Pakistan's Pharmaceutical Industry

By Wahid, Khalid | Economic Review, February 1990 | Go to article overview

Pakistan's Pharmaceutical Industry

Wahid, Khalid, Economic Review

Pakistan's Pharmaceutical Industry is in dire straits. Sick and near unto death. Since partition the industry consisting of about 200 manufacturers, large and small, National and Multi-National has gradually built up to near self-sufficiency with Investment of about Rs. 2,000 millions, Production of nearly Rs. 10,000 millions, Foreign Exchange Savings of nearly Rs. 6,000 Millions, Direct Employment of over 20,000 Highly qualified and trained specialist personnel and further indirectly providing livelihood of over 200,000 people in ancillary and associated industries. Over the last several years, through misguided policy, obdurate bureaucracy, over-regulation and destructive inaction, the industry has been stricken and brought to the point of imminent collapse.

Action Required

Prices, long frozen must urgently be re-adjusted, across the board to reflect current exchange rates and increased costs since any last price adjustment.

After an immediate life-saving overall adjustment, a reasonable and realistic pricing formula should be adopted which can be self-regulating and free from bottle necks and delays, thus removing from Government the unpopular onus/odium of discretionary price fixing as well eliminating potential corruption, implementing plank 15.3 of the Pakistan Peoples Party Manifesto. Companies and prices may be monitored and/or audited to ensure faithful adherence to the formula. A fair pricing formula has been prepared by PPMA and submitted to the authorities for consideration. This formula will not only free up the industry from the shackles of bureaucracy but will also result in an overall retail price structure that will be amongst the lowest in the world.

In keeping with the elected Government's Manifesto, Policy and Mandate towards Deregulation, Openness and Elimination of Corruption, it is strongly recommended that an Autonomous Authority be set up to administer Drug Policy and remove it from strangling bureaucratic controls. Qualified representatives of PPMA be included on the board of such an Autonomous Authority.

In the meanwhile, till the Drugs Act can be amended to set up such an autonomous agency, at least one nominee of PPMA be immediately appointed on each of the Ministry of Health Boards and committees concerned with the Drug Industry i.e. the Registration Board, Pricing Committee and the Appellate Board. (This can be done immediately without any amendment or change in the Drugs Act or any Laws).

PPMA has developed a fully detailed price formula which can well provide a good basis for establishing an equitable, non-discretionary, non-arbitrary, reasonable price formula, once and for all. Several excellent studies have already been made by various bodies, authorities and committees specially appointed by Government and by the Peoples Health Committee, independently as well as based on this PPMA Suggested Price Formula but despite a reported consensus or general agreement amongst all no action nor step seems yet to have been taken to implement this and instead a highly discriminatory "case by case" basis continues to be adopted and most members of PPMA whether Multi-national or Pakistani continue to suffer. Worse is the fact that despite best intentions and avowed policies of the democratically elected Government, considerable odium and disrepute is discrediting all the good work being done otherwise, getting the Ministry of Health a bad name and reputation.

This situation can be and ought to be rectified immediately for the survival of the industry and for the good name and credibility of the Government. In the past few years over-all inflation has affected every single cost element of pharmaceutical products. Labour, electric power, gas, water, freight, exchange rates and each and every raw and packing material, whether local or imported has been effected by cost/price increases ranging from about 100 per cent to over 200 per cent. …

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