Dear Colleagues!  This is Asrar Qureshi’s Blog Post #612 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 for publishing your contributions here.

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.


  • Regulatory Environment Abroad – Regulations in countries where our Local Pharma prefers to export (less regulated countries) have rapidly changed. CTD dossier was adopted in several African countries much before our DRAP implemented it. Similarly, plant inspections were started by countries like Ethiopia, Kenya, Uganda, and Yemen many years before DRAP considered it. Presently, most importing countries have imposed the condition of plant inspection. Their inspectors have been very well trained, and they do the inspections as per international standards. In 2008, three inspectors from Ethiopia visited Pakistan and inspected thirteen plants; nine in Karachi and four in Lahore and did not approve any. Their rejection was based on merit. Inspection teams of DRAP are formed on favoritism and the inspectors are not well versed with international standards. We do not have the desired capability to perform quality inspections, although WHO and USP had been training DRAP officers on this subject.

There is a stark comparison where our Local Pharma is continuously falling behind. Pharma companies in many countries are going for international certification such as WHO prequalification, PIC/S, and EU GMP, but barring five companies, none of our Local Pharma is going this way. Even companies who have billions of rupees business are not pursuing it; they are busy in raising money rather than raising standards.

The regulatory environment abroad poses a serious challenge to our Local Pharma who are doing international business or aspire to do so. We have lost major business in Vietnam due to this factor and we may lose more. Opening new export destinations and protecting current business will become increasingly difficult.

  • Government Policies – Healthcare has never been neglected, but concrete steps to deliver holistic healthcare to public has always left much to be desired. Pharmaceutical business also suffers the same fate. The malaise that runs in other government departments runs here as well. Policy making is slow and deficient and implementation of policy is even more deficient.

Government has not come up with any plan to improve manufacturing and delivery of quality medicines to everyone in the last so many decades. It has not formulated any policy to upgrade pharmaceutical manufacturing sector either. Even now, small, poor, plants are being installed anywhere, whether it is suitable or not. True, that DRAP first approves the plant site and then approves layout for construction of manufacturing unit. However, if you happen to visit ten plants, you can spot several deficiencies in each of them.

Government policies to upgrade manufacturing, facilitate export, and rationalize pricing are desperately required. The threat is that every now and then, some new policy is introduced which goes against these objectives. New rules, unpredictable timings, and inefficient implementation, threaten the pharmaceutical business.

New drugs registration delays are another threat. The present policy for 5D molecules where the dissolution profile of generic drug must be compared with the innovator, is a good thing, but DRAP is silent on the question of where and how to get innovator packs of those products which are not available in Pakistan. DRAP leaves it to manufacturers to somehow find innovator packs from international market and is not willing to give any support.

Another threat is inconsistency of policies. Local Pharma thrived due to support from the then Ministry of Health. Lately, a shift towards multinational company is becoming obvious. Their products are registered early, and they are awarded high prices as per their demand. This disparity leads to disparity in the market and customers.

As long as these issues with the government policies remain, the threat shall also remain. Knowing our system, it is going to be the same for the foreseeable future.

  • Rising Cost of Manufacturing – The cost of doing business has risen exponentially and is rising further due to following reasons.
    • Material Prices – unprecedented and irrational increases in materials prices are seen for quite some time. The environmental concerns in China led to closure of raw material plants for extended periods. Imbalance between supply and demand caused a serious jump in prices. COVID19 caused sustained rise in the material prices and the problem was compounded by huge increase in sea/air freights. The price hike is not restricted to raw materials, all packaging materials have also jumped. Most packaging material is imported, and the prices are rising every day. The third factor has been sharp decline in currency which increased the landed cost by 50% even though the material price had not changed. The fourth factor is the imposition of 17% sales tax on all imports which will increase the cost of import by over 20%. Government has pledged to refund it but against one time deduction, the refund shall be made in several installments over an extended period.
    • Energy Costs – Energy prices have been rising constantly. Electricity, natural gas, LPG, Diesel for generators is continuously going up. The energy bill is the among the most significant costs in production, and it is not stable. Government also keeps adding fuel adjustment charges to inflate it. LPG is also commonly used in pharma manufacturing and its prices are steadily rising.
    • Labor Cost – As a regular process, wages increase every year for all staff. It is not related to increase in business, but it is related to inflation. Official inflation rate as published periodically is around 10%. It means a 10% increase should be added.

Ultimately, all these costs push up the cost of product. Since the selling prices are fixed, therefore the profit margins are eroding. This is a huge threat to the survival and growth of Local Pharma.

  • Rising Cost of Selling – We had discussed how the marketing approach has changed in the last two decades particularly. Several factors are contributing to increase in the cost of selling.
    • Promotional Materials – regular promotional materials such as folders, gifts, display materials have all become costlier by a factor of hundred percent only in the last two years. For the same amount of promotion, the cost is doubled.
    • Team Size – the team sizes have multiplied by many times. Mass promotion team size in large companies is between 180-200. It used to be 30-40. No doubt the business has also multiplied but increase in team size adds to the cost.
    • Customer Services – this is the largest cost head which has been added and which was not there before. The budget for customer services is probably the biggest cost in Marketing now. I would not go in detail because we have discussed it already.

The rising cost of selling is a serious threat even for large size companies.

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.

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