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Pharmaceutical Industry of Pakistan

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Muhammad Talal

on 14 April 2010

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Transcript of Pharmaceutical Industry of Pakistan

Issues in Import & Export Absense of Raw Material Industry
Poor Quality of Products
Cost of Production
Location of Plants Doctors' Perspective Doctors prescribe more MNC Products
Doctors' awareness about various drugs & their efficacies
Local & MNC medicines: quality, effectiveness & price
Differing prescription patterns
Patients' opinion about prices of local vs. MNC products
Availability of smuggled / fake drugs Factors Affecting Profitability better research & development
new product registration process
local manufacture of raw materials
business process reengineering
better quality controls
lack of bioavailability tests
strict price controls
depriciating exchange rates
rising cost of utilities
political uncertainities Government Role & Policies FBR has recently REJECTED a proposal from
Ministry of Industries & Production to grant an
Income Tax exemption of 15 years to Bio-Tech
based Pharmaceutical Industry.

Also price policy of pharma industry is very confusing. A price increase of 9.5 - 10% accross the board was allowed in 1991. With 32 MNCs & 178 local pharma companies, and cost of ra material & local imported medicine increased, cheaper & low quality medicine are mostly smuggled from Sri Lanka, Burma, Iran & India. SWOT ANALYSIS strengths Weaknesses Opportunities Threats heavy investment of $1.3b
saved $3b in foriegn xchange
fulfills local requirement
23% export growth rate
incentives on imports price freezing since 2001
no tax or r&d incentives
imported raw material
lack of resources
registration process low price strategy
taking o'er expired patents
quality improvement costs
contract manufacturing
merger with chinese firms TRIPS agreement
patents implementation failure
inconsistent policies
low funds for plant upgradation
lack of r&d facilities
high costs of inputs
discriminatory policies RECOMMENDATIONS aspirin disprin paracetamol GSK Pfizer Abbott Disease CANCER olanzapine acamprosate calcium trihexyphenidyl dextroamphetamine lisdexamfetamine dimesylate
Govt should increase pharma product prices
Measures to ensure international standard
Companies should observe patents strictly
Increase investment in R&D
Innovation & technology should be encouraged
Biotech Pharmaceutical manufacturing plants should be installed
Growth Trend in Imports & Exports 80% of local requirements are fulfilled
95% of raw material imported from China, India, Japan, UK etc
Pakistani companies are small as compared to those of India
Rs. 11b invested in last 3-4 years in pharma industry locally
6-7% growth rate and employment to about 8000 people exports imports expected at $600m by 2010
past exports $85m
1/3rd consumption imported
major imports from China
15% imports from India
DIAMOND MODEL Factor Conditions Demand Conditions Related & Supporting Industry Human Resource
Machinery
Infrastructure Increase in Population
Epidemics
Health Sector Awareness
Psychological Problems
Religion & War
Foreign Demand
Sugar Industry
Packaging Industry
Chemical Industry
Engineering Industry
Pharmacies & Retailers Tarriffs & Incentives on imports SRO Raw Materials Non SRO Raw Materials Finished Products Customs duty 10% on Import Value
Other charges average 5% on C&F Customs duty from 10% to 25% on Import Value
Other Charges Average 5% on C&F
Customs Duty 10% on Import Value
Other Charges 5% average on C&F
on exports Federal Board of Revenue (FBR) Export Rebate to Cover Duties paid on Imported Items
Export Refinance Facility Trade Development Authority of Pakistan (TDAP) 50% subsidy on product registration
25% freight subsidy
Trade delegation travel subsidy: 50% airfare and US$100 per day when visiting with trade delegations
Hiring of 3 medical reps in an exporting country
International exhibition subsidy
Organization of yearly Healthcare Expo exhibition in Karachi
Currently providing warehousing facility in Kenya

Why Investors Losing Interest? price freeze law & order high costs due to branding dominated by MNCs highly regulated extremely technical high research required political risk poor regulatory system Overview of Pharmaceutical Industry Global Pharmaceutical Industry Pakistani Pharmaceutical Industry 400 manufacturing units including 25 MNCs
meets 70% of home-demands
market share is almost evenly divided
exports to over 90 countries
industry worth $1.8b & growth rate of 13%
leading 20 companies contribute 61.4%

Muhammad Talal Shafaque Shabbir Nimra Anjum
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