PAKISTAN PHARMA

IDUSTRY.

IOBM PAKISTAN
 AGENDA

IMPORTANCE
HISTORY
ROLE OF GOVT
IMPACT OF WTO
CURRENT SITUATION
PROBLEM AND ISSUES
REMEDIES
CONCLUSIONS
FUTURE
 Pharmaceuticals

• Pharmaceuticals are substances that are

aimed to treat, cure, prevent, or recognize
diseases and relieve pains through their
applications.
 IMPORTANCE : GLOBAL VS PAKISTAN

• Global market size is approx $770-780

bn with low growth of 3-4% in 2009
(http://www.economywatch.com/sector-watch/us-pharmaceuticals.html)
.

• Canada and USA has 47.7% share.

• Pakistan's $1.61bn market (pharmaceutical(Research
and Markets: Pakistan Pharmaceuticals and Healthcare Report Q2 2010)

Importance Global
vs pakistan
Importance Global
vs pakistan
 Major Players in PAKISTAN

Names Market Share

GSK : RS 703.4 crore (6 months 2009)

(http://www.gsk.com.pk/downloads/qtr2_report2
009.pdf) 11.60%

Sanofi Aventis: RS 519 crore 9 months 2009)

(www.sanofi-aventis.com.pk 4.10%

Getz Pharma 3.90%

Abbott Lab 3.80%

Roche 3.10%

Merck 2.90%
Importance Global
vs pakistan
 Updated till 2003
http://www.dcomoh.gov.pk/pharma/multinational.php

• There are currently over 400 pharmaceutical manufacturing units registered in

Pakistan.

Out Of 316 Units;

90%-------------local pharmaceutical units.
10%-------------multinational owned.

Local Units-----------------------386
Multinational Units------------30

Importance Global
vs pakistan
 Importance Of Pharmaceutical Industry

• Produces medicines and life saving drugs

• Contributes towards GDP (0.16%)

• Generates employment (70,000 directly and 150,000

indirectly)

• Supports Health facilities

Importance Global
vs pakistan
Why we chose this industry : It’s a secondary industry and
difficult to set up than the rest

Difficult to
setup
HOW IT ALL WORKS

Difficult to
setup
 AGENDA

IMPORTANCE
HISTORY
ROLE OF GOVT
IMPACT OF WTO
CURRENT SITUATION
PROBLEM AND ISSUES
REMEDIES
CONCLUSIONS
FUTURE
 Historical Background
http://www.pharmaceutical-drug-manufacturers.com

Growth Indicators (Rs. crores)

  1965-66 1999-00
Capital Investment 140 2,500
Production:
  Formulations 150 15,960
  Bulk Drugs 18 3,777

Import 8.20 3,441

Export 3.05 6,631
R&D Expenditure 3 320

HISTORY
 Historical Background
http://www.pharmabiz.com/article/detnews.asp?articleid=28358&sectionid=50

• At the time of independence there were two small units which

were unable to meet the local demand.

• The rest of the medicines were imported.

• 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.

HISTORY
 Historical background
http://www.pharmabiz.com/article/detnews.asp?articleid=28358&sectionid=50

• Since 1999 the government has invested US$ 133 million in

the pharmaceutical industry.

• The last 10 years have been eventful for Pakistan

pharmaceutical industry as they have developed a large
number of domestic manufacturers.

• In 2006 there were over 400 licensed pharmaceutical

companies in Pakistan, including 30 multinationals who had
over 53 percent of market share.

• Today, the industry has developed technology, production and

an infrastructure of imports. It's a well regulated industry. It
has Domestic companies which are quite confident of doing
good business.

HISTORY
 AGENDA

IMPORTANCE
HISTORY
ROLE OF GOVT
IMPACT OF WTO
CURRENT SITUATION
PROBLEM AND ISSUES
REMEDIES
CONCLUSIONS
FUTURE
 Role of Government
http://www.shvoong.com/medicine-and-health/1810555-importance-pharmaceutical-industry/

• The government has set up an independent Drug Registration and Pricing

Authority. In Pakistan the Ministry of Industries decides about the drug
pricing.

• In the biotechnology sector, Pakistan has initiated many programs. It is

planning to set up biotechnology plant worth Rs.400 million to meet the
growing needs of quality medicines in the country.

FACT : Healthcare spending in Pakistan In 2009 is

Role of
PKR226.5bn Government
 Role of Government
http://www.shvoong.com/medicine-and-health/1810555-importance-pharmaceutical-industry/

• While substantial increases in public sector spending have

been witnessed in recent years.

• Some major public sector programs have been initiated to

address the healthcare needs of the population. These include:
– The National Program for Family Planning and Primary Health Care
– The Expanded Immunization Program
– National Program for Hepatitis Prevention and Control
– National Tuberculosis Control Program
– National Malaria control Program
– National HIV/AIDS Control Program
– Women's Health Program.

FACT : only 0.7% of the GDP has been allocated for the health
Role of
sector in 2009 Government
 Role of Government
http://www.shvoong.com/medicine-and-health/1810555-importance-pharmaceutical-industry

• The public sector health development expenditure increased

from PKR 4.3 billion in 2003-04 to Rs.6 billion in 2004-2005,
and Rs.9.5 billion in 2005-06.

• Ministry of Commerce has given 50% subsidy to

pharmaceutical companies for registration of their exported
products in foreign countries for export from 1998 to 2003

 The government has also formed a policy recently allowing

companies to produce raw materials locally. Companies in
Pakistan rely heavily on China, India, Germany, UK and Japan
for raw material imports.

Role of
Government
 AGENDA

IMPORTANCE
HISTORY
ROLE OF GOVT
IMPACT OF WTO
CURRENT SITUATION
PROBLEM AND ISSUES
REMEDIES
CONCLUSIONS
FUTURE
 Impact of WTO (from 2005)
• Patents
To comply with WTO standards the product should be
patented

• Prices
Increased competition lowers the price which would result
in low profitability for local manufactures.

Due to product patents rights new drugs could be

unavailable or unaffordable.

• Competition
When there would be equal opportunity for other nations
to trade their Pharmaceutical products in Pakistan. The
competition in the local industry would rise. (India alone
can attain 25% of the Pakistani Pharmaceutical market).
WTO IMPACT
 Impact of WTO
• Development of Health Sector

• Harmonization of standards
Globally recognized standards will become the benchmark
of the Pakistani Pharmaceutical Industry, which would
require intensive capital expenditure.

• TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement

The TRIPS agreement will push Pakistani companies out of
the competition in the new high value generating products.
Where Pakistani industry which is a generic manufacturing
industry would not be able to bring generic copies of new
products for at least ten years.

WTO IMPACT
 AGENDA

IMPORTANCE
HISTORY
ROLE OF GOVT
IMPACT OF WTO
CURRENT SITUATION
PROBLEM AND ISSUES 2010
REMEDIES 2010
CONCLUSIONS
FUTURE
 2010 EXPORTS

IMPORTS Nearly 95% ( Approx $ 450 million) of the basic

raw material used for manufacturing is imported from CURRENT
countries like China, India, Japan, UK, Germany and others. SITUATION
 Health Policy 2010
Ministry Of Health And Government
Monday, March 22, 2010
Sania Nishtar

• The Ministry of Health along with Government of Pakistan is

working on health policy 2010 for planned enhancements in
overall health sector by the way of promoting and upgrading
healthcare facilities at all tiers.

• Main Features Of The policy are;

1. to improve effective access to healthcare

2. Reduction in communicable diseases
3. Good governance at both directorate and agency level

CURRENT
SITUATION
 AGENDA

IMPORTANCE
HISTORY
ROLE OF GOVT
IMPACT OF WTO
CURRENT SITUATION
PROBLEM AND ISSUES
2010
REMEDIES 2010
CONCLUSIONS
FUTURE
 2010 problems
Pakistan Pharmaceuticals & Healthcare Report Q2 2010" Published

• rupee has depreciated against the US dollar

• GDP projections have been downgraded,
• inflation has increased and
• fiscal expenditure has contracted. volatile political and security
situation.
• low per-capita spend on pharmaceuticals
• year compound annual growth rate of 8.95%, down from 9.39%
forecast in the previous quarter
• Pakistan's ambition to become a significant exporter of pharmaceuticals
came under threat in September 2009, after a Ugandan drugmaker
sued a Pakistani pharmaceutical manufacturer for supplying
substandard goods

2010 scenario
 PRICE ISSUES 2010
Research and Markets: Pakistan Pharmaceuticals and Healthcare Report Q2 2010

• Both generic drugs and patented products are subject to

price controls. The maximum retail price (MRP) of a
medicine is determined using a formula that incorporates
manufacturing costs and retail markups. When pricing
imported medicines, the cost of freight is also included

2010 scenario
 AGENDA

IMPORTANCE
HISTORY
ROLE OF GOVT
IMPACT OF WTO
CURRENT SITUATION
PROBLEM AND ISSUES
2010
REMEDIES 2010
CONCLUSIONS
FUTURE
 REMEDIES AND IMPROVMENTS 2010
Pakistan Pharmaceuticals & Healthcare Report Q2 2010" Published

• health insurance scheme similar to India's insurance scheme for the

poor.

• attract foreign patients to the country, encourage the private sector

to administer advanced treatments

• healthcare in Pakistan will drive the overall tourism market,

resulting in increased national wealth

• November 2009, when the Aga Khan Agency for Microfinance

(AKAM) established a healthcare insurance service in Pakistan. The
First Microinsurance Agency

CURRENT
SITUATION
 AGENDA

IMPORTANCE
HISTORY
ROLE OF GOVT
IMPACT OF WTO
CURRENT SITUATION
PROBLEM AND ISSUES
2010
REMEDIES 2010
CONCLUSIONS
FUTURE
 Conclusion(EXTERNAL)
• After implementation of WTO regime since Jan 1 st 2005, The WTO regime
may fortify the monopolies of MNCs and make the access of medicines
difficult to the poor patients;

• governments can tackle such problems by using compulsory licensing and

parallel import.

• Industry needs strong point of “low priced medicines” and on the other hand
it could draw more technology, research & development and foreign direct
investment by providing better protection to the patents.

• Industry should go for unusual options such as foreign joint ventures,

contract manufacturing and approach towards acquisition of compulsory
licensing of patented
 Recommendations (INTERNAL)
http://www.issuesinmedicalethics.org/pdfs/NBC2005SH.pdf
Dr Sara Hussain fron Agha kahn

• Existing evidence indicates a need to equip physicians-in-training

to handle interactions with the industry.

• The need to introduce early and ongoing trainings in ethical

concepts, moral reasoning and development of skills necessary to
address these issues.

• Registering and regulating authorities in Pakistan have must ensure

inclusion of the existing Code of Ethics in undergraduate and
postgraduate curricula and should regulate industry collaboration
with teaching institutes; developments that are necessary to raise
the standard of clinical practice and improve patient welfare.
 AGENDA
IMPORTANCE
HISTORY
ROLE OF GOVT
IMPACT OF WTO
CURRENT SITUATION
PROBLEM AND ISSUES
2010
REMEDIES 2010
CONCLUSIONS
FUTURE
 FUTURE
• Healthcare spending in Pakistan is expected to
increase from PKR226.5bn (US$2.76bn) in
2009 to PKR257bn (US$2.86bn) in 2010-
2011 ttp://southasia.oneworld.net/todaysheadlines/lesser-allocations-for-health-and-education-in-pakistans-budge

• pharmaceutical market value PKR206.9bn

(US$2.3bn) in 2014 ((Pakistan
((Pakistan Pharmaceuticals
Pharmaceuticals &
& Healthcare
Healthcare Report
Report Q2
Q2 2010"
2010" Published)
Published)