IQVIA is the international company which collects, compiles, analyzes and publishes Pharma Industry statistics in most countries of the world. They have an office in Pakistan which does the same for Pakistan Pharma Industry. IQVIA report is published every quarter for the preceding quarter. Their second quarter (Q2 – April to June 2020) report has just come out. A summary is circulating on the social media.
April – June quarter bore the full brunt of COVID19. Lockdown started in the latter half of March and Q1 was largely spared. But Q2 posed following challenges for every industry including Pharma.
Supply Chain Disruption – Pharma industry relies heavily on imports for manufacturing and packaging. Flights shutdown stopped all material supplies where they were. In many cases, materials which had reached an interim destination and were to be dispatched onward to Pakistan, got stuck at the same place. These could neither move backward to originating terminal nor forward to final destination. Besides, active and inactive materials, the packaging components in finished and bulk form are also largely imported. For printed packaging, paper and card and ink is imported by commercial importers who sell to printing presses. The entire chain of input was disrupted. On the outflow side, stocks could not be dispatched properly due to non-availability of logistic support. Even the courier services were also disrupted. The Production continued with whatever materials they had in store.
Services Disruption – All services were disrupted; banking, logistics, shipping, freight forwarding, export and import, maintenance, repair, toolmaking, and all other services were virtually stopped at one time. Later, these started cautiously and patchily and cannot yet be considered to have gained complete normality. Pharma industry, like others, uses many services, some of which are specific to Pharma. The disruption had effect on the overall performance of production and business units.
Quarantine – Work from Home and Stay at Home were applied everywhere. It is safe to say that despite efforts by management and staff, the overall productivity suffered. Some activities, such as production, could not be done from home and therefore related staff kept coming. Several other functions also required on-site presence. With some people working from home and some from office, the overall teamwork suffered. Luckily, Pharma industry was given exemption from lockdown but due to closure of public transport, several staff members, particularly females, could not come to the office. It was a forced #workfromhome, but it happened.
Pakistan Pharma Industry retail sales are documented by IQVIA in detail. However, sales done to government institutions at the center, province and hospital level are not captured. Government is a fairly large buyer with billions in budget. Similarly, drugs sold through informal channel and grey markets is also not included. Many Pharma companies are now exporting to several countries and are proudly earning much needed foreign exchange. Export sales are also not included.
If we combine all factors, we may reach an annual turnover of 600+ billion rupees (my estimate). Which makes Pharma obtain a place among major industries behind Textile, Sports Goods, Sugar, Cement, Fertilizers and FMCG (Fast Moving Consumer Goods).
During Q2, many industries suffered heavily. Pharma industry did not suffer much. The overall market is reported to have shrunk a little; by about 1%. This appears small, but if we consider that Pharma industry keeps growing by more than 10% even under difficult circumstances, this negative growth suddenly acquires significance.
Pharma Industry is a major industry, it is the backbone of healthcare system and is a major employer. Government handling of Pharma industry is not at a level appropriate for the industry.