International School Of Management

Sciences
Newport University, Karachi

The Contribution of
Multinational Pharmaceutical Companies
In the Development of Pakistan Economy
(A Feasibility Study)

Presented To

The Board of Advance Studies & Research

Newport University

In Partial Fulfillment of the Requirement of

The Degree of Master’s Of Business Administration in
Marketing

Submitted By

Naveed Shahban Ahmed

1999

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RECOMMENDATION FOR ORAL EXAMINATION

This Thesis entitled Contribution of Multinational Pharmaceutical

Companies in the Development of Pakistan Economy (A Feasibility
Study) prepared by Mr. Naveed Shahban Ahmed in partial fulfillment of
the requirement for the Degree of Master in Business Administration,
(Specializing in Marketing), has been examined and is recommended for
oral examination.

S. H. SHAHID, Ph.D.
Research Advisor
Newport University (ISMS)
Karachi Campus

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 APPROVAL SHEET

This research study has been examined and assessed for Partial Fulfillment
of the Requirement for the degree of Master Of Business Administration,
(Marketing major). This study is approved by the examiner on oral
examination with the grade of____________

S.H.SHAHID PhD.
Examiner

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 LETTER OF ACCEPTANCE

This research study entitled “Contribution of Multinational Pharmaceutical

Companies in the Development of Pakistan Economy, (A Feasibility
Study)” prepared by Naveed Shahban Ahmed, is accepted in Partial
Fulfillment of the requirement for the award of Master’s Degree in Business
Administration, (Marketing Major).

Mirza Raza Ali,

Chief Executive Officer,
NewPort University,
Karachi Campus

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 ABSTRACT

Research and discovery are the essence of the pharmaceutical industry, and
its successes have, over the past forty years, played a crucial role in
maintaining the pre-eminent position of the pharmaceutical industry in the
world today. But such activities demand a sustained rate of huge investment
over a long period.

The increasing sophistication of medical and research instruments and of

computers for molecular modeling has opened up important new medicine
developed opportunities. But they are expensive and have added to the
overall research costs as well as volume of investigation being undertaken
by the pharmaceutical industry. It is estimated that it takes on average 12
years from parent filing to the launch of a major innovative medicine at a
total cost of around US $400 million, as compared with US $100 million
reported in 1985. Even so there is no guarantee of success in a highly
competitive market where novel products are constantly and rapidly made
obsolete or entirely replaced by new innovations - New Chemical Entities
(NCEs)

Originally the Pakistani pharmaceuticals industry engaged in the packing

and distribution of imported medicines. Even now the manufacture of drugs
are limited, due largely to non-availability of raw materials. The industry
has emerged as a processing and conversion industry, which is engaged
mainly in converting raw material into different dosage forms and packing
of the finished products.

The Pakistani Pharmaceutical industry has been undergoing a great deal

of criticism and is probably a victim of misinformation. The defamatory
remarks, accusing the manufacturers of marketing and selling the medicines
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at very high prices were made in certain sections of the press. Though this
allegation has no concrete basis, as the Pharmaceutical Industry is highly
regulated, suspicious do come to mind. Moreover, much has been said
accusing the industry of producing low quality drugs and catering to a
monopoly. These remarks can do a lot of harm to the industry and measures
should be taken to keep the industry from earning a bad name.

However, the main purpose of this study is to find out the main contribution
of Multinational Pharmaceutical Companies in the development of Pakistan
economy, in this regard the researcher can not dispense with out it to say
that a lot of problems are also being faced by the industry that poses threat
to the country’s health care system.

The study focuses to discover the “The contribution of Multinational

Pharmaceutical companies in the development of Pakistan economy”

In so doing, the researcher is attempting to highlight the following areas so

that the insight can be obtained.

• The strategies of multinational pharmaceuticals

• The investments of multinational pharmaceuticals.
• The social contributions by the multinational pharmaceuticals.
• The problems faced by the multinational pharmaceuticals.
• The growth chances of multinational pharmaceuticals.

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 ACKNOWLEDGEMENT

All thanks to Almighty Allah who provided me moral courage and spiritual
inspiration to keep me on the right path to achieve plans and goals in my
life.

I would like to express my sincere gratitude to all my professor who guided

me during the completion of my Master in Business Administration.

I am Thankful to my research advisor Dr. S.H. Shahid for his valuable

comments and suggestions during the completion of this thesis.

I am also thankful to Mr. Z.K. Jaffery and Mr. Baqar Raza for his
cooperation in obtaining important information and published material of
Multinational Pharmaceutical Companies.

I expressed my profound thanks to my friends Mr. Majid Shoaib and Mr.

Aamir for his assistance in collecting data.

Lastly I would like to express my love to affectionate parents, sisters, bhabi

and specially brother Kamran Ahmed Bhimra for their continuos
encouragement.

May Allah reward all of you for your guidance; I wish you all happy life.

Naveed Shahban Ahmed

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 DEDICATION

I dedicate this thesis to my beloved parents

Who have given the inspiration in

My life by educating me

And

Praying

For the success and happiness.

Naveed Shahban Ahmed

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 TABLE OF CONTENTS
S.No. CONTENTS Pg. #

1 Title Page
2 Recommendation For Oral Examination ii
3 Approval Sheet iii
4 Letter Of Acceptance iv
5 Abstract v
6 Acknowledgment vii
7 Dedication viii
8 Table Of Contents ix
9 List Of Tables xi

CHAPTER 1
Problem and its Background 1
10 Introduction 1
11 Theoretical Frame Work 5
12 Statement Of The Problem 6
13 Significance Of The Study 7
14 Limitation Of The Study 8
15 Definition Of Terminology 9

CHAPTER 2
Review of the literature & studies 10
16 Related Literature 10
The Pharmaceutical Industry In Pakistan 10
A Note About Pharma Bureau 15
A Note About OICC&I 18

CHAPTER 3
Research method & procedure 25
17 Research Design 25
18 Respondent Of The Study 25
19 Sources Of Data 25
20 Research Instrument 26
21 Treatment Of Data 27

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S.No. CONTENTS Pg. #

CHAPTER 4
22 Presentation Analysis & Interpretation of Data 28
Major Therapeutic Categories 28
Import & Export 36
Tax Structure 41
Competitive Structure 42
Economic Significance 44
Drugs Distribution 55
Government Regulations 56
Pros & Cons Of The Industry 61

CHAPTER 5
Summary Of Findings, Conclusions & 65
Recommendation
23 Summary Of Findings 65
24 Conclusions 70
25 Recommendations 74

Bibliography 76
Annexures 77

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 LIST OF TABLES
T.No Contents Pg. #

Chapter 2
1 Comparison Of Performance Of Major Players In 14
Pharmaceutical Industry

Chapter 4
2 Sales Of Top 10 Companies 29
3 Demand Of Drugs 31
4 Total Expenditure Of Health 32
5 Projected Demand 33
6 Expenditure On Health By South Asian Countries 34
7 Per Capita Consumption Of Drugs 35
8 Import And Export Of Medical And Pharma Products 37
9 Percentage Share In Total Imports Of Different 38
Medicines
10 Sales And Market Growth Of Top 10 Companies 44

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