Its advantage Pakistan now. From nowhere way back in 1947, the pharma industry in Pakistan is gradually turning into a manufacturing hub for multinational and Indian counterparts. After the partition, the country depended on multinational companies for meeting drug requirements. MNCs often imported drugs to Pakistan from their respective offices in Mumbai, Chennai and Kolkata. This system continued until mid 1950s when MNC's established their presence in Pakistan.
It was about this time that contours of what would be a worthwhile market offering attractive incentives to foreign investment in the healthcare sector began to emerge in the region. Several leading MNCs were induced to establish their manufacturing presence. By mid 1970 local manufacturing subsidiaries of MNCs had consolidated their grip on the market.
Undeterred by the increasing presence of the MNCs, some local business houses, which had gained experiences in selling, promoting and distributing imported products, mainly branded generics also established their manufacturing units in the region. Being more ubiquitous and offering quality product often at substantially lower prices, the local manufacturing segment as a whole succeeded in establishing itself.
The decision taken in 1972 to abolish brand names, restrict availability of essential drugs to 850, fix maximum retail prices across the board and freely allow local manufacturer of all the essential drugs was in fact a life line for the national segment of the industry.
Due to several reasons, especially inaccessibility of new researched medications this policy was ultimately reversed in 1976. Although it was back to square one, the redeeming feature came between 1972 and 1976 when as many as 400 new manufacturing units had been established. Of these, a majority has prospered, so much so that several are ranked amongst the top 10. With this surge, the ratio of market share between MNC and the local's now stands at 52:48.
Given the size of the population and the very little exposure so far in the export market, the domestic installed capacity coupled with that in the pipeline is more than sufficient for the foreseeable future.
Since a fairly large number of the local companies have still not been able to sift realities from the myths of WTO / TRIPS, MNC are hesitating to make further investments in the Pakistan pharma market. Majority of the local companies are still looking for newer, yet patent free, molecules.
Despite the constraints, which are inherent in an industry relying on imported bulk materials and thereby exposed to events out of their reach, the domestic industry, which consists of 650 units, is progressing, gathering strength, venturing outside Pakistan and confident of meeting the possible regional threats likely to prop up in the future.
Inadequate state provided healthcare with a birth rate of 29.74 births/1000, low per capita income, inflation at 8 per cent (2006) and largely agrarian economy retail prices have always been emotive subjects with the pharma industry in the country. The industry can hardly ignore these realities. Neither can the pharma industry in the region continue to sustain and absorb the impact of the increases in the cost of its in-puts within the country as well as the foreign countries from where API's are imported. This struggle is not typical for Pakistan rather endemic as with all the developing countries.
The other issue with serious implications is the likelihood of the removal of the existing restrictions on imports of finished medicines under South Asian Free Trade Area (SAFTA) and most favored nation (MFN) agreements under WTO.
The country's market size has continued to grow at an average rate of 10 per cent, reaching US $ 1.3 billion in 2006. This figure does not include exports nor direct / tender sales results. Inclusion of exports or direct / tender sales will add 15 to 20 per cent to the total revenue sales, taking it to US $ 1.56 billion.
In what can be termed as a major event, in 2000, Pakistan turned its focus on manufacturing of APIs. Relying upon technology mainly from China, the pharmaceutical companies in the region locally manufacture:
#. Paracetamol
#. Aspirin
#. Cephradine
#. Cloxacillin
#. Betamethasone
#. Dexamethasone
#. Ciprofloxacin
#. Parazinamide
#. Cefixime
#. Cephalaxcine
#. Cafadroxil
#. Ampicillin tri hydrate
#. Amoxicilline
#. Cefaclor
#. Cefotaxime Sterile
#. Ceftriaxone Sterile
#. Pseudoephedrine
#. Ephedrine
#. Ibuprofen (Under Evaluation)
#. Sulphamethoxazol (Under Evaluation)
Tariff protection is generally allowed to encourage local manufacture of APIs. Apart, as far as import of finished medicines from India is concerned it is restricted to biologicals, anti cancer, HIV / AIDS, kidney dialysis and transplant. These products are also exempt from the levy of all import duties. However, several national companies are in a race to embark on manufacturing of biologicals. A break through in this field is expected in the very near future.
Today what the Pakistan pharma market is worth is the ultimate result of the valuable contributions from the MNC in the early periods. It was they who helped create a pool of professional and trained cadre in every department of pharma manufacture, be it in designing and equipping the facilities and most important introducing procedures to ensure sustained adherence to the current good manufacturing practice (cGMP) standards.
The industry can't also turn a blind eye to India and China, who provided bulk materials in its incipient stages of development. Apart, Pakistan pharma industry owes to their counterparts in India not only for the bulk materials but also more importantly for the technical support so readily given in formulation technology.
(The author is Managing Director, PharmEvo (Pvt.) Ltd, Karachi, Pakistan)