that has been employed over the years to deprive developing nations of patronage of anti-retroviral, anti-T.B drugs or anti-malaria drugs. It is part of the international politics that developing countries have been subjected to over the years by the developed world.
We have some countries from in the world that put funds into a donor fund and they are expected as it were to dispense these funds to purchase drugs for the member countries. Now, Nigeria is one of the donors to that fund, but unfortunately, because of these so called funding rules that they have in place, Nigerian companies are not able to access international bids that ensure that we are able to avail ourselves of some form of patronage or the other that will improve our local industry.
However, during Obasanjo era, we did ensure through engagement with the government, that every fund was being used to purchase these products. We are W.H.O regulated to the extent that we have a NAFDAC, a local body that is internationally acclaimed that is regulating us. Therefore, the standard with which we were being regulated is the international standard. The only reason that we do not have the international qualifications as it were, is because the investment we needed to get the pre-qualification or to upgrade our factories to the level that we can be certified by W.H.O is a huge, running into millions of dollars.
After Chief Obasanjo left, the pipeline that was activated to facilitate the sales of our retroviral drugs was shut. Instead, portfolio vendors that come to Nigeria are being patronised. We have engaged the Federal Ministry of Health to facilitate strategies for ensuring solutions to this situation. We have about 110 local pharmaceutical companies in Nigeria and it is obvious that the capacity to manufacture these essential drugs is available and lying fallow.
How do you dispense anti-retroviral drugs?
They are purely prescriptive drugs for people that suffer HIV. They are sold to people who get prescriptions directly or they obtain it from Federal Government Medical Centres where they are dispensed free of charge. So the incidence of direct purchases is very low.
Do you have any technical partners and joint ventures?
In Nigeria we do not have any joint venture with anybody. What we have with some of our suppliers is technical collaboration .We have this collaboration with countries where we exchange technical know-how and ideas on best practices. We send our people out to learn one or two things because we know that production of drugs is also an art, though primarily science.
What prompted the listing of your shares at the Nigerian Stock Exchange, was there no fear for the bubbles?
There are two things. We wanted a company that will outlive us. Even after we would have gone, we want this company to remain. In the Nigeria of old, there were no second generation businesses that outlived the promoters of the business. Either because their children were not interested or the business was not left in the hands of professionals. One potent thing to sustain the company after many years that I would have gone is to bring in the investing public to buy into it. So if anything happens to me as the promoter, the board will appoint an adequate person to manage the company. The other way is to share success story to users of our products. About the bubble, I must confess I did not see any bubbles coming. But I must be frank to let you know that these things happen from time to time in the stock markets, but we did not foresee such a prolonged bubble as we have. One or two years are usually the duration of such bubbles and instability in the market. After all, it does not really affect your value and your operations as a company.
Do you have plans for more investors considering the capital intensive nature of the business?
No, currently we are doing two things. The new factory we are investing in was funded primarily through investors fund when we did our private placement. Now we have hoped to do an IPO for the remaining funds required to finish the project, but we could not do that because of the slump in the capital market. However, we have actually gotten mid-term loans from FCMB and BOI to finish the project. When there is stability in the market we could decide to go and raise funds to pay off both loans. A bit of credit is good for business. Right now we are not shopping around for any investor.
What are your plans for physical expansion?
We would prefer to concentrate on our core business area which is the manufacturing and marketing of core pharmaceutical products. We would not want to distract ourselves. However we do have a company affiliated with us that is into FMCG. This means we may see the name Fidson on some products but it is not going to be from the stable of Fidson Healthcare Plc. The plan for the next five years is to have a factory that is WHO certifiable within the next two years. We are already working on that. The factory has the nomenclature – BIOTECH, where we would be manufacturing infusions and where our current oral dosage forms will also be transferred, after which we would be able to go to the next step which is to pre-qualify some of our products. Once we have succeeded in achieving these, we would be able to export.
We will cover all the grounds in Nigeria before venturing into exporting. Exporting requires its own kind of specialization. Our business is very margin sensitive. It is penny sensitive. Therefore, one must do his homework properly before venturing into anything. The business is also technologically intense, they are things consumed by human beings therefore one has to be very careful. The only thing that is not imported in the process of producing our drugs is water. Every other thing from active ingredients to packaging material is imported.
How do you combat drugs counterfeiting and how do you scale the many hurdles of NAFDAC?
The NAFDAC team are courageous people. Most Nigerians will not know the risk they go through in sanitizing the industry. Selling fake and substandard drugs is big business like hard drugs business. It has become an enterprise of a type, which we will continue to fight. However, there is a two-prong approach that NAFDAC is using to fight the people dealing in fake drugs. One is via modern technology and the second is the traditional way of using the police at the borders to check thoroughly.
However the third way is to empower local manufacturers to manufacture all pharmaceutical needs in Nigeria. The industry can flourish if 80 percent of Nigerian’s pharmaceutical needs are manufactured locally. The incidence of fake drugs is with the imported drugs, if it is with the local drugs it is very low. For our own drugs at Fidson, we have introduced an innovative technology that makes it difficult to copy. For example we have enrobed one of our products in soft gelatine. If the local industry is well and up to do, NAFDAC will be able to dispense all their energy and concentrate on the local pharmaceutical companies.
Do you have any plans to go into vaccine production?
No, we have no plans to manufacture vaccines. Vaccines are a specialised area of pharmaceuticals. Although we are already talking to people on vaccines, but again vaccine is not like drugs that you sell in a pharmacy. Then, it is also important we know if the Federal Government is ready to patronise locally made vaccines. We have invested so much into liquid, ointment, capsules, tablets and dry powder and we want to concentrate on that.
What is your leadership style like and what are the challenges of sustaining your role?
My leadership style is basically is hands off management. This is to empower each and every one with authority. Then I am able to sift on a day to day basis through the departmental heads.
Which is your favourite brand from the Fidson Healthcare Plc stable?
There is no particular brand that is my favourite. Medicines are either for lifestyle, preventative or curative use. It is difficult to say that there is a particular one that I like because they are not cosmetics, neither are they apparels. Of course one is a larger portfolio that provides bigger revenue than the other. I actually will be giving away trade secrets if I tell you which one, but our competitors know.
The Federal government has mandated companies to give a portion of their profit to the society. How compliant are you. Do you have any worthwhile CSR projects?
For Nineteen years, Fidson’s CSR policy has been entrenched into the company’s system and operations. Annually, the company reserves certain percentage of its turnover for meeting its Corporate Social Responsibilities. Even in a challenging economic environment, the company has continued to embark on CSR initiatives in several areas that have a positive and measurable impact in the lives of Nigerians. The core of our CSR initiative revolves around children’s health, education, as well as community service and development. This has constantly spurred us to continue to make efforts towards improving the quality of life of Nigerian children in general. The fact that we are operating in a community makes us a corporate citizen of the community, this therefore gives us the moral obligation to share in the problems of the community and to help solve the challenges. These improvements on the quality of life encompass several areas including human life supports, children’s educational development, medical infrastructural development and government/private partnership and community development.
When you are not at work what do you do?
I go to the gym. I don’t belong to any social club. I don’t like going around like a superstar, the brand is much more important to me.