Multinational pharmaceutical companies are reluctant to make further investments in county due to non-functioning of the Drug Regulatory Authority of Pakistan (DRAP), industry representatives said. Talking to newsmen, on Tuesday at Pharma Bureau's office, Chairman Pharma Bureau (PB), Shahab Husain Rizvi, expressed reservations over the lack of proper pricing mechanism, saying routine matters pertaining to licensing, pricing and registrations are bottlenecked due to government's least interest.
"It seems that government is indifferent to address problems of pharmaceutical industry," he said, adding that DRAP has been apparently ineffective since its inception, making difficult for multinational companies to invest in Pakistan. He said that companies had made substantial investments in establishing, expanding and upgrading their facilities. However, he said MNC investment has fallen from Rs 14 billion to Rs 4 billion during last three years. "Several MNCs have already shut their operations and moved their investment to India and Bangladesh," he informed.
Rizvi said Pakistan's pharmaceutical industry was an essential, strategically important and high quality industry, having an estimated annual turnover of approx. $2.1 billion. "In 2010 the industry was identified by McKinsey as one of 3 potential "sunrise" industries which could significantly leverage industrial growth as well as exports for Pakistan," he told newsmen.
At present, he said country's pharmaceutical exports stood at USD 190 million whereas India's exports were USD 15.5 billion. In 2013 MNC pharmaceutical companies paid in excess of Rs 13 billion in tax", he said. Co-Chairman, Arshad Saeed Husain, said DRAP, since its set-up two and half years, remains largely un-operational and as a result, routine matters relating to licensing, registrations and pricing are bottlenecked causing significant concerns.
"A healthy regulatory environment will help stimulate investment in the Pharma sector which will lead to setting up of FDA approved plants. Thus far India has 150 FDA approved plants, Bangladesh 4 and while Pakistan has none," he said. Presently, he said Pakistan's IPR regime was weak and provides less than adequate protection to inventions or the rights of inventers, adding that Patent and Trade Mark protection was not available in the county.
"In Pakistan every active drug (1,500) and their dosage forms (over 9,000) were price controlled. This is one of the highest levels of price control in the world. By comparison in India, as of December 2013, only 348 drugs (active substances) are under price control and only 117 drugs are price controlled in Bangladesh," he added. He said non-application of a formula to adjust drug prices annually coupled with an increase in raw material and other manufacturing costs together with the devaluation of the rupee, has severely impacted the viability of the pharmaceutical industry.
As a result, Arshad said companies could no longer afford to manufacture certain loss-making life-saving medicines and this has led to acute shortages of these essential drugs in the market. Expressing reservations he said shortage of drugs leads to flooding the market with counterfeit and spurious medicines, adding that shortages also results in smuggled drugs making their way into the domestic market which are then sold at exorbitant prices.
He said pricing reform would support public health and industry performance initiatives and provide incentives to invest in FDA-quality plants allowing access to the world's largest export markets. Ayesha T Haq, Executive Director Pharma Bureau said that Indian government along with the Indian Brand Equity Foundation (IBEF) and Pharmaceuticals Export Promotion Council of India have set target of $25 billion for pharma exports by 2016. She said there are over 625 pharmaceutical companies registered in the country, adding multinational companies constitutes 45per cent of the total market.