Sidra Khalil

Aisha Akram
Sobia Anwar Dawra
 History of Pharmaceutical
Industry of Pakistan
Pakistan pharmaceutical industry has passed through three main
phases

•1948-1971
•1972-1991
•1991- up till now
1.1948-1971
•After independence, Pakistan had no pharmaceutical industry and
traders primarily based in India were importing most of the
medicines.

•The Government of Pakistan established two pharmaceutical

units named “Khurram Chemicals limited” (near Islamabad) and
“Antibiotics Private Limited” (in Mianwali) through the Pakistan
Industrial Development Board (PIDB).

•The growth of pharmaceutical industry started from 1948 and

continued till 1971. At that time, due to the conducive policy and
the right entrepreneurial spirit, the pharmaceutical industry
reached its peak and had a leadership position in Asia.
2. 1972-1991
•Due to the discriminatory and restrictive registration policy (Drug
Generic Act, 1972), national companies suffered a lot so that
earlier created export markets were lost.

•In addition to that, completely manufactured drugs and

medicines were imported largely with the permission of the
government, which resulted in large scale flooding of imported
drugs.
2. 1992-2008
•In this period, the government followed a policy of de-regulation
in prices that resulted in free play where the national companies
could fix the same price as multinational companies .

•Due to this policy framework, the market share of national

companies grew as compared to multinational companies. The
national companies grew in size and also exploited possibilities in
other regions
Pakistan pharmaceutical sector
overview
•Pakistan is a promising country making advancement to different
areas of production. Pharmaceutical market in Pakistan has shown
tremendous space in the recent times.

•The increasing export of Pharmaceuticals from Pakistan is speaking

for the quality which is being maintained for manufacturing of
Pharmaceuticals.

•The export market is expanding to almost all the continents of the

world covering almost 40 major countries. Surplus drugs are being
exported to a large number of countries particularly to the Asian and
African regions with an expanding trade in the newly emerged central
Asian States

•Pakistan meets around 80% of its domestic demand of medicines

from local production and 20% through imports.
Pakistan pharmaceutical sector
overview
•The pharmaceutical market size is Rs. 70 Billion (US $ 1.2 Billion)
approximately. The market for pharmaceuticals in Pakistan has been
expanding at a rate of around 10-15% since last few years.

•Presently the Pharmaceutical industry in Pakistan is producing all the

major pharmaceutical dosage forms. Similarly, there are some special
products e.g immunological, anti-cancer drugs, certain anti-diabetics,
antidotes and products manufactured from biotechnology, which are
still being imported, in the finished form.

•Only few bulk pharmaceutical raw materials are being manufactured

locally and most of the Pharmaceutical raw materials are being
imported in large quantities from different counters of the world.

•At Present 30 multinational Pharmaceutical units are producing their

products in Pakistan. 334 national/local units are involved in
pharmaceutical manufacturing.
Pakistan Health sector overview
•Health is priority area of the Government activities. The high
correlation between the expenditures on health and productivity in
developing countries like Pakistan is enough to emphasize the
importance of increasing health services as an aid to growth.

•Health expenditure during 2007 increased by 35.6 percent to Rs. 53

billion. Out of this Rs. 53 billion, largest increase was observed in
Punjab (53.3%), followed by NWFP (49.5%), Federal government
(23.4%), and Sindh(18.1%).

• At Present there are 945 hospitals, 4755 dispensaries, 5349 basic

health units & sub health centers and 903 maternity and child health
centers in Pakistan.

•During the fiscal year 2007-08, 43 basic health units and 13 rural
health centers have been constructed.While 65 rural health centers
and 950 basic health units have been upgraded.
Pakistan Health sector overview
•80000 Lady Health Workers (LHWs) have been trained and deployed
mostly in the rural areas.

•Moreover, some 7.5 million children have been immunized and 22

million packets of ORS distributed.

•Various health programs with a special focus on major public health

problems have been carried out.These include the national programs
for the prevention and control of tuberculosis, malaria, HIV/AIDS,
hepatitis, blindness and program on maternal, neonatal and child
health etc.

•The total outlay on health sector is budgeted at Rs.60 billion (Rs.27.3

billion development and Rs. 32.7 billion current expenditure) which is
equivalent to 0.6 % of GNP.

•total expenditure on health has increased from Rs. 50 billion to Rs.

60 billion, of which, Rs. 27 billion have been allocated for
 Exports
•Currently Pakistan is exporting pharmaceutical worth $85 million while the
industry was aiming to expand and this would only be possible when government
puts a ban on the import of medicine.

•The export market is expanding to almost all the continents of the world covering
almost 40 major countries.

•The federal government is making plans to increase exports of the

pharmaceutical industry up to US$500 million per annum.

•pharmaceutical exports were increasing rapidly at the rate of 20 per cent

annually and the industry was expected to attain 40 to 45 per cent growth in
manufacturing and exports by 2010.

•The Middle Eastern, ASEAN and North African countries were lucrative markets for
Pakistan’s pharmaceuticals, since Pakistani medicines were recognized
recognised for their
high quality.
 Market Access Barriers
1.Local Manufacture Requirement:

• Pharmaceutical research and manufacturers of America (PhRMA)

member companies operating in Pakistan face additional hurdles that
devalue or limit the value of its intellectual property.

• Ministry of health insists on local manufacture as a condition of

registration. It is generally not possible to manufacture all products in
Pakistan such as products with limited usage and low volume.

• Moreover, there are certain products that are manufactured by

member companies at only one site from where they are supplied to
other markets and the quantities required for Pakistan are so low that
technology transfer for local production is not feasible. The result,
effectively, is that registration of new chemical entities is often
denied.
 Market Access Barriers
2. Government Pricing:

• The current government pricing system in Pakistan is another major

market access barrier.

• Despite fulfilling all the requirements requested by the health

authorities to set prices of pharmaceutical products, such as price at
the country of origin, regional prices and the product cost data sheet,
the government doesn’t consider this information and sets prices at
40%-50% less than the original submitted price.

• Officials responsible for pricing at ministry of health are mainly

physicians and don’t have the required expertise, technical know how
and experience in making this vital decision. Furthermore, prices for
new products are set arbitrarily, rather than on any rational basis.
Arbitrarily low prices have historically caused companies to abandon
plans to market products.
 Drugs Act (1976)
•An Act to regulate the import, export, manufacture, storage, distribution
and sale of drugs.

•Drugs Act, 1976 is a Federal legislation with distribution of functions

between the Federal Government and Provincial Governments as
follows:-

Federal Government Provincial Government

Manufacture Sale
Registrations
Pricing
Import
Export
Under this Act, the Federal Government has laid down the following rules
to carry out various functions entrusted to it under this Act:-

•The Drugs (Licensing, Registering and Advertising) Rules 1976.

– Provide the rules, procedures and conditions for grant of Drug
Manufacturing Licenses, registration of drugs, promotion to the
professionals and advertisement of drugs to the general public.

•The Drugs (Labeling and Packing) Rules, 1986. - Prescribe the

manners in which a registered drug shall be labeled.

•The Drugs (Import and Export) Rules, 1976. - Provide procedures

to import the finished drugs and the raw materials. The pharmaceutical
raw materials can be imported by the holders of valid Drug
Manufacturing Licenses and the registration of the respective drug.
•The Drugs (Specifications) Rules, 1978. - Provide order of
specifications which shall be applied to a registered drug.

•The Drugs (Federal Inspectors, Federal Drug Laboratory and

Government Analysts) Rules, 1976. – Specify duties of Federal Drug
inspectors and the procedures of the government analyst.

•The Drugs (Appellate Board) Rules 1976. - Provide procedures for

making appeals before the Appellate Board against the decisions of the
Central Licensing and Registration Boards, as the case may be.

•The Drugs (Research) Rules, 1978. - Every lincesee is required to

pay 1% of his gross profit towards a Central Research Fund, administered
by the Federal Government.
Industry Academia cooperation
•The universities of Pakistan were established by the colonial British
government in 1858 so as to produce educated Indians to serve in the
expanding bureaucracy.

•Being unattractive, the universities could not attract the most

competent students and remained medieval teaching institutions with
almost no research.

•Pakistan has a low proportion of well-trained University graduates and

even a lower proportion of technician per million populations relative to
neighboring giants as China and India

•There are 10 academic institutions recognized by Pakistan Pharmacy

Council for Pharmacy education in Pakistan and at present the academia-
pharmaceutical industry collaboration is at its inchoate stages in Pakistan

•None of the pharmacy educational institutes has ever filed any patent
application in Pakistan

•Increased collaboration between academia and pharmaceutical industry

•Industrial partners complain about the ‘unbusiness-like approach’ of people working
in universities. It is bitter reality that in most of the collaboration efforts, universities
have difficulty in meeting the timelines agreed

•Industry and university partners must be sufficiently flexible as university

regulations and corporate priorities and procedure can have a restrictive influence
on collaborations

•The key individuals need to have the freedom to take the necessary risks and bold
decisions so that the collaboration objectives may be achieved.

•the positive presence of the company within the university, coupled with direct links
made with students, enhances the company’s ability to recruit high caliber
graduates.
 Pakistan’s Top 10 Industries
1. Glaxo Smith Kline

2. Abbot Knoll

3. Pfizer

4. Aventis

5. Novartis

6. Merck Market

7. Searle

8. Wyeth

9. Roche

10.Bristol Myers Squibb

 Opportunities
•Maximum benefits can be reaped if low priced medicines are made
available to the customers.

•Pharmaceutical industry must keep itself ready to take on the medicines

whose patents are going to be expired sooner

•National companies must go for high quality standards since it is a

matter of survival and to stand firm in the cut throat competition

•Western companies spend more on the R&D of diseases that are

prevalent globally in both rich and poor countries without taking into
consideration the diseases of poor counties

•Another emerging concept in pharmaceutical manufacturing is contract

manufacturing. Contract manufacturing costs cheaper since it decreases
overheads and the costs associated with fixed assets
 Problems Faced by Industry
•Industry is facing difficulties in the production of life-saving medicines
due to gas and electricity load-shedding.

•The Pakistani pharmaceutical market remains beset with difficulties.

Strict government control over pricing has made many drugs
uneconomical, with the result that they either become available only on
the black market at inflated prices, or disappear completely.

• In this environment, manufacturers, both local and foreign-owned, have

proved unable to generate the profits needed for capital investment
•Currently the domestic pharmaceutical industry is operating with low
production volumes, outdated and obsolete machinery and quality
standards that are not comparable with that of MNC’s

•The future of the Pharmaceutical Industry lies with the genetically

engineered medicines but unfortunately there is no infra structure for the
biotechnology in Pakistan.

•Political instability, lack of consistency of policies and poor law and

order situation like other sectors has significantly reduced investment in
pharmaceutical sector