By Hashim Zia Jafri
Apr 03 - 09, 2000
Pharmaceutical industry of Pakistan is amongst one of the most
organized and scientifically managed industry of Pakistan. Comprising of over 250
manufacturers, 40000 registered chemists, 6000 wholesalers and distributors and around
1500 importers. The sales turnover is $718.00 million in 1997. Multinational
Pharmaceutical Companies (M N P C) are 23 in number and still enjoys 60 per cent market
These M N P C's have been instrumental in motivating local entrepreneur
to invest in the pharma business and have been a source of providing resources like
personal, skills, expertise etc. Maybe this is one of the reason due to which National
Pharmaceutical Companies (N P C) have emerged in so many number in recent past and gained
a sizable market share within a span of 5 years i.e. 40 per cent in 1999 compared to 28
per cent in 1994.
It is surprising to note that we are spending 2 per cent of our G N P
on health which is much less then WHO recommendation of 7 per centbut around 22,000
registered medicines are available in Pakistan which is much higher than in many developed
countries. Looking at year 2000, we believe that this year will be a bumpy road for Pharma
industry as the industry will be seeing a lot of ups and downs lets talk of downs first.
Pharma executive's traditional attitude towards business.
Further strengthing of drug wholesaler / retailers association.
Little chances of new arrival or expansion of existing
Risk of downsizing of M N P C's to scientific offices.
Continuation of strict price control on medicines.
Increased risk of smuggling of medicines from neighbouring
countries into Pakistan.
Further devaluation of Pak rupee against dollar.
Possibility of new taxes / duties levied on pharma industry.
Increase in cost of packaging material and other overheads.
Pharma executives believe and maintain huge sales volume and market
share. The future lies in the high value low volume products. There is a possibility of
strong unionist attitude of drug wholesalers and retailers in future and they may work as
a pressure group and would not allow price decontrol by government.
Irrational price control can lead to downsizing of some of M N P C's
who have rented premises and no manufacturing plants in Pakistan as well as it will be of
little attraction to M N P C's to invest or expand their operation in Pakistan due to
strict price control, dollar-rupee fluctuation and possibility of new taxes or duties.
There is a possibility that few of the M N P C may retain their presence in form of
scientific office. Now lets take a look at the opportunities which are awaiting for us in
Patent protected and Hi-tech products.
High price, low volume products.
New or innovative / unique products and molecules.
Export of medicines
The first opportunity would be for those companies which will have
their molecules / products patent protected. Thus they will be in comfortable and secure
position. At the same time those companies who will come up with hi-tech products will
also be having a differential advantage. Which means either the competition will be unable
to replicate the drugs or it will be forced not to do so.
The second opportunity is that those companies which will focus on
profits and not only on market shares will be giving better yield against costs. An
example can be Oncology which is a relatively small market in terms of focusing of doctors
and patients who go to specific hospitals / wards for their treatment. The drugs available
are less in comparison to many other therapeutic groups but are of higher price. The third
opportunity is that if a company comes with a new and innovative solution to a problem
they can establish themselves in a niche. Like recently a new nasal spray is being
marketed which cures cold and flu just in one puff.
Hence such a product can not be marketed to masses but to a class of
patients who are busy and wants to recover fast.
The forth opportunity is for those companies who go for exports of
medicines hence they will be not only utilizing their excess capacity but also be earning
foreign exchange. So, it is high time for us to prepare to meet the challenges of year