Notwithstanding the impact of slowing markets in global capitals, the pharma industries in many of the developing world show clear signs of prosperity. Pharma markets in South Asian countries are no exception to this. Pakistan, Nepal and Sri Lanka have in fact come a long way in achieving self-sufficiency in the past few years, thanks to the pro-industry regulatory initiatives in these countries.
Pakistan
If the performance of pharmaceutical industry in Pakistan in 2007 is any indication, this booming sector is all set to make a mark in the global market in the near future. The Pakistan's pharmaceutical industry was a flourishing sector in the last year reporting sales of US $1.4 billion. Also, the country's pharma industry succeeded in contributing substantially to the country's economy, apart from providing quality medicines at affordable prices to its vast population.
If we are to believe the recent estimates, Pakistan's medicine export is expected to exceed US $2.3 billion in 2012. However, the country needs much more to propel its pharma industry in the international market.
Referring to the strides that the country's pharma industry is making, Prime Minister Syed Yousuf Raza Gilani, said: "It has shown progressive trends as compared to multinational industries. To further boost its spirits, the government would establish a joint commission comprising the ministry of health and the industry stakeholder to implement the Pharma Vision 2020. The recommendations of this joint committee will help in achieving the goal of improving healthcare system of Pakistan, by providing quality medicines at affordable prices."
Although Pakistan's pharmaceutical and healthcare sectors are expanding and evolving rapidly, about half the population has no access to modern medicines. Clearly this presents an opportunity for the Indian counterparts.
Demonstrating ongoing commitment to improving the health of its people, Pakistan is expected to install its first disease monitoring system soon. Besides, due to erosion of margins, pharmaceutical companies recently called on Pakistan's government to allow them to increase the price of medicines. The firms said that the price of drugs had remained stable for the last five years, while the cost of production has risen by one-fifth over the same period.
During early 2008, rotating energy blackouts were limiting pharmaceutical production to domestic consumption and the ongoing political turmoil was putting off global buyers.
Nepal
There are 40 pharmaceutical companies in Nepal at present. Recently, the size of the pharmaceutical market has crossed Rs 10 billion. This sector has made a huge leap forward over the period of the last two decades, but it still depend on imports to fulfil more than 60 per cent of the total national drug requirement. Investments in the pharmaceutical industry have swelled to around Rs 5 billion. The overall market for pharmaceutical products is growing by around 13 per cent annually. However, competition among the producers is very intense, and that has depressed the rate of return for the companies.
Some of the industry players feel that the Nepalese government's Drug Act has become obsolete. "It should be amended as per the changing situation in order to encourage Nepali pharmaceutical producers. The government should provide different incentives like tax exemptions and other rebates to indigenous producers," they noted.
"The government should learn from the success of Bangladesh, which has emerged as one of the leading exporters of pharmaceutical products by expanding its market to more than 92 countries. We can also reach international markets like Bangladesh has done, but developing this sector does not figure in our government's list of priorities. The government should establish a Special Economic Zone for the pharmaceutical sector and provide electricity and water at concessionary rates," Umesh Lal Shrestha, managing director, Quest Pharmaceutical, one of the leading drug producing companies in Nepal, was quoted as saying in an interview recently.
He said that Nepal can export pharmaceutical products to the international market, thanks to low labour cost and the customs duty imposed on raw materials. "These factors place us in an advantageous position. There are 100 countries in the world that do not manufacture any medicinal drugs. That market represents a huge potential for our industry to tap. Of course, we need modern technology and skilled manpower to increase our competitiveness in the international market. But with the right mix of policy support and investment and technology, we can overcome this constraint. If we realign our focus and garner state priority, Nepal has ample scope to export medicines," he noted.
Sri Lanka
Currently estimated to worth approximately Rs.12 billion, Sri Lanka's pharmaceutical sector has shown a 17.3% growth in recent years. The total pharmaceutical market accounts for a per capita consumption of medicines worth Rs.600 per year.
State Pharmaceutical Manufacturing Corporation (SPMC), with a market share of about 30%, is the main supplier of medicinal needs to the entire government health sector. Other major players are the local private sector manufactures, dealers and country agents of the multinational pharmaceutical companies. Their contribution to local manufacturing is rather limited and their core business is confined to importing and distributing of drugs all over the country. The SPC and the other private sector importers purchase drugs mainly from Bangladesh, India and Pakistan.
Hemas, Glaxo, Astron, Proctor and Gamble, Unilever, Mackwoods, Harcourts, Citihealth, Gamma pharmaceuticals are the reputed private sector dealers operating in the Pharmaceutical industry.
However, Sri Lanka, Nepal and Pakistan still depend on other countries, especially India to meet a lion's share of their medicinal needs. Right from the inception of the pharma industry in these countries, India with its advantage as the neighbouring country has been a major exporter of drugs to these countries. Be it basic raw materials, active pharmaceutical ingredients, skilled manpower and narcotics or psychotropic drugs for the pharma industry in these regions, India was always there in the forefront to meet the requirements.
As per the figures available, Sri Lanka is the leading importer of Indian pharmaceutical products with a share of 27 per cent followed by Nepal (25 per cent) and Pakistan (22 per cent). "In 2006-07 Sri Lanka was the 18th largest importer with a value share of 1.6 per cent of the country's exports followed by Nepal (28th) and Pakistan (29th) with value shares of 1 per cent," pointed out sources within Pharmexcil.
"India's pharmaceutical exports to South Asia stood at Rs.1,199.10 crore during 2007-08. The exports of drugs, pharmaceuticals and fine chemicals showed a compounded annual growth rate of 12 per cent during 2002-03 to 2007-08. India has negligible imports from its South Asian counterparts with major source countries being Nepal and Sri Lanka," the sources added.
Noted Indian companies like Cipla Limited, Ranbaxy Laboratories Limited, Wockhardt Limited, Aventis Pharma Ltd, Reliance Formulation Pvt. Ltd, Nicholas Piramal India Ltd. (Piramal Healthcare), Torrent Pharmaceuticals Ltd., Wyeth Limited, Biocon Pvt Ltd and Intas Pharmaceuticals Pvt Ltd are present in these regions in one way or other with their rosy basket of products.