PHARMAVISION 2000: PAKISTAN'S PERSPECTIVE
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 share.
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 companies.
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 year 2000:
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 2000.