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February 2022 marked 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.
Taking this analysis further and for better understanding, I shall also club the Opportunities and Threats. Both are related to two domains: Policies, because these may open new avenues or close the existing one; and Market, which is the place where everyone operates.
Policies as Opportunities – healthcare campaigns run by the government have raised awareness about certain diseases and has educated people to seek medical advice early. This is a good opportunity area for Pharma Industry.
More recently, Sehat Sahulat Card program is opening entirely new and exciting opportunity. All Pharma companies should study it carefully and get the most out of it.
Over time, people have become more affluent. True, that the disparity has also increased, but overall affluence has increased. There are several indicators for that generally, but the rise of private hospitals which are always filled with patients, and the long waiting lists of patients at consultants are clear indicators of purchasing power increase. People prefer to go to consultant rather than the GP sitting nearby. They are willing to pay for the battery of recommended tests, and equally willing to buy a heavy prescription. These are opportunity areas for Pharma Industry.
Contract Manufacturing policy and its revisions have been done and it is a reasonably good policy though it still lacks the major shift towards separating manufacturing from marketing. Anyway, contract manufacturing opens some new possibilities for Pharma companies.
Contract Marketing is still not addressed in any policy. Present policy of DRAP to look the other way has encouraged marketing companies to run their businesses and has provided a good opportunity to tap into various segments of market.
If DRAP comes up with proper policies for Contract Manufacturing and Contract Marketing, it will give a powerful boost to a business which is already there, everywhere. It will not be entirely new business opportunity, but it will rejuvenate an existing business by legitimizing it. It will also safeguard interests of both parties.
Market Opportunities – The biggest and most lucrative opportunities are always found in the market. It is highly rewarding to understand these opportunities and exploit these to the maximum. I had more elaborate discussion on this subject under the head of Opportunities and would not repeat it here. Here, the discussion is with reference to Market Opportunities.
Pharma market grows by double digit every year. IQVIA reports on pharmaceutical sales in various ways. However, IQVIA reports on retail sales only. And their universe probably does not represent all the suburban and rural areas chemists. Two known segments are not represented in their reports: selling to government and private institutions who purchase through tenders; and stocks sold directly to customers. IQVIA reported 615-billion-rupee sales for retail market during 2021. We may easily add another 185 billion to make it about 800 billion rupees. This is the quantum of allopathic drugs only; alternative medicines, herbal drugs, plant-based drugs, nutraceuticals, probiotics, cosmeceuticals etc. are besides and their market is probably larger than the allopathic market. We may be looking at 2 trillion rupees market. Still, it does not include medical devices and disposable products. All in all, healthcare is really a sizeable market with plenty of opportunities.
Several opportunities are not readily available in the market but can be tapped into easily. In-licensing of finished products, getting products from other local manufacturers to expand portfolio, getting own products toll manufactured from others to expand production capacity, adding non-pharma products etc. are such opportunities which have vast potential. Many progressive corporates are already pursuing these options, others can also explore and get the benefits.
Some opportunities have huge potential but are not availed at present: mergers and acquisitions, going public, seeking joint-ventures, and seeking partnerships are commonplace in many countries, but we still restrict ourselves to conventional formats of strict personal ownerships and family projects.
The sum up is that the Market offers a wide range of opportunities. Local Pharma should open itself up and explore opportunities beyond market growth.
To be Continued……
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