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Continued from Previous……
Pharma Industry is like any other industry; like private hospitals, private medical colleges and private education. It is ‘for-Profit’. The serving of humanity myth was always a myth. Big Pharma of the world have been implicated in undesirable activities and have been prosecuted and fined as well. This is a large topic which may be taken separately.
Pakistan, India and Bangladesh have highly developed, robust Pharma Industry. So do Iran and Turkey. Afghanistan is almost entirely dependent on import as the local industry is insignificant. Major exporting partners to Afghanistan are Pakistan, India and Iran.
India has over 20,000 Pharma companies; about 80% manufacture finished drugs, about 20% manufacture basic materials. The Indian domestic market is valued at about 19 Billion USD; Pakistan is now less than 3 Billion USD, after currency devaluation.
India is the largest provider of generic drugs across the world, including US, Europe and other developed countries. Largest share of US generic market is captured by Indian products. The export of bulk drugs, finished drugs, biological drugs, alternative drugs and surgical goods also reached 19 billion USD in 2018. Growth trend is strong.
Iran has around 90 manufacturing companies with a turnover of about 3 billion USD. Iran has consistently faced challenges of sanctions. Though there were no sanctions directly on Pharma industry, but the import/export remains a tough challenge due to sanctions on the banking sector. Iran has made itself self-sufficient to the tune of 97%. With the help of the Iran government, couple of companies are producing biological products which are still not produced in Pakistan.
Turkey has over 300 manufacturing companies and a market size of about 3.5 Billion USD. The market used to be 90% MNCs and 10% Local Pharma; currently it is 66% MNCs and 34% Local Pharma. The local industry has shown robust growth. More importantly, Turkey exports pharmaceutical products to 144 countries including Europe, CIS, North Africa, and Middle East. Turkey is also producing biological and anti-cancer drugs.
Bangladesh has about 250 registered Pharma manufacturing companies, all doing generic business. Estimated market size is close to 3 Billion USD. Exports from BD are to 79 countries and are significant. BD Pharma has as an edge over Pak Pharma in the fact that their leading companies have major approvals from USFDA, EU GMP, UK MHRA, TGA Australia and ANVISA Brazil.
Until early 1970s, Afghanistan had some manufacturing units of MNCs. From the 1979 Soviet invasion till now, Afghanistan manufacturing industry has suffered badly. Trading activity has continued. Presently, Afghanistan has about 50 licensed manufacturing units. These are small units and are unable to compete in the market on prices because they have to import all active, inactive and even packaging components. Afghanistan is therefore dependent on import of medicines. MNCs are there of course. Other major imports come from Pakistan, Iran and India.
Pakistan Pharma Industry – Important Facts
Pharma manufacturing in Pakistan has been around since the inception of Pakistan. Almost all major MNCs, established their manufacturing units in Karachi. Notable exception was the American company Wyeth, which had a plant in Lahore. Much later Upjohn put up a plant in Islamabad.
- Pakistani entrepreneurs started very small. They put up small manufacturing units and manufactured low price, bulk products which could be used by doctors in dispensing in their clinics. Over the years, some brands of cough syrups, tonics, anti-diarrheal, basic antibiotics also emerged. However, Local Pharma did not venture to bring generic versions of MNC brands, till 1980s when major shift started. Since then, generic versions of virtually all research brands are introduced by Local Pharma in routine. In fact, the top few companies compete with each other to bring the generic earlier. Because whosoever comes first, takes greater market share.
- Today, Local Pharma claims 80% market share which translates into almost 400 billion rupees in a year. On this count, Local Pharma has done a great job for itself. The top companies are flushed with cash which they spend on expensive marketing campaigns.
- Local Pharma has not reinvested into manufacturing generally to the extent that it should have or could have done. As a result, there is not a single Local Pharma company to have international regulatory approval from any of the known regulators; USFDA, UK MHRA, Australia TGA, EU GMP, or even PIC/s.
- MoH earlier and DRAP later has utterly missed to steer the local industry in this direction while supporting it in many other ways. Even today, nothing significant is happening on this count.
- Local Pharma industry was started by individuals and families. No large group ever entered in this business. During 1950s and 1960s, we heard a lot about 22 families ruling Pakistan business and economy. These included Saigols, Dawoods, Adamjees, Habibs and so on. None of them was interested in Pharma. Today, there are new economic powerhouses like Mansha group and textile tycoons, but they consider Pharma too small for them. To my knowledge, there are only two exceptions. English Biscuit/Shield group started Pharmevo in 1990s. The company had been doing well but appears to have slowed down lately. Few years ago, Ismail Industries (Candyland fame) established Hudson Pharma. They have focused on less crowded market areas, but they did not enter the market with any fanfare. In fact, it is almost a silent, unnoticeable launch. This fact has not boded well for the industry over the years.
- Local Pharma entrepreneurs are a mix; some graduated from distribution business to manufacturing, some were into entirely different businesses and came to Pharma under the illusion of making quicker money, some started with cottage-type business and then shifted from residential to industrial areas, and some were pharmacists who considered it their natural calling to produce medicines. Later, some medical doctors also joined the bandwagon. This is perfectly fine because it is a usual trajectory of evolution in many countries. Pharma businessmen, however, have not taken well with the regulatory requirements. And have postponed execution on one or the other pretext. MoH/DRAP has also been generally lax in implementing it.
- Local Pharma, with the exception of few, has not upgraded itself technically; both in equipment and human capital. It is more about will, rather than affordability.
- Local Pharma has not established any real Research and Development center individually or collectively. The R&D in a typical generic Pharma company is limited to developing generic formulations based on research products formulation. No resources have been allocated for real R&D.
- The onslaught of uncontrolled (now semi-controlled) alternative medicines has damaged the entire Pharma business. It brought a lot of new money which was not entirely legitimate and therefore brought corruption with it. Practically, all notable Local Pharma have a business division selling alternative medicines under various guises.
The summary is that Local Pharma has thrived and blossomed in volumes and money, and it has brought relief by providing economical generic versions of research brands. However, it has not upgraded itself from technological and regulatory perspective. Big money is coming to Big Local Pharma; the poorer cousins are trying to follow their richer idols by whatever means possible. After all, money makes the mare (and the mayors) go.