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February 2022 marked my completing 47 years of working in Pharma Industry. Allah be praised. I am still working. 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.
It is now time to strategize, as this was the purpose of this long exercise.
Strategies are made on these parameters:
- Strategies based on Strengths
- Strategies to mitigate Weaknesses
- Strategies to exploit Opportunities
- Strategies to avert Threats
We shall follow the same line of thinking. We have completed Strategy Recommendations based on Strengths and Weaknesses.
Strategies to Exploit Opportunities
- International Business – International Business offers great opportunities which our Local Pharma is not pursuing yet the way it should be done.
- Local Pharma had had a checkered relation with the international business for many decades. Very few companies thought of exporting to other countries although it was extremely easy in those days. The regulatory requirements were few and easy and the markets were receptive. A handful of companies started but did not continue seriously. The potential of this business was never clearly understood. Mr. Younus Batla is a very senior Pharma sales professional and is among the pioneers in international business. He says it was largely his own initiative; the company neither stopped nor encouraged it. He kept exploring countries in Africa, appointed distributors and started business on a small scale. He continued for several years but when he left the organization, they did not follow his trail. So much for the interest in international business.
- Pakistani businessmen are generally reluctant to go international and probably righty so. Unlike European companies who started going out soon after their inception, we did not think about it. Several reasons may be considered for this attitude.
- European countries had a long history of exploring the world. Their ships and private armies and businessmen roamed around, found new places for action, and gained enormous benefits. Pakistanis never had this spirit. Our people were contented with staying home and took great pride in saying they had never gone away from their villages. With this background, it is easy to understand why our Local Pharma actively rejected the concept of international business.
- European countries were small and were forced to look out to increase business. To their nearest were other European countries and they embraced each other warmly. We had always seen large population and did not see the need to find other markets. We were contented with what we had, and this is yet another point. Our contentment is historical and equal parts rooted in religion and culture. We train ourselves to stay contented with what we have because striving for more may be considered greed.
- Local Pharma did not invest in other countries like MNCs did. None of our companies tried to put up a manufacturing unit in any region internationally. The opportunities had always existed for such ventures. Parallel to GATT and WTO and alleged international clubs, the countries went into regional alliances to protect their interest. Several trade agreements like SAFTA, NAFTA, IBSA were signed but Pakistan did not avail it in any appreciable way.
- Local Pharma did not have the expertise to control operations from a distance. Our system of management had always been owner-centric; it still is. We cannot understand how a business would be managed without the presence of the owner. The MNCs worked on developing systems early on and they were able to expand. Another issue here is the mistrust between employees and employers. The general sentiment of employers is that employees are not trustworthy. True that problems exist on both sides, but life has to move on. Very few entrepreneurs have gotten out of this mindset, and those who did have been able to perform much better.
- The regulatory requirements have become more stringent in every country and Pakistan is no exception. If a pharmaceutical company fulfills local requirements fully, they will be able to compete in several markets internationally. African countries, CIS countries and few Southeast Asian countries still need to import medicines because they do not have local manufacturing capability. They cannot use all branded, MNC drugs due to high prices. They need economical generic products which can be easily supplied by Indian and Pakistani companies. China is still not big in export of finished drugs, Iran is patchy, so the competition is mainly between India and Pakistan. The good thing is that Pakistan has established its image in these countries that the quality of drugs supplied by our companies is better than Indian companies. This is the great advantage which must be maintained and exploited.
- It is also time that the bigger companies get international certifications and go into highly regulated markets such as Europe. I may add here that the biggest and most lucrative market is USA. It is difficult to reach there, but it is most rewarding. Europe is losing its charm because the countries are in economic turmoil and things are deteriorating. True, that getting EU GMP approval is easier and it may be considered as a steppingstone to reach the US market.
- International business takes time to develop, takes consistent follow up, and takes some investment before the business is seen. The patience and courage are required to go in this direction. Having said that, all those companies who have established a home business base can easily afford to pursue international business.
- Nutritional supplements and nutraceutical products are in high demand in most countries. The registration process of these is still simpler, easier, and quicker. The business may be started with these products and then pharmaceutical product may be added.
International business offers a larger market than the domestic market. It is advisable to take it seriously, make medium term plans for three to five years and go in this direction in a proper, organized manner.
To be Continued……
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