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Pharmaceutical Industry

Presenters
Mauooz Ul Hassan 11835
Mustafa Tariq(11995)
Saeed Ur Rehman
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Overview
Global market size is approx $770-780bn
with growth of 3-4.
Canada and USA has 47.7% share.
Pakistan's $1.61bn market.

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Importance Of Pharmaceutical Industry

Produces medicines and life saving drugs


Contributes towards GDP (0.16%)
Generates employment (70,000 directly and
150,000indirectly)
Supports Health facilities
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Factor Conditions
Raw material: Most of the raw materials
are imported from China, India, Germany,
U.K and Netherlands.
Machinery: Pharmaceutical industry is a
capital-intensive industry by nature. The
process of manufacturing and packaging
are both done using machines. Most of
the machinery is imported from China and
India.
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Labour
Skilled workers are used for formulation
and manufacturing of drugs.
Unskilled workers for packaging, labeling
and transport. Thus, the industry directly
and indirectly employs around 4 million
people. Labour is relatively cheap in
Pakistan and therefore a small proportion
of the cost.
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Firm Strategy, Structure, and


Rivalry
There are about 600 pharmaceutical
companies in Pakistan out of which 25 are
Multinational Companies (MNC) and those
MNCs have about 45% of the market
share.

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The Top 10
Pharmaceutical
Companies nearly has
50% of the market share
as shown in the diagram.
Multinational companies
are involved in higher
technology drugs as
compared to local firms
which produce generics

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Rivalry
A large number of the population i.e. about
28% of the population out of which 70%
are from the rural areas prefer
homeopathic medicine over allopathic
medicine,

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Pricing structure
Drug Regulatory Authority (DRA)
Increase in any prices by the companies is
needed to be approved by the
government.

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The price review committee for the determination of retail price.


For a drug already on the market:
- Need of the product
- Import price
- Product registration price in other countries
- Prevailing price in neighboring countries
- Price demanded by the applicant and justification thereof
- New molecules - available internationally
Other concerns
- Cost of raw materials
- Demand of the product
- Analyzing competitors
- Marketing concessions

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Demand Condition

Private spending accounts for 65% of total healthcare expenditure.

Pharmaceutical spending accounts for less than 1% of the country's


GDP.

Pakistan meets 80% of its domestic demand of medicines from local


production and 20% through imports.

The pharmaceuticals market size is Rs. 70 Billion.

The market for pharmaceuticals in Pakistan has been expanding at


a rate of around 10 to15% since last few years.

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Demand Condition
Major Players In Industry
Names

Market Share

GSK

11.49%

ABBOTT

6.25%

PFIZER INC

4.83%

NOVARTIS

4.73%

GETZ PHARMA

4.35%

SANOFI-AVENTIS PAK

4.20%

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Demand Condition

Pakistan is also exporting its surplus drugs to a large number of


countries.

The share of pharmaceutical industry in exports has been reached


to 4.04% that was 3.28% in 2008.

Pakistan imports nearly 95%of the basic raw-material.

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Driving Forces

The demand for ethical pharmaceutical companies is determined by


demographic and socioeconomics factors, such as age of the
population, diet, or access to health care.

Government policies and programs such as cost containment,


degree of health-care financing, and support for health-related
education may also affect the demand for drugs, directly or
indirectly.

Population density, life expectancy, birth rate, death rate and


composition also drive demand for medicines.

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Government And Chance

Government has setup an independent drug registration and pricing


authority.

Biotechnology plant worth Rs400 million.

Some major public sectors programs have been initiated.

a)
b)
c)
d)

National Tuberculosis Control Program


National Malaria Control Program
National HIV/AIDS control Program
Womens Health Program

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Government And Chance

The public sector health development expenditure has increased


from Rs.4.3BN to Rs.9.5BN.

The government has also formed a policy recently allowing


companies to produce raw-materials locally.

Diseases, flood, earthquake are the factors which create a chance


for pharmaceutical industry.

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Related and supporting


Industries
Biotechnology
Simple molecules are found through trial
and error to treat the symptoms of a
disease or illness.
It offers promise in enhancing existing
technologies in the pharmaceutical industry.
The field shows immense importance.
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Engineering Industry
The local demand is not currently fulfilled by
our engineering sector.
All of the critical equipment and machineries
are imported from abroad such as China,
Italy, Germany and India.
These machineries includes Tablet coating
machines, Capsule Manufacturing Machines
and Tablet compression machines
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Chemical Industry
It provides basic raw materials whereas
more than 90 percent of the raw material
are imported.
Lack of interest and involvement on part of
the government.
No major steps taken to increase the
exploration of required chemicals.

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Packaging Industry
It consist of a vast range of devices used
for forming, filling, wrapping, sealing,
cleaning and packaging products.
Medicines in bulk form are sent for desired
packaging on purpose built machines.
The machines are not designed for quick
changeover and flexibility.

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Printing Industry
The printing machines are used for printing
prices, manufacturing and expiry dates and such
different labels of the products.
The pharmaceutical and other multi-national
companies working in Pakistan are fully satisfied
with the quality of services, the paper and the
printing industry is providing to them
Our printing industry has respectable place

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Hospitals and Pharmacies


They are basically the direct buyers if
pharmaceutical products.
They also plays an important role in
promoting and selling fake and expired
medicines.
There are many disorganized and
uncategorized pharmacies across the
nation.
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