The Indian pharmaceutical industry is anticipating a 20 to 25 per cent ($200 to 250 million) share in the Pakistani pharma market by 2010 with the recent improvement in the Indo-Pak relations. To achieve this, the Indian government has to offer a few concessions for traders across the border, without anticipating any reciprocal gesture from Pakistan. India already has given a Most Favoured Nation (MFN) status to Pakistan in trade, which is yet to be reciprocated by Pakistan.
The current pharma market in Pakistan, including institutional tenders business is estimated at $1 billion and is growing at a higher rate than most other markets. Forty per cent of the requirement comes from abroad via imports. Around 40 per cent of the pharmaceutical market share in Pakistan is held by MNCs, of which top five (listed) companies command 33 per cent, according to a study conducted by a Pakistan-based brokerage outfit Capital One Equities Limited.
The first and foremost necessity is to put the names of pharmaceuticals and machinery items in India's trading list to Pakistan, said Indian industry officials. "Visa restrictions have to be seriously relaxed. If an Indian company is willing to guarantee the stay of a Pakistani guest then why cannot Indian authorities issue visas as and when needed, without much scrutiny?" questioned Ajit Singh, chairman, Associated Capsules and vice president, OPPI. Besides, India considering its rich forex reserves should set aside credit of $20-30 million, which will be helpful for enhancing trade and mutual trust, maintained Singh.
By legalizing pharma trade with India, Pakistani government could also cash in on lower import duties in India. Already over 200 Pakistani traders have shown interest in associating with India, said Singh.
The disease profile in Pakistan being almost the same, all pharma products manufactured in India will find a good market in that country. On account of the prevailing tensions between the two countries, the pharmaceutical trade is meager. Making guesses, the industry puts the current Indo-Pak pharma trade at about $30-40 million. Mostly bulk actives, bulk drugs and OTC formulations are traded with Pakistan. Whatever trade existed used to be routed via Dubai, Singapore and Germany. The border districts of India indulge in illegal trade with the neighboring districts across the border, said DG Shah, secretary general, IPA.
Most of the bulk drugs required in Pakistan are imported from China, formulations from Europe and pharmaceutical machinery from Europe and China. India will be able to offer Pakistan less expensive and at the same time high quality, pharmaceuticals and machinery with guaranteed after sales service, assured Singh.
Being more MNC dependent, Pakistan is more IPR compliant compared to India, although Pakistan would become WTO compliant only by 2015. However, considering the high prices of generic drugs in Pakistan compared to India, this is the sector to watch for the Indian companies. Also, there is enough scope for tie-ups with local Pakistani companies, said DG Shah. "If compulsory licensing is allowed, then Indian companies could look towards exporting life-saving patented drugs at cheaper rates to Pak markets," said Ajit Singh.