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Opening Note
February 2022 marks my completing 47 years of working in Pharma Industry. Allah be praised. I am still working. The first half of my working career was spent in Multinational companies, and the latter half in the Local Pharma, making me well-versed with both innovators and generics markets. I also had the opportunity to work in business as well as operations.
My journey of near half century is also the journey of Pharma Industry in Pakistan. Great changes have occurred in this time and a lot could be written about it. In my blogs, which were started about four and a half years ago, I have covered several topics related to Pakistan Pharma Industry. This multi-part series shall do and review the SWOT – Strengths, Weaknesses, Opportunities, Threats – of the Pharma Industry.
SWOT – OPPORTUNITIES……
As mentioned in the introduction of SWOT, Strengths and Weaknesses are internal while Opportunities and Threats are external.
Another point to mention is that my focus is mostly on Local Pharma which is dominating the Pharma Industry since many years.
- Growing Market – Pharma market grows usually by double digit every year. As the base increases, the real money added with the same percentage keeps going higher. Last year, almost 50 billion rupees were added in 12 months, which comes to over 4 billions per month. These are big numbers by any standard. True, that larger players got a major share out of this growth, but something trickles down to everyone. The major driver of market growth is introduction of new drugs, which every Local Pharma is doing. So many new products are introduced every month, it is baffling. This is despite the fact that DRAP is slow in registering new drugs. The alternative route discovered and exploited by companies is to take registered products from other companies, and market these from their own platform. Couple of top ten companies are heavily engaged in it. Another option is to get products toll manufactured so that the overall production volume could be increased, which would not be possible through own manufacturing only.
- International Business – Local Pharma remained busy in local market for long and barring a handful, no one ventured into the international business, though the regulatory requirements were nominal everywhere. International business may be divided in to two categories: export to developed countries, and export to developing/underdeveloped countries. The developed countries were already ahead and had more stringent requirements in place. No company from Pakistan could match their requirements, and we did not even try that. India focused on upgrading its manufacturing facilities and they are now major suppliers to the developed countries. India also focused on producing the raw materials in their country to feed their own industry and to export to world markets. They are now also one of the two major sources of pharmaceutical raw materials in the world: China being the other.
Pakistan Pharma went the easy way and approached smaller, poorer markets where regulatory requirements were much less elaborate. It was mostly Africa, East Africa, and parts of West Africa. Later, more countries in African region were added, Sri Lanka became a favorite destination; CIS countries were explored in detail but not much came out of them. Pakistan Pharma did not acquire any international certification, did not invest in higher technology manufacturing such as vaccines, biological drugs etc. Our Local Pharma remained busy and happy with selling regular generic products. During the last 20 years, some companies have taken up international business more seriously, they opened offices in some countries, put up their own staff and launched their products in those markets. The number is still small and the international market for our companies is shrinking because we are still not investing in the infrastructure development.
International business is a huge growth opportunity for Local Pharma. However, international business requires patience and investment. Local Pharma has the muscle to invest but lacks vision and patience to build this segment. Local Pharma would do itself a world of good by focusing on international business. True that our local market is big and growing at a good pace but opening the world for us is even better. The examples of those who have done well in the international markets are inspiring and should be followed.
- Business Development – is about in-licensing and out-licensing. Mostly it is done between various companies who develop products. Presently, there are some research companies who work only for identifying new molecules and taking them to pre-clinical stage. They look for partners who will take up from there, do the clinical work, register, and commercialize it. Other than New Chemical Entities – NCEs, it is also done for advanced generics like Biosimilar products, new drug delivery systems etc. We do not do research pf any kind in Pharma, and therefore do not have anything to offer to others. The function of business development has emerged in a slightly different way in Pakistan. We can not spend too much money on developing and commercializing new molecules, we also cannot bring technology and manufacture here because new technologies are extremely costly, therefore, it suits us to bring finished drugs here and market these. Basically, we negotiate for getting marketing rights for Pakistan market.
Few companies have done extremely well in this arena. They have successfully negotiated many products and marketed these here. Addition of such products not only adds revenue, it also enhances the image of the company. The biggest example was that of Sovaldi for Hepatitis C which was the cherry pick of BD. Ferozsons did that coup and added couple of billions to their revenue while enhancing their image. Most recently, AGP, GETZ, HIMMEL have brought biosimilar drugs based on monoclonal antibodies, popularly known as mAbs. They are looking eye to eye with the innovators and trying to replace the innovator with their biosimilar. If I may say, this in the new order and it will catch up. Many of the in-licensed drugs have done well on the market.
Another aspect of BD now is arranging products locally. These include both pharmaceutical and nutraceutical products. Pharmaceutical products follow the prescribed formula, but nutraceuticals offer quite a room for maneuvering. The formulations can be tweaked and enriched to enhance certain effects. Like other cases, some companies are very active in this area, others are still thinking.
The summary is that Business Development – BD offers the biggest window of opportunity to pharmaceutical companies. Presently, BD is less understood and applied and this situation must be corrected.
To be Continued……
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