LAHORE: While the Covid-19 pandemic has paralyzed the national economy, only food, pharmaceuticals and a few other services remained functional.
The pharmaceutical sector registered growth and proved to be the only sector that helped the national economy during the pandemic.
According to the Pakistan Economic Survey 2019-20, the pace of contraction diminished in the pharmaceutical sector. It registered 5.38 percent decline during July to March in FY-2020 as compared to 8.66 percent decline in the corresponding period. Similarly, the sector recorded the highest sales in March while it fetched $1.3 million Foreign Direct Investment in April 2020. However, the provisional GDP growth rate for Financial Year 2020 is estimated at a negative growth of 0.38 percent.
Given this situation, the government took few steps to boost industrialization in FY2020 and announced several packages. The government is also providing subsidies and incentives to the industrial sector. But, the pharmaceutical sector demands stable policies from the government instead of special grants and packages, industry sources said.
It is worth mentioning that the pharmaceutical sector has the capacity to make Pakistan come out of the economic crisis in this difficult situation. Once the textile industry was leading exports of the country but now the pharmaceutical sector has been identified as the sector that could enhance the country's exports to boost the country's foreign exchange reserves.
Pakistan's pharmaceutical industry is an essential, high technology and a strategically important industry. Hence, at the present growth rate the market size for pharmaceuticals will double in the next 10 years in Pakistan, industry sources said, adding: "Mckinsey & Company in a report commissioned by the Planning Commission of Pakistan and Asian Development Bank identified the pharmaceutical industry as sunrise industry."
According to the report, the pharmaceutical industry can lead Pakistan to economic prosperity should there be sound legislative reforms. The report cites four main areas for the government to focus to enable growth of the sector: Price (Reform pricing to support public health and industry performance); FDA (Incentives to invest in FDA-quality plants and gain access to largest export markets); Production (Allow contract manufacturing without limitation); Quality (Set high and uniform quality bar and enforce it).
It is pertinent to mention here that the Pharma industry employs 0.5 million people directly or indirectly and it can become the biggest employer of the country with millions of jobs for skilled and unskilled people.
"The government needs to synergise the strength of the pharmaceutical industry and create an enabling infrastructure as Pakistan has the strongest pharma industry in all Muslim countries. The urgent needs of the industry are tariff rationalization, trade-related investment, institutional reforms and easing of business regulations," the industry sources added.
Copyright Business Recorder, 2020