Pharmaceutical industry, GlaxoSmithKline (GSK), a global pharmaceutical giant, has decided to exit the Kenyan market after nearly six decades of operations.
This decision comes on the heels of a similar withdrawal from the Nigerian market just four months ago, signaling a strategic shift in the company’s regional focus.
GSK, which has been a key player in Kenya’s pharmaceutical sector since the 1960s, has opted to transition to a new business model.
The company will now rely on distributors to supply its products in regional markets, citing a move towards a more streamlined and cost-effective approach.
This departure, however, does not mean a complete disengagement from Kenya, as GSK will retain its manufacturing facility situated in Nairobi’s Industrial Area. This facility operates under GSK’s independent consumer healthcare subsidiary, Haleon.
Haleon, separated from GSK in July 2022, is set to become a pivotal player in GSK’s continued presence in Kenya. The subsidiary specializes in consumer healthcare products, including well-known brands like Sensodyne and Panadol.
GSK emphasized that the manufacturing facility under Haleon is not part of the recent update affecting the company’s direct commercial operations in Kenya.
The company clarified that it intends to concentrate on its core strengths, particularly the lucrative prescription drugs and vaccines business. GSK’s portfolio in this domain includes renowned brands such as Augmentin, Zentel, and Ventolin.
The decision to shift to a direct distribution model aims to enhance efficiency and responsiveness in the supply chain while maintaining a strong foothold in the prescription drugs and vaccines market.
GSK’s strategic realignment follows a series of notable events, including the rejection of a multi-trillion buyout bid from multinational Unilever in 2022. GSK deemed the bid undervalued, leading to a subsequent downsizing that saw the cessation of marketing medicines to healthcare professionals in 29 sub-Saharan African markets.
Despite these adjustments, the company continued its operations in Kenya and Nigeria until these recent exits.
The exit of GSK from the Kenyan market has sparked concerns about the current economic environment in the country. This move aligns with a broader trend, as between July 2022 and June 2023, approximately 2,030 businesses, all previously registered with the registrar of companies, ceased operations in Kenya.