After the independence, our pharmaceutical needs were
fulfilled mainly by the imported drugs. Initially some multinationals
and later on some national companies started their business in Pakistan.
Currently there are over 400 pharmaceutical companies carrying out
business in Pakistan. The number of local pharmaceutical companies and
their market shares has increased more than that of multinationals. The
number of multinationals companies has decreased over the passage of
time due to mega mergers but they are still in a strong position to hold
the sufficient market share and control the supply of many vital
medicines. Local pharmaceutical industry had not yet completely sprouted
its wings when it came across the threatening of WTO regime.
The threats for the local pharmaceutical industry are
due to free trade, extension of patent period and implementation of
TRIPS (Trade Related Aspects of Intellectual Property Rights)
regulations of WTO. In addition lack of research and development,
decreased productivity, high manufacturing cost and poor quality of
medicines can make the situation worse.
The first threat for the Pakistani pharmaceutical
sector in the post WTO regime is the free trade. New WTO regime will
bring an influx of low priced products from the other countries
especially India, China, Indonesia and Malaysia. These low priced
products will fill our markets and give a tough time to their local
competitors and many of the later will be wiped out from competition. On
one hand the imports will increase and on the other hand exports will
decrease since the competition will be based mainly on the good quality
and low prices. Further more Pakistani exporters will be required to
produce to their customers the documented evidence of following good
quality management system (ISO-9000), a proof of being environment
friendly (ISO-14000) and following Good manufacturing practice (GMP),
Good storage practice (GSP) and Good laboratory practice (GLP). An
increase in import and decrease in export could produce a distortion in
trade balance. At its worst the new scenario could be catastrophic.
In the last few years many of the large
multinationals companies have undergone mergers. Glaxo and SmithKline
merged to form Glaxo SmithKline, Pfizer joined Upjohn, Ciba Geigy and
Sandoze merged to form Novartis, Wyeth and Lederle merged with each
other. The local pharmaceutical industry feels quite desolated in these
mega merger scenarios. Also these mega mergers have resulted in the
business giants that have deep pockets and can easily withstand any
shock as against the local companies where a single shock affects the
whole of business.
Another threat for the local pharmaceutical industry
is the new TRIPS regulations of WTO. The nutshell of these TRIPS
regulations is that the actual value of new medicines and many high
technology products lies in the amount of innovations, inventions,
research and design involved in their preparation. Creators must be
given the right to prevent others from using their inventions, design
etc. These rights are known as TRIPS and they may take the form of
copyrights (as in case of books), patent (as in case of new medicines or
other high tech. products) and trademarks (for brands and logos). In
pharmaceutical sector threat is from patent period which has been
extended to at least 20 years. In the post WTO regime the patent laws
will be followed more strictly.
The patent malpractices are more severe in China and
India. This is due to better coordination between pharmaceutical
manufacturers and government regulatory agencies of the respective
countries. But this not a matter to worry about, such subversive
practices can not be carried out over longer period of time. However in
Pakistan, like other countries of the world, a better coordination
between government and pharmaceutical industry is needed to resolve the
ever conflicting issues of price fixation, high tariffs on the import of
raw materials and other tax rates.
Secondly Ministry of Health should have a friendly
yet professional approach towards pharmaceutical manufacturers. It must
not be merely a watch dog having the job description of finding
contraventions of drug act or the violations of Good Manufacturing
Practice (GMP), rather it should adopt the role of an advisory committee
and counseling body determined to improve the quality standards and the
uplift of pharmaceutical industry for provision of better and economic
health care, the ultimate benefit of which will go to the poor masses.
The most important impact of extension of patent is
that multinationals that hold patent rights for the majority of
medicines, will enjoy this monopoly for an extended period of time and
local companies will manufacture only those medicines whose patent
periods have expired or otherwise wait for the expiry of patent. The
consequence will be that multinationals will be in a strong position to
control the supply of many important medicines in the market which could
precipitate the problems beyond the imaginations.
Although Pakistani pharmaceutical industry is raising
voices at different forums for various exemptions regarding patent rules
relaxation, but this is not the long lasting solution to the problem.
This is the type of problem which can not be solved by pharmaceutical
industry alone, rather government should come ahead to bring
pharmaceutical industry out of deep waters. Government must provide
sufficient financial aid or incentive to the companies going for
ISO-9000 certification, environmental standards certification and labor
standards compliance certification since going for any one or more of
these certifications is a costly process and requires hundreds of
thousands of rupees.
Our local pharmaceutical companies have not reached
yet that level of good quality and expertise where they could compete
multinationals. In fact quest for quality is more a matter of mentality
and commitment of top management than anything else. A commitment for
improvement in the quality and a change in organizational culture is the
need of time. Local companies have to change from the "Saith
culture" to the "Corporate culture" for a better work
environment and effective combat of WTO challenges. Local pharmaceutical
manufacturers are working with old outdated machinery and unskilled
workforce leading to low productivity, high manufacturing cost and poor
quality of products. Government should facilitate the transfer of
technology from developed countries to Pakistan. Facilitating transfer
of technology is the best role which government can play in this regard.
Currently our educational institutes are teaching
only theoretical knowledge that is hard to integrate with the practical
work in pharmaceutical organizations. Pakistan Pharmacy Council and
Pharmacy institutes have the responsibility to harmonize the pharmacy
syllabi with the future needs of Pakistani pharmaceutical industry.
Currently there are 10 teaching institutes of pharmacy accredited with
Pakistan Pharmacy Council and over 400 pharmaceutical companies.
Collaboration between teaching institutes and organizations can produce
human resource that that can successfully fulfill the needs of Pakistani
pharmaceutical industry as well as boost the research and development
activities. Synthesis of new drug molecules is imperative. A shift from
the conventional drug manufacturing to genetically engineered medicines
requires greater research and collaboration than ever before.
Although the new regime will also benefit the
manufacturers by waiving all the import duties on the raw materials that
will eventually reduce the manufacturing cost of locally manufactured
medicines but increase in import, decrease in export, non compliance
with the international standards and extension of patent period can
effectively nullify any beneficial effect of WTO.
Mr. Mohammad Asif is a pharmacist by profession and
holds a masters degree in Total Quality Management. Quality Management
is his favorite area of work. His various projects include Quality
management in Primary Education and Quality Management in
Pharmaceuticals. He is currently associated with Medipharm Pvt.. Ltd., a
licensee of Schering A.G. Germany, as quality control officer. He can be
reached at firstname.lastname@example.org.