Pharma exports 1HFY17

Relevant to earlier discussion on drug pricing (See column, Access to medicines) is the issue of falling pharmaceutical exports. According to the latest PBS numbers, pharma exports for the half year ended FY17 are down 30 percent year-on-year in volume terms, but up just one percent in dollar terms.

Despite such a massive fall in volumes, there has been some growth. BR Research has reported in the past that this is because of high-value drugs i.e. anti-cancers, antibiotics, etc. (Pharma exports: Not good enough, published December 28, 2016). However, Pakistan Pharmaceutical Manufacturers Association Chairman, Dr. Sheikh Kaiser Waheed, told BR Research that the fall in volume has been due to small players losing out; these small players were selling generics at lower prices in bulk, whereas now the larger, branded players remain.

DRAP doesnt regulate exports, so pharma manufacturers can get a better price from outside Pakistan. However, the Chairman PPMA highlighted inefficiencies in DRAP that have hindered the industry's exports. He said there are unnecessary delays and fees that werent there before DRAP (i.e. before 2012, when there was only the Ministry of Health). Moreover, the Chairman is of the view that the deregulation of pricing is the only way to ensure growth in exports, as better pricing will enable pharma manufacturers to invest in good manufacturing practices and meet international standards.

At PRIMEs seminar last week, it was highlighted that pharmaceuticals are a Rs300 billion market in Pakistan, 40 percent of which is accounted for by 22 multinationals. These multinationals are fast losing interest in Pakistan. Moreover, it was highlighted that India has 150 FDA-approved plants and even Bangladesh now has four. This number remains zero in Pakistan.

The country has immense potential to take its pharma exports up. For now, our markets are restricted to the semi- or unregulated countries such as Afghanistan or African countries. The industry needs to invest in its manufacturing practices to meet international certifications and compliance. This would not only give us access to more markets for exports, but would address the longstanding issue of substandard drugs in Pakistan as well. For that to happen, there needs to be less regulation/ some middle ground in drug pricing.