EDITORIAL: Commerce Minister Syed Naveed Qamar’s vision of raising pharmaceutical exports to $1 billion by 2025 and $5bn by 2030 is fundamentally correct; though he would of course know that it’s hardly a novel idea, and such plans haven’t yielded desired results so far.
The last most spirited push came from Imran Khan’s administration, when the then prime minister himself wanted to elevate the industry to a proper sector and one of the country’s leading export earners. That was in the thick of the Covid days, when international trade was jammed yet Pakistan’s economy continued to function better than others.
But soon enough the government’s political survival grabbed all its attention and the pharma industry was badly destabilised by the double whammy of a weaker rupee pushing up input costs and the new government refusing to pass any burden onto consumers for purely political reasons amid record inflation.
Moreover, import curbs announced by the incumbent government in view of falling foreign exchange reserves also added to the woes of pharma sector. Factories were forced to cut back production to the point that medicines, even life-saving ones, started disappearing from the shelf.
Now, however, the close shave with default and the desperation to increase export revenue has forced the commerce ministry to pull this smart idea out of the closet once again. Indeed, the $1.8 trillion global pharma market, with five percent annual growth, is ripe for Pakistan to exploit. Rising demand across Africa, especially, and Pakistan’s capacity for excess production once the IMF programme stabilises the exchange rate, means it’s now just a political/diplomatic matter of moving the right pieces on the board at the right time.
Since the commerce ministry has taken the lead in going down this road once again – much to the glee of the industry, naturally – it can be safely assumed that it would be filling in the political blanks right now. Increasing revenue to $1bn in two years and $5bn in seven is a tall claim, and requires a lot of homework.
Let’s not forget that the new standby arrangement with the IMF is a very small lifeline, and the situation is still very serious. Its conditions, like the failed EFF’s (Extended Fund Facility’s) will no doubt rule out any industry-specific support from the government. So all it can do is cement diplomatic/commercial deals and give the industry enough incentive to ramp up production despite biting input costs.
A very important point, therefore, was that the minister stressed the significance of local production of APIs (Active Pharmaceutical Ingredients) to reduce dependence on imports. If this issue had been taken care of before, the industry would not be so dependent on imports for its ingredients and therefore would not have been so badly rattled by the rupee’s dramatic collapse and biting import restrictions. Plus, it is essential to ensure easy public access to affordable medicines before going fishing in the international market.
A repeat of the recent past, when a breakdown in communication between the industry and DRAP (drug regulatory authority of Pakistan) forced a shutdown of production of a lot of medicines, will derail this process completely, perhaps irreparably. So will the old practice of a new administration throwing all initiatives of the previous one out the window should things not change after the election.
Nobody needs to be reminded that Pakistan is at a very serious crossroads at the moment. The pharma export potential is one of those opportunities that we have allowed to go begging many times before. This is exactly the kind of mistake we cannot make any longer.
And whether or not we learned anything from this particular bad habit will become clear very soon, when the present administration gives a clearer version of its vision before an election is called and everybody finds out if the next one sticks to it or not.
Copyright Business Recorder, 2023