Nasir M. Qureshi is the CEO of Paramount Pharma. He is also the former Vice Chairman of Pakistan Pharmaceutical Manufacturers Association, and the current Chairman FPCCI Standing Committee on Pharmaceuticals.
BR Research had a friendly chat with Mr Qureshi about the pharmaceutical industry of Pakistan - history, structure, pricing, and exports. Below are edited transcripts of the insightful discussion.
<B>BR Research: Give us a brief history of pharmaceuticals in Pakistan.</B>
<B>Nasir Qureshi: </B>Around 30 years back, all pharmaceutical products came from multinationals. There were a handful of local companies that made cough syrups, paracetamol, and other basic items that were being made in bulk. But there were no prescription items as such. Local pharma was a price-based industry limited to 4 to 5 players, whereas more than 35 companies were multinationals. Some of these MNCs didn't even have manufacturing in Pakistan, and they used to import and sell.
Local companies saw growth, and new products became a threat to multinationals. These included firm's that launched research molecules in Pakistan such as Hilton or Highnoon. And as they brought in research from abroad and launched it in Pakistan, the image of local companies started building.
Today, there are almost 700 drug manufacturers in Pakistan, of which multinationals are less than 30. We ended the multinationals' monopoly; unit-wise, local companies have almost 60 percent share in the market (though we have lesser share in value).
<B>BRR: Do multinational pharmaceuticals have any advantage over the local players?</B>
<B>NQ:</B> MNCs price heavily by claiming research expenses, but they're not doing any research in Pakistan. They bring in research from their parent companies, and that too when the patent has almost expired. Their embassies and ambassadors are all involved in the pricing. Hence health authorities have a discriminatory attitude due to the influence of MNCs and their embassies.
International donors - like WHO, USAID, UN - have programs that distribute medicines at grass root levels for free. They have MNCs like Abbott or Pfizer that import from India to sell here. I want to ask multinationals that if they claim that they are MNCs, why are they importing from India? The reason is that they have a lobby. These MNCs don't earn foreign exchange for Pakistan, they just send it abroad. That's how MNCs operate. We are losing tremendous foreign exchange because of them.
Our bureaucracy is dishonest, and our political leaders have no concept of nation-building. When the MNCs approached the Indian government, India told them to bring basic manufacturing and technology of transfer. We seem to have given them a free hand. Therefore they bring no R&D, no ToT, and they just do what they want.
<B>BRR: Tell us about the pricing mechanism and the ongoing issues in the industry.</B>
<B>NQ:</B> There was a pricing mechanism prior to 2001 - SRO 471. More than 90 percent of new molecules that were introduced in Pakistan for the first time were brought by MNCs, for which they got a high price from the Ministry. When we applied for a price, we got the price "as per SRO." This meant that we keep our price less than the brand leader. It was certainly not a good SRO.
In 2001, Ministry increased prices across the board. But then prices froze. Every political government since then has been afraid to increase prices in fear of public outcry. We debated with the Ministry of Health that agreed that prices should increase by 95 percent. Everything was approved and ready, and then the PM said no.
We don't have a price issue; we produce cheaply. We just want respect. I accept that you can't increase the price of everything across the board, but what you do when the Price Review Committee cannot give you the solution when companies increase prices and take stay orders?
<B>BRR: How is the local industry seeing growth in the current regulatory environment?</B>
<B>NQ:</B> We are experiencing volumetric growth because we sell a lot of items at price. About 90 percent of the local market is non-affording, and the brand-conscious lot is just 10 percent. Within the 90 percent, we have improved our unit sales. When you produce more, your cost goes down (economies of scale). That's how our profits are getting better; we're bringing down the manufacturing cost and competing at price.
<B>BRR: There are a lot of reports about counterfeit medicine in Pakistan. What is your view?</B>
<B>NQ:</B> This is propaganda. India and MNCs give the impression that the local industry is counterfeit. We're the ones who broke their monopoly; we're selling the same thing at exponentially lower rates. So, they spend some of their money to spread propaganda against the local players among the doctors and public.
There's a WHO report that claims that 30 percent of the world's counterfeit drugs come from India and that it's a government-sponsored crime! That's because they're still following the 1938 Drug Act. This Act upholds regional standards, meaning there is no centralised control.
In Pakistan there is DRAP, Ministry of Health, centralised standards and controls. In Pakistan, capturing the counterfeit medicine is the government's responsibility. I would like to conclude by asking if someone's ever been caught and brought to the media's attention.
<B>BRR: Tell us about DRAP and its responsibilities?</B>
<B>NQ:</B> DRAP was made with the consent of all four provinces. Price recommendation is DRAP's job, and the PRC (Price Recommendation Committee) is part of it. The pricing is with the Ministry of Health.
Quality control and standards are DRAP's responsibilities. For this purpose there are field officers called Federal Drug Inspectors, who visit regularly. Every company has its inspection documented and registered. The report is signed, and shortcomings are enforced. Every company in Pakistan is inspected at least three to four times annually.
<B>BRR: What do Pakistan's pharmaceutical exports look like? What are some of the issues facing the industry?</B>
<B>NQ:</B> Local companies introduced international research. No multinational is exporting; all the export is being done by Pakistani companies. We went out, explored the market, registered, met regulatory requirements, made a team, marketed there and snatched the market share. It was an expansion. We are exporting to 45 different countries including Vietnam, Philippines, Myanmar, and Sri Lanka. We have a tremendous reputation, and our products are of great quality and reliability.
The number of countries is increasing and our exports have been growing. However, our exports have been suffering of late. We have been aiming to touch one billion dollars in the past three years, but today we're less than $200 million for the first time in history just because of the stringent approach by DRAP. As a result, our export orders have remained stuck as we wait for permission.
We demand that our pharmaceutical exports get a separate committee. There's no vision in DRAP; there's no centralised thinking. All we are asking for is speedy approval. If we get the approvals on time, we can easily reach one billion.
Comments
Comments are closed.