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Last night at midnight, another tenure of lockdown was clamped without prior warning.
We wish so, but it may not be the last such episode. We are not seeing the end of COVID19 yet; we don’t even know when it will be. In this situation, saying Post-COVID strategies seems out of place. However, the inaction is even more out of place because nothing can wait indefinitely.
Globally, every day, new ideas are generated, and new strategies are discussed. No one is sitting idle, waiting for pandemic to go away. We are also doing something, though it may not be as innovative or integrated as the developed world. The scale is totally different. US has already spent 2.7 trillion dollars and has proposed another 1 trillion package which is being contested as insufficient. Europe is debating on 850 billion dollars package. We have to see what our sources allow. The argument about inadequacy is valid but cannot be changed. We can take advantage of their thinking all the same and customize it to our needs and resources.
What are the major hits of COVID19? Economic hit is the most urgent and most significant. Then there is social impact and psychological impact and so on. We shall try to look at all of these in some detail.
The economy has been hit from both sides. The growth has been severely hampered, and the expense has risen astronomically. It is classical case of burning from both ends. The government is hurt, and the people are hurt. Government revenues went down while the spending increased due to ‘Ehsaas’ program and other such things. The government has almost stopped after initial activity as it cannot sustain on this path. The people lost jobs or received significantly reduced pay checks. Most organizations actually refused to pay even when they did not lay off employees.
Actions are required in the following broad areas.
POLICY – government does not appear to have enough capability to form policies which will help to cope with this situation. Some government departments are compounding the problems by either deviating from announced relief measures or issuing directives which go against the spirit of relief. DRAP is one such example. It has tried to make as much money as it could through fast track, short-term registrations of COVID related products. The concept is noble, but the execution is not. It has stuck to its delaying tactics even in this time. The latest notification proposing to restrict nutritional supplement prescriptions is beyond understanding. DRAP has enlisted over one thousand manufacturers of supplement products. Then it has enlisted thousands of products. All this has been done against fees amounting to many millions. DRAP has legitimized, promoted and encouraged manufacturing of nutritional supplement products in the country. It has now taken U-turn and calling for restricting the use. It is a contradiction par excellence.
In the healthcare sector, government is also culpable because it is letting the central regulatory body, DRAP, operate without full time, appointed directors. No wonder, DRAP is unable to function at desired capacity.
Limiting myself to our area of healthcare, the representative bodies must work with the government to form policies which would stimulate the industry, not strangle it. Pharma representative body, PPMA must work with the concerned quarters to influence policy making in the right direction. PPMA has its own issues also. The office bearers are generally considered to be busy in working for their own, personal interests, rather than the industry. For once, the PPMA must rise above vested interests and work for the industry. PPMA members also need to see beyond immediate money-making machinations and look for recovery and long-term health.
Following areas may be considered for policy making in order to stimulate Pharma industry.
- Long queue of pending registration applications should be reviewed and taken care of. There is no justification for keeping an application pending for a year or two or even more. The policies working as undue obstacles in the way of registrations should be reviewed and amended. New products are the lifeline of any Pharma company. The lifeline should be extended.
- True hardship cases be given required relief. These cases have been pending for years may be. The clause of maximum 10% increase for hardship cases, as and when granted, is utterly unjustified. Many old products which are cheaper are not available regularly due to poor, unsustainable prices. The companies and patients both are suffering. The patients are compelled to use much more expensive alternatives. The new policy will give relief to all stakeholders.
- Import duties be rationalized. Pharma industry is exempted from charging sales tax but has to pay a huge amount at import. This increases the input costs. Basic packaging components are subject to up to 70% duties and taxes. This is an unnecessary burden on the industry which must be removed in this time of crisis.
- Import duties of manufacturing and testing equipment must be rationalized. The sum of duties and taxes on a High-Performance Liquid Chromatography (HPLC) is around 70%. The machine itself costs in millions, with millions more added as import duties. Such policies discourage use of new technologies.
- Incentive package for exports be redone. The government has backtracked several times on it and has withdrawn facilities rather than adding. Export is one area which can generate good amount of revenue in foreign exchange. It is much needed at this time. Secondly. Pakistani Pharma companies mostly export to developing countries. These countries do not have their own developed industry. They are further down due to COVID. This is a good time to pursue exports aggressively. DRAP has increased the fee for getting export GMP (Good Manufacturing Practices) certificate manifold. This has no basis and it should be reversed. Export-promoting policies should be designed which have less possibility of getting exploited for personal gains.
- Development of new technologies for innovative drug delivery systems and novel products should be promoted. Many new technologies have been introduced in the world which are not available in Pakistan. Our Pharma industry is still working with traditional equipment and making conventional products. One reason for not investing in this area is the poor pricing policy, which is under the control of federal government, not DRAP. The pricing section does not consider the cost of novel drugs manufacturing and gives prices which are unsustainable. Pricing in any case is an urgent area for intervention and overhauling.
- Incentive packages for developing raw material producing units, so that the reliance on import can be reduced over time, foreign exchange be saved, and foreign exchange be earned through export of raw materials. Other than China and India, there are few raw material sources worldwide. Eastern Europe has some as they were forced to develop this industry during the Soviet era, but it is still not much. Pakistan has a large Pharma industry and can become a profitable cluster of APIs (Active Pharmaceutical Ingredients) producers. Tariff protection for existing API manufacturers should be abolished and the new ones not granted. In case of locally produced APIs, the industry users are like out of frying pan into the fire. The equipment required for API manufacturing should be given due relief in duties.
There may be more areas where policy review/making may be required.
Shall Continue InshaAllah……