Pakistan’s pharmaceutical exports hit three-year low of USD319m in FY26

KARACHI: Pakistan Pharmaceutical Manufacturers Association (PPMA) has reported that the country’s medicine exports hit a three-year low of USD319.01 million in the fiscal year ended June 30, 2026 (FY26), recording a sharp 30 percent year-on-year decline.

The decline was largely attributed to a halt in the sale of locally manufactured medicines in Afghanistan markets following the closure of the country’s border with Pakistan.

The medicine export in the preceding fiscal year (FY25) had soared by a two-decade high growth rate of 34 percent to USD457.45 million.

Talking to Business Recorder, PPMA former chairman Tauqeer Ul Haq said Pakistan’s border closure with Afghanistan had caused the country’s overall pharmaceutical exports to reduce by around 30 percent in FY26.

“Afghanistan had remained one of the single largest destinations for Pakistani pharmaceutical exports, accounting for 42 percent of the country’s total drug exports valued at USD457.45 million in FY25,” Haq said, recalling the border with the neighbouring country had remained closed via the land route since October 2025.

“Had exports to Afghanistan remained uninterrupted and the supply chain remained smooth, Pakistan’s pharmaceutical exports would have increased by 20-25 percent in FY26, surpassing the export earnings recorded in the previous year [FY25].”

On the other hand, the export of therapeutic goods - including pharmaceuticals, surgicals, food supplements, medical devices, and nutraceuticals - dropped to USD771 million in FY26 from USD990 million in FY25, according to PPMA.

Pakistan’s overall exports declined by 6 percent to USD30.13 billion in FY26 compared to FY25, it was learnt.

Secondly, Haq maintained, the surge in oil prices amid the US-Iran conflict had driven up transportation costs, disrupting the pharmaceutical supply chain and raising the cost of medicine exports.

“This, in turn, made Pakistan’s pharmaceutical exports less competitive in several low-margin markets, making pharmaceutical manufacturers unable to export to the loss-giving destinations. This is another reason for the 30 percent dip in medicine exports to the world in FY26.”

The Middle Eastern geopolitical situation had also delayed shipments to some of the viable export destinations, via land and air routes both, contributing towards slowdown in medicine exports to the world, he added.

PPMA seeks govt intervention

To revive medicine exports in such challenging times, PPMA former chairman suggested Pakistan’s government should engage with its Afghan counterpart to facilitate the resumption of pharmaceutical exports, help meet healthcare needs in Afghanistan, and ensure continued access to essential medicines even when border closures remain in place due to security threats.

“The United Nations’ charter says the supply of medicines should continue in the war regions to serve and save humankind. This is also evident from the fact that Pakistan has continued to import raw material for medicines from India despite the latest episodes of conflicts between India and Pakistan that took place in 2025,” Haq said.

Moreover, he continued, the government should support pharmaceutical companies in expanding exports to markets where Pakistani firms already have an established presence including in Sri Lanka, CIS countries, Far East, Vietnam and Cambodia.

Usually, registering new medicines in these export markets is a lengthy process. Regulatory authorities also often take considerable time to visit Pakistan to inspect manufacturing facilities before granting approval for pharmaceutical exports.

The government of Pakistan should constitute a committee comprising officials from the Ministry of Commerce, the Trade Development Authority of Pakistan (TDAP), and representatives of the pharmaceutical industry. The committee should facilitate official delegations to key export markets to engage with foreign authorities at the government-to-government (G2G) level, with the aim of expediting medicine registration processes and facilitating timely inspections of Pakistani pharmaceutical manufacturing facilities by importing countries, he said.

To revive and support Pakistan’s pharmaceutical exports, PPMA former chairman said the federal cabinet should formally notify the establishment of PharmaEx Pakistan, an independent trade body comprising government officials and representatives of pharmaceutical companies.

He said the proposal had already been discussed and received approval from the Ministry of Commerce in mid-2025.

The body would operate under the ambit of the TDAP.

Haq said India had established a similar trade body around 15-20 years ago, which helped drive a significant expansion in its pharmaceutical exports, reaching around USD30 billion annually.

He said the State Bank of Pakistan (SBP) should allow pharmaceutical companies to keep a bigger chunk of their export earnings in foreign currency to support expanding exports.

“SBP should increase the foreign currency retention to 35 percent to strengthen their presence and accelerate sales in overseas markets.”

Currently, pharmaceutical companies are allowed to retain 15 percent of their export proceeds in foreign currency to get their brands registered and effectively market them in overseas markets. The firms get the rest of 85 percent export earnings in local Pakistani currency.

Copyright Business Recorder, 2026