Dear Colleagues! This is Asrar Qureshi’s Blog Post #641 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 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 is the SWOT – Strengths, Weaknesses, Opportunities, Threats – Analysis of the Pharma Industry and propose strategies.
Strategies to Avert Threats/Risks
In this last set, we shall discuss strategies that shall help in averting threats and risks. These may be prevailing now and may be coming up in the near future. The nearness of future is important factor, because some of the shadows are already lurking. In the strategic language ‘Clear and Present Danger’ is which is here and now and serious. Some do belong to this category also.
We shall start from the present and move into future.
- Stay Alive to Circumstances – These are truly turbulent times, and highly unpredictable also. It is extremely important to stay alive to what is happening around and react without wasting time.
- Since the onset of COVID19 which took over the world in early 2020, the world has not been the same. The cascade of changes is not stopping. Initially, the scare was hyped so much that the world stopped in its tracks. From Pharma Industry point of view, the hospitals were closed to entry of Pharma people, and many GPs and consultants closed private clinics and stayed away. Offices were closed and whosoever could work from home was asked to do so. Pharmaceutical, being a healthcare arm, was exempt from strict restrictions but it was affected severely all the same.
- Supply chain was seriously hit because factories in China and India were closed. The materials were not shipped or whatever was in stock was shipped. The staff of shipping lines was also off work, vessels were not available for transport, due to disruption in supply cycle the containers were not available. It was a chaos which is still not entirely sorted out. The other fall out is that the cost of materials, cost of containers, and cost of shipping has gone up several times which has put severe strain on costing.
- US and China have been in confrontation since Trump era, and it is continuing. Europe, being subservient to the whims of USA also follows suit. Imports from China were subjected to additional tariffs which were countered by China with similar actions. Chinese companies were restricted for security reasons, the worst of which was house arresting of Ms. Meng Wanzhou, a senior executive of Huawei who is also daughter of the CEO at Canada for nearly three years on some unclear pretext. Obviously, it was at the behest of USA because it considers Canada as its backyard. These measures have affected the worldwide supplies situation adversely. The situation is continuing.
- More recently, Russia’s invasion of Ukraine came as a blow from nowhere. The reactions are severe with both blocks sticking to their guns. The whole world has become polarized and forced to take sides. It is not just about politics; it is about the economy which is being destroyed every day.
- At home, the things are in bad shape. DRAP finally got a permanent CEO whose effectiveness is still under question. DRAP has serious disconnect with the industry and the reconciliation is not seen anywhere. DRAP is trying to push polices unilaterally which it can, but industry and regulators do not function like this; it is always through discussion and onboarding of all stakeholders. DRAP has increased the costs of all services, some of which are completely unreasonable. Pharma industry is under pressure from all angles.
- The new government is non-functional after the departure of PTI government. It is not about politics, the PTI did not do a great job either, but at least there was a semblance of government which is missing right now. There is no authority to go to for getting a decision, asking for relief, redressal of a grievance etc.
- The competition is fierce. As mentioned on various occasions, our pharma market is highly unevenly distributed, with 50 companies have almost 90% market share. The big ones are fighting hard to retain their market share and status, they have the means and resources and clout to do so. Smaller companies are being further relegated to the margins and their survival is at stake.
- The onslaught of franchisers and marketing companies is changing the dynamics of pharma market. These are disruptors who have no liability and who drive hard to gain the market. They are lean, agile, and highly accommodating because the entire activity is unregulated. They are eroding the share of all pharma companies, but again, the smaller companies fall prey to them more easily.
- Nutraceutical is another disruption which is seriously breaching the market of pure pharma. They get the share of prescription, the buying capacity of patients, and place of pharma products. Because their prices are not controlled, they sell at exorbitant prices and offer lavish services to customers. Pharma cannot keep pace with them or compete with them.
- Cost of production, marketing, and selling has gone up considerably. Prices have not been increased accordingly thereby putting further strain on the already fragile economy of smaller pharma companies.
These are major factors which are affecting the pharma business from every angle. No company can afford to be oblivious to these circumstances, or they may be hit hard. It is extremely important to always remain aware of domestic and international situation and keep reacting accordingly to stay afloat.
To be Continued……
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