The pharmaceutical manufacturing industry in Pakistan fear at least 60 per cent of the domestic manufacturers would be wiped out in two to three years with India and China likely to dominate the Pakistan pharma market.

Industry sources from Pakistan point out inability of Pakistan pharma industry to set up adequate infrastructure and create an environment conducive for competing in the global markets over the years, anticipating the new patent regime, as the main reason for this emerging crisis. The USD 1 billion Pak pharma market, which is dominated at present by 22 multinationals that control 51% of the market, has high growth potential. However, the industry lacks adequate support from the authorities and lacks financial muscle to compete in international markets. Unlike most other countries, drug prices are fully controlled by the government in Pakistan, which is a major set back for the local manufacturers.

The Pakistan government last month allowed to import vaccines, drugs for thalessemia, HIV and hepatitis from India, which threw open a big market for the Indian manufacturers. At present there are about 300 drug importers in Pakistan. Further, the Pakistan commerce ministry and other related authorities are seriously planning to allow more liberal imports of finished drugs from India, considering the improved relations between the two countries and the spiralling cost of medicines in Pakistan. Once Pakistan allows a liberalised environment for drug sales in the domestic market, Indian and Chinese companies would flood the market, killing the domestic industry, fear sources.

Raw material and production costs are increasing day by day and drug manufacturing has become an unviable business in the country. Pakistan is heavily dependent on India for raw material sourcing, as the country is yet to set up a raw material manufacturing base. The industry prefers India as the main sourcing destination than China, mainly because communication and language with their Indian counterparts is not an issue. More than that, India offers quality products than the cheap Chinese suppliers.

Pakistan is also a signatory to WTO and in the emerging patent regime. Pakistan industry fears that many of them would have to face litigations from multinationals. Development of original molecules has not been in the agenda of most of the local manufacturers, so far. Compounding the problems, the Preliminary Intellectual Property Rights Organisation (PIPRO), set up to safeguard the interests of Pakistan industry, lacks adequate teeth. Unlike India, Pakistan is yet to strengthen its patent offices and the administration network in tune with global standards.

The Pakistan pharma industry also finds it difficult to source world class professionals and pharmacists as the country lacks adequate quality educational institutions for the pharma industry. Similarly, a good percentage of the employees lack quality English education and this is a major barrier in exploring overseas markets and in getting overseas regulatory approvals, said sources.