Indian Pharmaceutical Giants have
an eye on Pakistani market to
export finished drugs
They seem to have successfully penetrated in the bureaucracy and traders which will cripple the Pakistani Pharmaceutical industry

KARACHI: Continued political instability in the country has dealt a severe blow to the economy which has adversely affected the trade and industry in general and the pharmaceutical industry in particular since the drug prices remain strictly controlled which is not the case with other industries. The US dollar which was selling at rupees sixty a year ago has now increased to Rs. 76/- and since most of the pharmaceutical raw material is imported, the industry finds itself in a fix. If all this was not enough, increase in price of gas, petrol,  electricity and other utilities and services has pushed the cost of production much higher which might also affect our exports.

On the other hand, lack of unity among the pharmaceutical manufacturers, incompetence of its leadership to convince the government of its viewpoint to get a positive decision to at least deregulate the prices of non-essential drugs and allow a reasonable price increase has made the situation worse. The result is that now according to reports about half a dozen pharmaceutical units which includes foreign and national are on sale.  At the same time the Indian Giants in the pharmaceutical industry have their eyes set on the Pakistani market to export finished drugs. They have not only successfully penetrated into the bureaucracy but have also found partners among the traders to push through their agenda. According to some reports it was almost decided to allow import of finished drugs from India on the pretext that they are much economical when some PPMA members prevailed upon the Prime Minister Yousuf Reza Gilani who personally intervened to stop all this. The Pharmaceutical industry also misses the former Federal Health Secretary Mr. Khashnood Akhtar Lashari who, it is said, was not only easily accessible but had a very nationalist outlook. He supported all the positive and constructive suggestions and helped the national pharmaceutical industry as well as taking care of the interests of the multinationals as long as it did not hurt the interests of Pakistan. Now we have a new Federal Health Secretary and it might take some time when he is fully aware of all that what is going on. Failure of the Federal Health Ministry to have a National Drugs Formulary and check unethical marketing practices by the pharmaceutical trade and industry is another important issue. Vested interests and those involved in such unethical marketing practices have so far been successful as the Federal Health Ministry continues to ignore all this.

It is generally felt that the performance of the Pharma industry representatives has so far been very disappointing. There is no unity among them and various people work to promote their own personal interests rather than safeguarding the interests of the pharmaceutical industry as a whole. Some of them who have a much larger share in trading rather than manufacturing are reported to have a soft corner for import of finished drugs from India without realizing that it will adversely affect the national pharmaceutical industry. Since there is a general perception and it is often highlighted in the media that prices of drugs are much lower in India than in Pakistan, which of course is not true in many cases, it is enough to mislead and misguide the public sentiments. One must understand that it is not the prices alone. While trading helps a selected few, industrialization provides job opportunities to so many besides helping other support industries which is all interlinked with the country’s economy. Amicable solution of the ongoing judicial crisis is considered a must to have a stabilizing effect on the economy and check the slide of Pakistani rupee against dollar but our politicians seems to have learnt no lessons from their past mistakes. Indians will be too happy to dump economically priced finished drugs to capture the Pakistani market in the beginning and once it has effectively crippled the national industry, we will be left high and dry mostly dependent on imports.

No one will disagree that the government must ensure availability of drugs at affordable prices but it must be realistic. One may ask why it keeps on increasing the prices of electricity and petrol every now and then which is much cheaper in the neighbouring countries.  The arguments most often put forward is that it is keeping in view the world oil prices and moreover it is in the national interest to reduce the trade deficit and improve balance of payments. All this does not help the industry but adds to their miseries. Increase in interest rate has also added more worries for the industry.

Almost all the major MNCs and National pharmaceutical companies are located in Karachi. However, during the last couple of years a number of new small drug manufacturing units have come up in cities like Peshawar, Rawalpindi-Islamabad, Faisalabad and Multan while their number has increased at Lahore as well where some big drug manufacturing units are also located... Though their market share is not much but since they are more in number, it is their desire to have an effective say in policies governing and regulating the Pharma industry. They do find it much easier to cater to the local market as the bigger units located at Karachi have to incur additional expenditures of freight and distribution with the increase in transport cost due to increase in oil prices. Some how their internal differences and failure to take a united joint stand has not helped the pharmaceutical industry get its voice across the power corridors. We still have an incomplete cabinet at the Centre and Ms Sherry Rehman the Federal Information Minister till the filing of this report on August 31st had the additional portfolio of health. Since she is too busy, it is said, timely decisions are not taken in the Federal Health Ministry. Even though after successful negotiations with the former Federal Health Secretary it was decided that the drug manufactures will be allowed a gradual increase up to 20% in drug prices, the notification could not be issued.

Deteriorating law and order situation in the country is yet another constant worry. Some of the drug manufacturing units located at Hub Industrial Estates are being run through the professional managers since the owners cannot take the risk of personally visiting these units. Hence, who is going to make further investment to upgrade and expand these facilities despite the fact that government has offered some incentives? Security comes first otherwise one cannot stop the capital from flying to safe heavens.

Under the present circumstances, many new small units may not survive while the established drug manufacturing facilities might find it extremely difficult to cope with the situation. Some of the companies have already started diversifying their business, hence in these circumstances no one will be interested in further investment in pharmaceuticals which can fetch enough foreign exchange through exports provided the authorities are not only receptive to their genuine demands besides formulation of long term policies is ensured. PPMA as well as some other representatives of the Pharma industry are looking for an opportunity to have detailed discussions with the Prime Minister with a hope that after sympathetic hearing, some of their old standing issues may be resolved. One hopes that keeping in view the national interests, the government will not take any decision which cripples the national pharmaceutical industry and makes the country dependent on imports.

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