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Pharma companies: If proposals accepted,

industry will rise rapidly
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Pharma companies: If proposals

accepted, industry will rise rapidly
By Shahram Haq
Published: February 7, 2015

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Pakistan is manufacturing 80% of the countrys medicine requirements, out of which multinationals account for 44%. STOCK
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LAHORE: The dispute over the drug pricing policy, which currently
is the biggest concern for pharmaceutical companies, might get
settled either way in coming weeks due to the mounting pressure

from the stakeholders, but will the industry recover from the
damages suffered over the past decade is a big question.

The pharmaceutical sector claims that prices of finished goods

in Pakistan are the lowest in the region and the sector is the
second largest contributor to the national exchequer following
textiles. Like others, its potential for growth is huge and
unrealised.

If the government finalises the policy as per the stakeholders

recommendations, then the pharmaceutical industry could
easily grow five-fold from its current size in the next five
years, said Pharma Bureau Chairman and Chief Executive
Officer Novartis Pakistan Shahab Rizvi.
The pharmaceutical industrys current size is $2.3 billion with
around 600 registered companies. According to industry
experts, it could easily cross $10 billion with increased exports,
which currently stand around $20 million.
Quoting the example of India, Rizvi said that the size of Indian
pharma industry currently stands at $21 billion and is expected
to cross $45 billion by 2020.

This primarily is due to industry encouragement by the Indian

government in terms of a favourable policy. In Pakistan, only a
conducive regulatory environment aligned with global
practices would stimulate industry growth and its tremendous
export potential, said Abbott Pakistan Managing Director
Arshad Saeed Husain.

Pakistan is manufacturing 80% of the countrys medicine

requirements, out of which multinationals account for 44%.
Yet, they claim that there is an unreasonable regulatory
environment for doing pharma business, as the Drug
Regulatory Authority of Pakistan (Drap) has placed no
emphasis on quality and is focusing only on price control. Drap
lacks the capacity to enforce quality standards, they say.
Husain said that there are only 14 drug inspectors in Pakistan
to monitor over 600 manufacturing facilities. How they can
ensure the quality of drugs, he asked.
The main concern of the pharma sector is the frozen prices
since 2001, in exceptional cases a few commercially unviable
products received a nominal price adjustment, and this has
affected the profitability of the companies.

The pharma industrys profitability is as low as 2% as

compared to approximately 70% for the tobacco industry,
Rizvi said. This is the reason why some multinationals left the
country and if the situation persists more will follow suit as
multinationals spend heavily on research and development of
new drugs, he added.
Industry experts said that the current draft of the drug pricing
policy may discourage investments into quality manufacturing,
which envisages a rollback of 15% interim relief granted 12
years ago at 1.25% per year, and a further price cut of 30%,
against the governments calculation of 94% price increase.
The experts said that the industry is not demanding any
financial support, but if the pricing policy does not favour the
industry then no new medicine will be introduced in the
country.
In recent years, no multinational has introduced new researchbased medicines which their parent companies have
introduced globally, he added.
Published in The Express Tribune, February 7 th, 2015.
Ref(http://tribune.com.pk/story/834201/pharma-companies-if-proposals-acceptedindustry-will-rise-rapidly/)