Dear Colleagues! This is Asrar Qureshi’s Blog Post #611 for Pharma Veterans. Pharma Veterans welcome sharing of knowledge and wisdom by Veterans for the benefit of Community at large. Pharma Veterans Blog is published by Asrar Qureshi onWordPress, the top blog site. Please email to firstname.lastname@example.org for publishing your contributions here.
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.
- Contract Marketing – Another model which has become increasingly popular is that of contract marketing. A marketing company, or a manufacturing marketing company takes products from another manufacturer for marketing. DRAP had been dragging on registration of new products for several years, and the fast-growing companies needed new products badly to increase revenue through expanding portfolio, and there were so many manufacturers who had registered products but did not have the muscle to market these, the logical solution was that the marketing companies take exclusive rights from such manufacturers for marketing their products as their own. It was a win-win for both parties because the manufacturer kept manufacturing and earning while the marketer developed the brands. This practice caught on and presently hundreds of products are in the market on this arrangement. Elaborate agreements are drawn to bind both parties, but DRAP does not recognize this arrangement. The packs clearly show ‘Manufactured by’ and ‘Marketed by’, but DRAP looks the other way. Anyway, this is a big opportunity for both manufacturers and marketers to expand rapidly. Internationally, companies acquire other companies to grow at fast speed, and this is expensive and cumbersome. Here, products can be acquired at no cost and any number of products from any number of manufacturers can be acquired for marketing and growing business.
SWOT – THREATS……
We now take up the last part – Threats.
- Regulatory Environment at Home – Frequent and unexpected changes have been occurring and can occur any time. Government does not consider it necessary to take stakeholders into confidence before making regulations which directly affect Pharma industry. The regulatory environment at home poses following threats.
- New Rules – the most recent example is imposition of Sales Tax on import of pharmaceutical materials. This is a first since the inception of Pakistan. Sales tax was levied on local and imported packaging materials several years ago. However, Pharma Industry could not pass it on to consumers because drugs are exempted from sales tax. The current announcement caused a lot of confusion because even FBR did not appear to be clear on the mechanics and methodologies. Information came in bits and pieces and FBR is still dragging its feet on the question of refund. DRAP decided to authenticate import invoices online rather than on files. The officials were not trained on it and precious time was lost. New, unexpected rules imposed in unpredictable manner is always a looming threat.
- Rising Charges – Since the establishment of DRAP, the charges for various services have been constantly going up, so far these have become 10 times or more expensive in many cases. The services which were always free now ask for hefty sum of money. The constant rise in charges is a threat to Pharma Industry because this cost cannot be recovered.
- Pricing Policies – Increase in drug prices is a huge crisis in Pakistan every time it happens. Politicians, media, social media get suddenly active against it. No such reaction is seen against price increase in any other segment. For this reason, no elected government dared to increase prices for many years. The industry members then increased the prices arbitrarily and went to Sindh High Court – SHC to get interim injunctions, which they obtained. Notices were served to DRAP, and all concerned to appear before the court to which they obliged. SHC asked DRAP if they had a pricing policy, to which they submitted that no such policy was in force. SHC compelled DRAP to formulate one. DRAP went back and forth several times and got reprimanded. Finally, a drug pricing policy was presented. It said that the prices could be increased every year based on the CPI – Consumer Price Index, as announced by the government. The Pharma was very glad at this development, but this happiness was short-lived. For the first time, it was applied without hassle. During next year and the current year, DRAP has been sitting on the applications and is now asking for a good amount of money per product to grant price increase. This is official fee, and it does not obviate the need for people money. Present situation of price increase is a threat to industry and people.
The other issue with pricing is that ground realities are not taken into consideration. Many old drugs with small prices remain in perpetual shortage due to their old prices which are not viable anymore. DRAP either does not pay heed or grants such small increases which do not solve the problem. The patients are suffering and shall suffer more due to this.
- Inefficiency – there are no time frames in DRAP. After two and a half years, the CEO has been appointed, most directors are on adhoc charge and they also carry additional charge on ‘look after basis in their own pay scale’. The outcome is that they only look and getting anything done is becoming increasingly difficult. There is huge internal strife within DRAP, litigations are going on and the work is suffering. The field offices have similar issues. The current level of inefficiency is unprecedented and was never seen before in a long history. In order to hide away, new restrictions on visitors are imposed on the pretext of saving time, but the exercise is actually meant to avoid facing people.
- Attitude – Our ‘public servants’ never served; they always tried to rule the public. DRAP is no exception. DRAP officers are known to display rude attitude, poor manners, and clear disrespect to business community. The relationship between regulators and industry is that of mutual contempt and distrust. Nothing good can ever come out of such relations. The attitude has gone from bad to worse with the induction of new officers, which is alarming for the industry.
To be Continued……
Disclaimer. Most pictures in these blogs are taken from Google Images which does not show anyone’s copyright claim. However, if any such claim is presented, we shall remove the image with suitable regrets.
Great contribution by Asrar Sb.