GSK terminates distributorship of 4 Ghanaian companies

Local pharmaceutical giants have expressed their fear of serious health implications following the decision of the United Kingdom (UK)-based pharmaceutical company, GlaxoSmithKline (GSK) Export Ltd, UK, to terminate its distributorship contracts for its pharmaceuticals with them in favour of Worldwide Health Ltd (WHL), a wholly Indian-owned company operating in Ghana.
The local companies fear that the distribution of several critically important medical products has been taken away completely from Ghanaians and given to one wholly-owned foreign company, thereby creating a monopoly and exposing the country to real risks, instability and possible arbitrary price rises.
The decision of GSK, therefore, means that WHL, the only distributor among the five in the country, will now be the sole distributor of products of GSK Export Ltd, which are critical to health delivery in the country.
The local companies believed that the impact of the decision on access to medicines by patients under the GSK brand with the exclusion of well-established distributors could be too costly to the health delivery efforts by the government. It is not only about the huge financial loss to the affected companies; it has national security and health implications, since GSK products are integral to the health management protocols in the country. Such products include important antibiotics such as Augmentin and Zinnat; asthma medicines such as Ventolin and Seretide.
Affected local pharmaceutical companies
The affected local pharmaceutical companies are Ernest Chemists Ltd, Unicom Chemists Ltd, Gokals Laborex and Parkenstein Ltd.
The termination of the distributorship contract with the local pharmaceutical companies with visibility throughout the country in favour of only WHL, which is just five years old in the country, with visibility only in some major towns in the country, can spell a disaster for quality health delivery in the country.
Information available to the Daily Graphic indicates that the local companies’ position is that the decision of GSK to terminate their distribution contract in favour of WHL, is in spite of the fact that the Ghanaian companies had been responsible for over 85 per cent share of the distribution of the products in the country with WHL distributing only 15 per cent.
Discriminatory
The local companies, therefore, consider the move as discriminatory on the part of GSK against local companies despite the fact that they had helped to build and establish the GSK brands over the years in the country. The companies questioned the relationship between GSK Ghana management and WHL, describing it as “questionable.”
They said they had invested heavily in the last 30 years and built huge capacity to effectively distribute GSK products in the country only for the contract to be terminated abruptly.
“We received the termination of the distribution between GSK and us with shock and great disappointment, considering our very cordial and fruitful business relations. We duly reckon your right as the exporter and your rights under the distributorship agreement to unilaterally terminate the agreement, even if, without any express breach of the terms.
“However, we also believe that our business relation over the past 30 years has been guided by GSK’s principles of building trust, transparency and fairness. This makes the sudden, unilateral and unexplained decision to terminate the agreement, very worrying, disturbing and in bad taste,” they stated in a joint letter to GSK.
Decision irreversible
The Daily Graphic was told that efforts by the affected companies to get the GSK Ghana management to rescind its decision proved futile because the management said the decision was irreversible.
Information available also indicated that the GSK decision had no bearing on the performance of the four companies and any breach of contract but was part of what GSK said was “an overall GSK strategy worldwide to simplify its distribution network.”
Appeal
The four companies have, therefore, appealed to the President, Nana Addo Dankwa Akufo-Addo, the ministers of Health and Trade and Industry, as well as the Food and Drugs Authority to intervene to get GSK to rescind its decision, “as it is not in Ghana’s national interest.”




Industry players
Industry players are equally worried that the decision has a serious implication on quality health delivery in the country.
“This decision is bad as it creates a monopoly for a foreigner on Ghana’s soil. It must not be tolerated. We are not against competition and so GSK must respect Ghana’s open door policy,” said a pharmacist.
A National Executive Member of the Pharmaceutical Society of Ghana (PSG), Mr Ernest Owusu Aboagye, said it was wrong to place the medicine supply into the hands of foreigners, describing it as “risky.”
He explained that in the event that the foreign company decided to close down its activities in the country unannounced, it could spell doom for health delivery in the country.
Mr Aboagye said Ghana welcomed healthy competition, “but to create a monopoly in no less a product than pharmaceuticals, is not in the interest of the country.”
“We cannot sit in a sovereign country for such unfair treatment to be meted out against us.
“We cannot be creating monopoly against Ghanaians in Ghana,” Mr Aboagye insisted.
GSK not forthcoming with response
Efforts to get the General Manager of GSK, Ghana, Mr Mark Pfister, to comment on the decision for more than a week, proved futile as the Daily Graphic was constantly informed that he was not in the office.
The office promised to get back to the Daily Graphic as soon as the general manager was in office. However, the Daily Graphic was called by someone who introduced himself as speaking on behalf of Mr Pfiser pleading that the story should be put on hold because GSK wanted to issue a press release.
FDA
The Food and Drugs Authority (FDA), the regulatory body that regulates medicines, has confirmed to the Daily Graphic that the four local pharmaceutical companies had petitioned it and it would respond appropriately.

Source:Daily Graphic