The bigwigs of the pharmaceutical industry are upset with the government. On the one hand, they claim, it has wreaked havoc on local drug manufacturers by passing the 18th Amendment, which turned the health sector from a federal subject into a provincial one.
On the other hand, they say, the government is about to destroy their businesses by lifting trade restrictions that have so far protected local players from their Indian counterparts.
“Out of India’s roughly 25,000 drug manufacturers, only a 100 or so are foreign accredited, with state-of-the-art facilities and standardised, quality products. They produce high-value drugs and export to developed countries only,” said Dr Kaiser Waheed, former chairman of the Pakistan Pharmaceutical Manufacturers Association (PPMA) while speaking to The Express Tribune.
“It’ll be silly to think that those 100 companies will export to Pakistan once Pakistan-India trade barriers are lifted. What Pakistan will be importing in the name of free trade with India is substandard and spurious drugs produced by the overwhelming majority of the pharmaceutical industry of India that is, by and large, unregulated,” he added.
Explaining his argument, Waheed stated that unlike Pakistan’s pharmaceutical industry, which is regulated by a national body called the Drug Regulatory Authority, India’s drug manufacturers operate without a central regulatory framework. “Each state in the Indian federation has its own rules, regulations and regulatory body. Sometimes rules are adhered to, sometimes not. There is no standardisation and no central authority to streamline the pharmaceutical sector.”
While shortages of everyday medicines in Pakistan’s drugstores are not unusual, the fact remains that the country’s pharmaceutical exports have been rising steadily. Although the World Trade Organisation (WTO) says Pakistan’s exports of pharmaceutical products were over $150 million in 2011, the PPMA says they are now touching the mark of $200 million a year.
So how exactly has Pakistan managed to increase its pharmaceutical exports by an annual rate of 7% for the past five years, even though it sometimes fails to meet the local demand?
“Pakistan does not export pharmaceutical products to regulated markets. We export to countries whose pharmaceutical sectors are either semi-regulated or unregulated,” says Waheed.
His bold acknowledgement of the underlying factor that is driving Pakistan’s pharmaceutical exports upwards is backed by revealing statistics. The biggest export destination for Pakistani drugs is Afghanistan, which has a considerably weak regulatory framework. With a share of almost one-fifth in Pakistan’s total exports of pharmaceutical goods to the world, Afghanistan received Pakistani drugs worth $29.1 million in 2011.
It is noteworthy that Pakistan’s pharmaceutical exports to Afghanistan have grown by 30% per annum for the last five years. Sri Lanka, the Philippines, Vietnam and Sudan are other major export destinations for Pakistan-made drugs.
It is mainly the fear of substandard medicines flooding Pakistani drugstores that the pharmaceutical industry is opposed to unconditional easing of trade restrictions with India, says Waheed.
Currently, a large proportion of pharmaceutical products that Pakistan imports every year comes from developed countries with heavily regulated pharmaceutical sectors. Switzerland, Denmark, Germany, Belgium and France are the top five exporters of pharmaceutical goods to Pakistan, according to the WTO.
Drugs coming out of the unregulated pharmaceutical sector of India will replace existing medicines of far better quality if Pakistan eases the trade policy without providing the local industry with a level playing field, says Waheed.
Published in The Express Tribune, October 7th, 2012.