“Import of raw material for Remdesivir faces tariff anomaly”
Osman Khalid Waheed is the CEO of Ferozsons Laboratories Limited. He joined the company in 1993 after obtaining his undergraduate degree from Harvard University, USA. He worked in logistics, sales, and marketing functions before assuming the role of company president in 1999.
During this period, the company expanded its portfolio of medical solutions for critical diseases by forging alliances with a number of leading international partners including the Boston Scientific Inc., USA, the world’s leading manufacturer of medical devices; a joint venture with the Bagó Group of Argentina to establish BF Biosciences Limited - Pakistan’s first biotech pharmaceutical manufacturing company; and Gilead Sciences, Inc. USA for its range of Hepatitis C and anti-viral therapies to name a few.
Waheed is currently serving on the boards of a number of organizations including IGI Insurance, Lahore University of Management Sciences (LUMS), Nestle Pakistan Limited, and has previously served on the boards of Trade Development Authority of Pakistan (TDAP), Pakistan Industrial Development Corporation (PIDC), and as President of the Rawalpindi Chamber of Commerce and Industries.
In this interview, in addition to speaking about the issues ailing the sector, Mr. Waheed talks about Ferozsons’ agreement with Gilead for the manufacture of Covid-19 treatment drug, Remdesivir, in Pakistan. Edited excerpts follow:
BR Research: Pakistan imports most of the active pharmaceutical ingredients from India and China, which has been affected not only because of the trade embargo but also by the coronavirus pandemic. What is the current situation regarding the availability of APIs?
Osman Khalid Waheed: Not just Pakistan but the entire world, including the largest economies, depend on APIs from India and China. It is unfortunate that trade embargos are placed on materials that directly affect public health, as the only one to suffer from these situations are the sick patients.
BRR: Why can't the pharmaceutical firms in Pakistan manufacture these raw materials?
OKW: The coronavirus pandemic has exposed systemic weaknesses in health systems worldwide. In Pakistan, our biggest weakness lies in the dependence on imported raw materials and vaccines. In both these areas, the industry will require support to scale up, not in terms of subsidies but tariff protection and purchase assurances (particularly for vaccines). Both India and China supported their raw material industries under strong tariff protection backed by state purchase assurances.
BRR: Coming to the manufacture of Remdesivir, the production process is apparently quite complicated because a number of raw materials go into a tightly controlled process. What will be your raw material procurement process? Has Gilead connected Ferozsons and its subsidiary with any of its international partners?
OKW: Ferozsons is among the 5 generic drug manufacturers around the world selected by Gilead to manufacture Remdesivir for rapid distribution in developing countries. According to the agreement, we are mandated for supply to a list of 127 countries, in which all licensees can compete to ensure there is reasonable competition along with quality assurance for the drug.
Remdesivir is a complex product in terms of its stability and solubility. One of the reasons why Gilead moved so quickly to license the product and transfer technology to licensees in India and Pakistan (within 2 weeks of FDA’s emergency authorization) was to ensure that patients in the developing world have timely access to quality-assured product, and are not subjected to sub-therapeutic treatments in the middle of a pandemic. As the innovators of the drug, Gilead’s product and process have been fully tested and validated for stability, safety, and efficacy. The technology transfer - which Gilead has provided royalty-free during the pandemic period - allows us to rapidly scale production and compress timelines while ensuring the highest quality standards. Our raw material is sourced exclusively from Gilead-licensed suppliers.
BRR: What kind of tech transfer is going to take place in lieu of this partnership?
OKW: Gilead has provided its licensees with a full technology transfer to manufacture and test the product according to the innovator’s specifications. This is especially important in the context of the pandemic, as it allows us to quickly ramp up production while producing a reliable, quality-assured product.
BRR: There are two different dosages of Remdesivir. What dosage has been sanctioned for Pakistan?
OKW: Remdesivir is available worldwide in 20 ml liquid injection vials, as well as in freeze-dried form, to be reconstituted for injection. Both forms are substitutable for each other and have been licensed in Pakistan.
BRR: How is it priced globally? What would be the estimated retail price of the drug in Pakistan?
OKW: As announced recently, Gilead’s branded Remdesivir (Veklury) has been priced at $520 per vial for patients with private insurance, and $390 for those with government insurance programs. In Pakistan, the price for Remdesivir has been set at Rs10,873 per vial. Our brand of licensed Remdesivir (Remidia) will also be available at this price.
BRR: What kind of government support do you need or have received for the production as well as export of Remdesivir?
OKW: We have not received any government support for production or export of Remdesivir. In fact, there is currently a tariff anomaly that taxes the raw and packing materials for Remdesivir while imported finished products are allowed in free of duties and taxes.
BRR: From the procurement of raw material to the availability of the drug - what is the lead time, time to manufacture, and time to market?
OKW: At the time of receiving Gilead’s license and technology transfer in May 2020, we had announced that we would be able to launch the product within 6-8 weeks of receiving the manufacturing permission from DRAP. This is the minimum time required to arrange materials, produce validation batches, and ensure that the product is stable and safe for use by Covid patients. DRAP’s permission was granted on June 22, 2020, and we are on target to make the product available within the stated period.
BRR: How have pharma sector imports reacted to the coronavirus pandemic; and how are exports holding up?
OKW: The pandemic has disrupted the global supply chain, leading to shortages of medicines. At the same time, demand has also been significantly constrained by the fall in hospital outpatient visits and clinic consultations. Elective procedures have also reduced drastically because of fears of infection among healthcare providers and the general population. Exports have also faced challenges for the same reasons. However, there is a clear opportunity for Covid-related exports.
BRR: Hoarding and artificial shortage, or the actual shortage of drugs - what is a real challenge in this pandemic?
OKW: The sector faces challenges on both fronts. For example, within hours of media reports on the possible efficacy of hydroxychloroquine in treating Covid-19, not only did the product disappear from pharmacy shelves within hours, its raw material prices also went up by nearly 10 times in a week, and is still 4-5 times more expensive compared to its pre-Covid price. As a result, it has become unviable to manufacture, and patients for its approved indications - such as those inflicted with rheumatoid arthritis and certain other autoimmune conditions - are suffering from its shortage.
Hoarding occurs due to panic, and opportunistic middlemen try to profit from the situation. This is a global phenomenon that was seen not just in case of medicines but also in the case of masks and PPEs. It is important for government authorities to stockpile essential items in preparation for emergency situations such as the Covid-19 pandemic. DRAP’s pricing policy also lacks the flexibility to respond to sudden fluctuations in raw material costs. This often results in protracted drug shortages, worsening the suffering of patients who are forced to resort to smuggled or counterfeit products in the absence of locally registered drugs.