This document provides an analysis of the pharmaceutical industry in Pakistan. It begins with an acknowledgement and executive summary. It then discusses the history, characteristics, contribution to GDP, major companies, benefits, growth, problems, impact, and challenges of the pharmaceutical industry in Pakistan. The industry has grown significantly since the early 1970s and now meets around 90% of Pakistan's pharmaceutical needs. However, it faces challenges such as power shortages, lack of trained personnel, import reliance, and changing economic policies. The government has taken steps to support the industry's development.
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Pharmaceutical industry of pakistan
1. GROUP # 9
JINNAH UNIVERSITY FOR WOMEN
Assignment:PharmaceuticalIndustry of
Pakistan
Subject: Analysis of Pakistan
Industry
Class:BBA 3 (B)
Submitted to: Miss Qurat-ul-Ain
Submiton:16th April, 2016
• Nausheen Khan
• Nuzhat Fatima
• Syeda Umber Rehan
• Rabia Jamshaid
Group
Members
2016
2. 1
ACKNOWLEDGEMENT
We would like to express our gratitude first and foremost to our Lord Almighty Allah for giving
us the valor to remain dedicated to make this report.
Writing this report appeared to be great experience to us. It added a lot to our knowledge while
we were working on this report. If we say that this report is one of our memorable experiences in
student life, then it would not be wrong.
For the successful completion of this report, we would also like to thank our course instructor
Miss Qurat-ul-Ain. Without her gratitude this report would not be possible.
Finally, we offer our heartiest gratitude to our family members for their selfless blessings.
3. 2
EXECUTIVE SUMMARY
The pharmaceutical industry is divided into two sections i.e. private and public sector. In 1947
there were only three manufacturing units located at Lahore, Rawalpindi and Peshawar.
Pharmaceutical industries are highly competitive but fragmented industry. They have
complicated business model with numerous stakeholders. But they contribute significant amount
toward GDP. According to Pakistan’s pharmaceutical and healthcare survey pharmaceutical
industry contributes $1.6 billion towards GDP. Due to its significant contribution towards GDP,
government has put significant effort towards pharmaceutical industry development. As a result
of which Pakistan is the 8th largest pharmaceutical manufacturing industry in world. These
industries, however, face some problems like power shortage, lack of trained manpower,
difficulty in export, lack of new technology, changing political and economic policies, bad law
and order situation resulting in lower investment, higher interest rate and terrorism which reflects
foreign investors.
Research and Development threats from cheap imports, need of change in industry focus from
import substitution to export oriented, local active pharmaceutical ingredient 90% demand being
imported, bio-availability and bio-equivalence are some of the major challenges faced by
pharmaceutical industry of Pakistan. The Pakistan pharmaceutical industry is relatively well-
known in the Developing Asian markets with an export turnover of US$1 Billion as of 2013. Its
main partners included neighboring Afghanistan which itself doesn't have a medicinal industry.
Currently Pakistan has more than 800 large volume pharmaceutical formulation units running on
world class high quality equipment’s, including those operated by 25 multinationals present in
the country.
4. 3
TABLE OF CONTENT:
1. Introduction……………………………………………………………………....... Pg.4
1.1. Global Scenario of Pharmaceutical Sector………………………………… Pg.4
1.2. Pakistan Scenario of Pharmaceutical Sector………………………………. Pg.4
2. History……………………………………………………………………………… Pg.5
3. Pharmaceutical Industry Characteristics………………………………………….. Pg.6
4. Pharmaceutical Industry Contribution Towards GDP………………………….... Pg.6
5. Companies Operating In Pakistan…………………………………………………. Pg.7
6. Benefits of Local Pharmaceutical Manufacturing Sector………………………….Pg.8
6.1. Direct…………………………………………………………………………Pg.8
6.2. Indirect………………………………………………………………………. Pg.8
7. Growth of Pharmaceutical Industry In The Economy of Pakistan……………….. Pg.8
8. Problems To The Pharmaceutical Industry of Pakistan…………………………… Pg.9
9. Impact of Pharmaceutical Industry………………………………………………… Pg.9
10. Challenges…………………………………………………………………………..Pg.9
11. Needs to be done………………………………………………………………… Pg.10
12. Conclusion…………………………………………………………………………. Pg.11
13. References…………………………………………………………………………. Pg.12
5. 4
PHARMACEUTICAL INDUSTRIES OF PAKISTAN
1. INTRODUCTION:
What is Pharmaceutical?
A pharmaceutical is any kind of drug used for
medicinal purposes, like cough syrup or sleeping
pills.
You may have heard of a pharmacy, which is a
place where you can buy medicinal drugs, or a
pharmacist, which is a person who prepares those
drugs. In general, a pharmaceutical is anything
related to pharmacies or pharmacists, though it
especially refers to the kinds of medicines that they
sell. Pharmaceuticals are often contrasted with what
are called recreational drugs, which are the illegal
kind that are generally used for entertainment
purposes rather than to help heal the body.
Pharmaceutical industry in Pakistan:
Pakistan Pharmaceutical industry is growing at a very fast rate and contributing to the national
economy. The mainstay of public health is pharmaceutical sector in any country whether; it is
developing or under developing nation. The pharmacy profession and society are complementary
and dependent on each other for their development as a matter of fact. Pharmaceutical
preparations are the integral essential part of the health care system and best reward for the
suffering people and society.
Pakistan has a very vibrant and forward looking Pharma Industry. The Pakistan Pharmaceutical
Industry meets around 70% of the country's demand of Finished Medicine. Pakistan is a
developing pharmaceutical market, with a large population and economic progress evident, but
per capita drug spending was rather low , The Pakistan pharma industry is relatively young in the
international markets with an export turnover of over US$ 100 Million as of 2007. Pakistan
Pharma Industry boasts of quality producers and many units are approved by regulatory
authorities all over the world.
Let’s have a look to the global and Pakistan scenario of Pharma Sector.
6. 5
1.1. Global Scenario of Pharmaceutical Sector
The global pharmaceutical market is valued at not less
than 440 billion US dollar with 60% annual growth by
World Trade Organization (WTO), whereas,
independent studies reveal that this would be more
than 600 billion US dollar in 2010. Global
pharmaceutical market is assessed to be more than
double in value up to l trillion US dollar by 2020. 47%
market of pharmaceutical business revolves around
North America which is more than 206.8 billion
dollar. The gross national income of USA is about 25000 US dollar per annum. Likewise, 170
market of pharmaceutical business revolve around Japan with 48.4 billion dollar.
1.2. Pakistan Scenario of Pharmaceutical Sector
Looking at the Pakistan Pharmaceutical market, it is very
competitive and challenging. About 600 Pharmaceutical
companies are operating in Pakistan. Out of these
companies 386 are operating units. The population of
Pakistan is not more than 2.7%o of the total population of
the world with 1.5 billion US dollar market size. The gross
national income per person (GNP) of Pakistan is much less
than 5000 US dollar per year as per report of world Bank
(2002).World Health organization in its study. ”World Medicine
Situation” reports, that Pakistanis are spending 71% of their healthcare budgets on buying
medicines' This shows the lack of government public health financing (Pakistan is spending on
an average a mere 0.5-0.8 per cent of the GNP on health.
7. 6
2. HISTORY
The Pakistan pharmaceutical sector has come a long way, being almost non-existent before early
seventies to a prominent provider of healthcare products, meeting almost 95% of the country’s
pharmaceuticals needs.
The pharmaceutical industry is divided into two sections i.e. private and public sector. In 1947
there were only three manufacturing units located at Lahore, Rawalpindi and Peshawar. In the
early years of independence the country’s requirements were met exclusively through imports of
finished products. The discovery of antibiotics, tranquilizers etc. changed all the dynamics and
Pakistan had to import these new expensive medicines from western countries and sold them
locally. This caused a severe drain of foreign exchange allowing government to think and plan
about pharmaceutical industry. The government of that time suspended the import licenses of
pharmaceutical products under open general licenses. A few pharmaceutical industries were
authorized to operate in Pakistan.
A Colombo Plan Mission of pharmaceutical experts toured the country and made observations
regarding the absence of adequate quality control, lack of proper equipment and scarcity of
trained personnel in the existing manufacturing facilities.
Currently Pakistan has more than 800 large volume pharmaceutical formulation units running on
world class high quality equipment’s, including those operated by 25 multinationals present in
the country. The Pakistan Pharmaceutical Industry meets around 90% of the country's demand of
finished dosage forms and 4% of Active ingredients. Specialized finished dosage forms such as
soft gelatin capsules, parenteral fat emulsions and Metered-dose inhalers continue to be
imported.
The Pakistan pharmaceutical industry is relatively well-known in the Developing Asian markets
with an export turnover of US$1 Billion as of 2013. Its main partners included neighboring
Afghanistan which itself doesn't have a medicinal industry, Tajikistan as well as other central
Asian republics. In the past, Sri Lanka used to be Pakistan's biggest medicinal importer however
trading volumes have recently slightly subsided. Now more companies are having interest in
investing in Pakistan's medicinal Industries. Companies like Merck, Abbott and
GlaxoSmithKline have reported a great increase in profits in 2013. The pharmaceutical industry
in Pakistan made its entry in to the online space through Sehat.com.pk in April 2014.
8. 7
3. PHARMACEUTICAL INDUSTRY CHARACTERISTICS
Highly Competitive but Fragmented industry.
Complicated business model with numerous
stakeholders.
Very Technical/Scientific products.
Major R&D expenditures and High Risk product
development environment.
Long Product-Development Timelines.
Long Marketing-Planning horizons.
Highly regulated industry and highly regulated
marketing communications by FDA.
Primary targets: Healthcare Professionals and
Consumers.
Numerous “customers” with variety of information needs requires multiple approaches to
creating marketing campaigns and communications.
Evolving selling environment.
Use of e-channel still in its infancy in our industry.
4. PHARMACEUTICAL INDUSTRY CONTRIBUTION TOWARDS GDP
The Pakistan pharmaceutical sector has come a
long way, being almost non-existent before early
seventies to a prominent provider of healthcare
products, meeting almost 95 per cent of the
country’s pharmaceuticals needs.
The Industry today tops the rank among Pakistan’s
scientific research based industries with wide
ranging capabilities in the complex field of drug
manufacturing and technology. It ranks very high
in the third world, in terms of technology, quality
and range of medicines manufactured. From plain
painkillers to sophisticated antibiotics and complex cardiac compounds, almost every type of
medicine is now made indigenously.
9. 8
Pharmaceutical industry contribute significant amount toward GDP.
According to Pakistan’s pharmaceutical and healthcare survey pharmaceutical industry
contributes $1.6 billion towards GDP.
Due to its significant contribution towards GDP, government has put significant effort
towards pharmaceutical industry development.
As a result of which Pakistan is the 8th largest pharmaceutical manufacturing industry in
world.
With 40 biotechnology companies, involved in development and manufacturing of
various drugs.
Pharmaceutical sector is one of the most developed hi-tech sectors in Pakistan.
New pharmacy schools have been set up all across the country to provide quality
education to the students of pharmacy.
ROLE OF GOVERNMENT:
Pakistan Health ministry is considering toconstitute a committee comprising of the World Health
Organization, Pakistan pharma and health ministry to keep check on the quality of drugs
available in the market. According to statistics by ministry of health 41.2% of the Pakistani
population cannot afford procuring medicines due to high prices in the country.
In the biotechnology sector, Pakistan has initiated manyprograms. It is planning to set up
biotechnology plant worthprograms. It is planning to set up biotechnology plant worthRs.400
million to meet the growing needs of qualityRs.400 million to meet the growing needs of
qualitymedicines in the country.
The move is being taken in the field of medicine by theprivate sector in collaboration with
investors The plantprivate sector in collaboration with investors The plantwould start production
within the next few years. Severalwould start production within the next few years.
Severalcountries have expressed keen interest to invest in Pakistancountries have expressed keen
interest to invest in Pakistandue to the pro-active policies of the government.
haveWhile substantial increases in public sector spending havebeen witnessed in recent years.
toSome major public sector programs have been initiated toaddress the healthcare needs of the
population. Theseaddress the healthcare needs of the population. These include:
The National Program for Family Planning and Primary Health Care.
The Expanded Immunization Program.
National Program for Hepatitis Prevention
National Tuberculosis Control Program.
National Malaria control Program.
10. 9
National HIV/AIDS Control Program.
Women's Health Program.
The government has also formed a policy recently The government has also formed a policy
recentlyallowing companies to produce raw materialsallowing companies to produce raw
materialslocally. Companies in Pakistan rely heavily onlocally. Companies in Pakistan rely
heavily onChina, India, Germany, UK and Japan for rawChina, India, Germany, UK and Japan
for rawmaterial imports.material imports.
5. COMPANIES OPERATING IN PAKISTAN
There are 30 multinational and 334 national/local pharmaceutical companies in Pakistan.
TOP 30 COMPANIES OPERATING IN PAKISTAN
1 Glaxo Smith Kline 16 Werrick
2 Abbot+Knoll 17 Wilson
3 Pfizer 18 Getz
4 Aventis 19 Highnoon
5 Novartis 20 Barret Hodgson
6 Merck Marker 21 ICI
7 Searle 22 Reckitt Benkiser
8 Wyeth 23 Platinum
9 Roche 24 Macter
10 Bristol Myers Squibb 25 Janssen
11 Hilton 26 Eli Lilly
12 Sami 27 Schering AG
13 Ali Gohar 28 CCL
14 Merck Sharp Dohme 29 Bosch
15 Nestle 30 Himont
11. 10
Direct
Indirect
6. BENEFITS OF LOCAL PHARMA MANUFACTURING SECTOR
6.1. DIRECT
Self-Reliance.
Foreign exchange saving.
Employment generation.
Employment for Females.
Skill Up gradation.
FDI.
Transfer of Tech. & Know How.
Critical Support in Man Made & National
disasters.
6.2. INDIRECT
Indirect employment.
Investment.
Skill Acquisition.
Technology Spillovers.
Brain Drain Reversal.
7. GROWTH OF PHARMACEUTICAL INDUSTRY IN THE ECONOMY OF
PAKISTAN
The growth of the country's pharmaceutical
industry has dropped from approximately
16 percent per annum to around eight
percent per annum which is a cause of
concern not only for the industry but
government as well. Industry sought a
predictable and transparent regulatory
environment which included a proper
system for registration of drugs and clearing up the ever-increasing backlog.
The pharmaceutical industry in Pakistan is subject to the most stringent regulatory
control, in particular price controls. This is the reason companies are leaving Pakistani
market as 10 years ago there were 36 MNCs operating in Pakistan and today there are
just 24.
The latest company to exit Pakistan was Johnson & Johnson. 'Their "sutures"
manufacturing facility has been shut down and the product is now imported from Dubai
at a higher price. The result is loss of investment, precious jobs and increase of the import
bill.
12. 11
8. PROBLEMS TO THE PHARMACEUTICAL INDUSTRY OF PAKISTAN
Power shortage.
Lack of trained manpower.
Difficulty in export.
Lack of new technology.
Changing political and economic policies.
Bad law and order situation resulting in lower
investment.
Higher interest rate.
Terrorism which reflects foreign investors.
9. IMPACT OF PHARMACEUTICAL INDUSTRY
The developing country like Pakistan, where one
percent of the population suffers from severe and
10 per cent from mild mental disorders and the
social issues of depression and anxiety are
manifold.
The prevalence of depression in the general
population in Pakistan has been reported to be
from 10-25 percent in males and 25-66 percent n
females and the total population suffering is 60
percent depression, 14.5 percent schizophrenia, 29 per cent psychosomatic disorders.
The unavailability of high quality, safe and efficacious drugs will pave way for
counterfeiters, black marketers and spurious drugs to flood the local market. This will
endanger the lives of many patients putting at risk their health and treatments.
13. 12
10. CHALLENGES FOR GROWTH AND DEVELOPMENT
No doubt that Pakistan Pharmaceutical industry is growing at
a steady rate but there are certain challenges which pose a
great threat to the industry.
The first major challenge which the Pharma Industry
faces is the total government control on the prices of
all the enlisted products.
Import of raw material which costs a lot of precious
foreign exchange.
Rapid devaluation of the rupee against the major currencies, due to which the profit
margins are shrinking.
Increasing cost of manpower and energy.
Low R&D expenditure, which can lead to the suffering of masses for not conducting
sufficient research on the newly emerging disease in the Pakistani environment.
Political instability is another major factor which is emerging as the major challenge to
the pharma Industry, because of discontinuation of the policies.
Last but not the least, the deteriorating law and order situation, due to which most of
companies have suffered in terms of sales and also lack of reach to the customers in the
affected areas.
Market access is challenging and operational risks are high.
14. 13
11. NEEDS TO BE DONE
Synergies the strength of Pakistan Pharmaceutical Industry and Publicly funded R&D
institution.
Create an enabling infrastructure and linkage to facilitate Pharmaceutical Industry to
improve process technique.
Stimulate skill development of Human Resource in Pharmaceutical R&D.
Enhance nation’s self-reliance in drugs and pharmaceuticals, especially in areas of
national health requirements.
Provide technical support to pharmaceutical companies for export.
15. 14
12. CONCLUSION
Pharmaceutical sector is one of the most developed hi-tech sectors in Pakistan The growth of the
country's pharmaceutical industry has dropped from approximately 16 percent per annum to
around eight percent per annum which is a cause of concern not only for the industry but
government as well. There is a need of publicly funded R&D institution. Pakistan has to create
an enabling infrastructure and linkage to facilitate Pharmaceutical Industry to improve process
technique. It is needed to stimulate skill development of Human Resource in Pharmaceutical
R&D and to enhance nation’s self-reliance in drugs and pharmaceuticals, especially in areas of
national health requirements. Providing technical support to pharmaceutical companies for
export is also necessary.
