By Sheraz Ahmad Choudhary
Pakistan’s pharmaceutical industry is a paradox. It is among the most strategically vital sectors in a 240 million-strong country, providing basic medicines at a relatively low price. Still it is a fringe player in the global markets. Even with over 600 pharmaceutical manufacturing companies and decades of experience in the generic medicine business, Pakistan has been dragging its heels in pharmaceutical export with less than half a billion dollars annually. This number is not only disappointing but is also economically unjustifiable when compared with regional counterparts.
The pharmaceutical business in the world is growing at a high rate due to ageing population, increasing chronic diseases and rising demand of low-cost generics in developing nations. Pakistan is in a good position to take the advantage of this trend. It boasts of a sizeable domestic manufacturing footprint, cheap labour, geographic closeness to Central Asia, the Middle East and Africa as well as long experience of branded generics production. However, less than 2% of the potential, which the sector boasts of, has been exported. The causes are deeply entrenched in the weaknesses in the regulations, lack of quality infrastructure, reliance on imports and lack of an export-focused approach.
The regulatory regime is Pakistan is the main issue. The Drug Regulatory Authority of Pakistan, which was set up to provide safety, quality and pricing control, has not been able to develop into a credible regulator. The drug approval process is lengthy and erratic and takes a year to complete on an average. And, the price policies have been based in the past on improvised freezes that make business less viable.
Such uncertainties have deterred investment, slowed down product introductions and even caused multinational companies to pull out of the market. Worse though is the fact that the regulatory system in Pakistan is not recognised internationally. The nation has not reached the WHO Maturity Level 3; does not feature in the Pharmaceutical Inspection Co-operation Scheme (PIC/S); and lacks a manufacturing plant that is certified by the US FDA and the European Medicines Agency. It goes without saying that Pakistan’s pharmaceutical products cannot enter the high-value regulated markets without these credentials.
The second problem is quality compliance. The majority of manufactures in Pakistan fail to comply with the Good Manufacturing Practice standards accepted internationally not because they are unable to do so, but because upgrading facilities are costly and non-sponsored. What Pakistan only offers is a WHO-prequalified medicine – something that is more than contrasting with the competitors in the region who have invested much more in quality assurance and certification. The lack of globally-recognised testing labs turns the situation even worse, as companies are forced to send them to foreign testing laboratories in order to have them validated at this cost and thus delay export. Quality is not a selling point in the international pharmaceuticals.
The path forward is clear. Pakistan should emphasise regulatory credibility by enhancing the technical capacity of DRAP; complete digitisation of the approval process; and ensure that drugs produced in the country are internationally comparable.
Most importantly, Pakistan requires long-lasting coordination between the public and the private sectors. There can be a long-term pharmaceutical competitiveness or an export council to create consistency in the policies. It will help stir investors’ confidence too.
The author is an economist based in Islamabad. He can be reached at sherazahmad0033@gmail.com
