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GSK Quits Kenya 4 Months After Nigeria’s Exit

GlaxoSmithKline (GSK), a British pharmaceutical multinational, has quit Kenya four months after its market-shaking exit from Africa’s largest economy, Nigeria.

In what appears to be a global restructuring of its business model, the company which produces prescription drugs and vaccines is set to adopt a distributor-led model to supply the country, a similar approach adopted in Nigeria in August.

GSK hinted that the operation at Nairobi’s Industrial area plant will remain open under GSK’s stand-alone affiliate, Haleon. According to a local news outlet in Kenya, this consumer healthcare venture deals in products like Sensodyne and Panadol.

GSK in July spun off the consumer healthcare business and listed it separately as Haleon in shake-up to focus on the lucrative prescription drugs and vaccines business, which has brands like Augmentin, Zentel and Ventolin.

“The production facility in Kenya is a Haleon facility, and is not the subject of the update that GSK gave in Kenya this week,” GSK said.

“We announced that for our GSK business, we would move to a direct distribution model. This means that instead of having a GSK commercial operation in the country we will supply our medicines and vaccines through a third party.”

The exit of GSK comes as the firm races to overhaul its global business in shifts that led to the spin-off the consumer health unit.

GSK turned down a £50 billion bid from Unilever for the unit at the end of last year, arguing that it undervalued the company.

The review of the Kenya operations comes nearly five years after the pharmaceutical giant announced it was cutting back operations in Africa.

It stopped marketing medicines to healthcare professionals in 29 sub-Saharan African markets but continued running local operations in Kenya and Nigeria while retaining representative offices in Cote d’Ivoire and Ghana.

In Kenya, GSK has made a bigger impact with its malaria and HIV/Aids drugs and antibiotics such as Augmentin and Panadol.

The pharma created the groundbreaking malaria vaccine, Mosquirix, piloted in Kenya last year, aimed at taming deaths, especially among children.

Its exit follows disappointing sales for many regional multinational pharmaceutical companies in the face of competition from cheaper generics from India and locally manufactured medicines.

Source: Business Day



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