PAKISTAN PHARMA IDUSTRY.

IOBM PAKISTAN

AGENDA

IMPORTANCEHISTORYROLE OF GOVTIMPACT OF WTOCURRENT SITUATIONPROBLEM AND ISSUESREMEDIESCONCLUSIONSFUTURE

Pharmaceuticals

• Pharmaceuticals are substances that are aimed to treat, cure, prevent, or recognize diseases and relieve pains through their applications.

IMPORTANCE : GLOBAL VS PAKISTAN

• Global market size is approx $770-780 bn with low growth of 3-4% in 2009.(http://www.economywatch.com/sector-watch/us-pharmaceuticals.html)

• Canada and USA has 47.7% share.

• Pakistan's $1.61bn market (pharmaceutical(Research

and Markets: Pakistan Pharmaceuticals and Healthcare Report Q2 2010)

Importance Global vs pakistan

Importance Global vs pakistan

Major Players in PAKISTAN

Names Market Share

GSK : RS 703.4 crore (6 months 2009) (http://www.gsk.com.pk/downloads/qtr2_report2009.pdf) 11.60%

Sanofi Aventis: RS 519 crore 9 months 2009) (www.sanofi-aventis.com.pk 4.10%

Getz Pharma 3.90%

Abbott Lab 3.80%

Roche 3.10%

Merck 2.90%Importance Global

vs pakistan

Updated till 2003 http://www.dcomoh.gov.pk/pharma/multinational.php

• There are currently over 400 pharmaceutical manufacturing units registered in Pakistan.

Out Of 316 Units; 90%-------------local pharmaceutical units. 10%-------------multinational owned.

Local Units-----------------------386Multinational Units------------30

Importance Global vs pakistan

Importance Of Pharmaceutical Industry

• Produces medicines and life saving drugs

• Contributes towards GDP (0.16%)

• Generates employment (70,000 directly and 150,000 indirectly)

• Supports Health facilities

Importance Global vs pakistan

Why we chose this industry : It’s a secondary industry and difficult to set up than the rest

Difficult to setup

HOW IT ALL WORKS

Difficult to setup

AGENDA

IMPORTANCEHISTORYROLE OF GOVTIMPACT OF WTOCURRENT SITUATIONPROBLEM AND ISSUESREMEDIESCONCLUSIONSFUTURE

Growth Indicators (Rs. crores)

1965-66 1999-00

Capital Investment 140 2,500

Production: Formulations Bulk Drugs

15018

15,9603,777

Import 8.20 3,441

Export 3.05 6,631

R&D Expenditure 3 320

HISTORY

Historical Background http://www.pharmaceutical-drug-manufacturers.com

Historical Background http://www.pharmabiz.com/article/detnews.asp?articleid=28358&sectionid=50

• At the time of independence there were two small units which were unable to meet the local demand.

• The rest of the medicines were imported.

• The decision taken in 1972 to abolish brand names, restrict availability of essential drugs to 850, fix maximum retail prices across the board and freely allow local manufacturer of all the essential drugs was in fact a life line for the national segment of the industry.

• Due to several reasons, especially inaccessibility of new researched medications this policy was ultimately reversed in 1976.

HISTORY

Historical background http://www.pharmabiz.com/article/detnews.asp?articleid=28358&sectionid=50

• Since 1999 the government has invested US$ 133 million in the pharmaceutical industry.

• The last 10 years have been eventful for Pakistan pharmaceutical industry as they have developed a large number of domestic manufacturers.

• In 2006 there were over 400 licensed pharmaceutical companies in Pakistan, including 30 multinationals who had over 53 percent of market share.

• Today, the industry has developed technology, production and an infrastructure of imports. It's a well regulated industry. It has Domestic companies which are quite confident of doing good business.

HISTORY

AGENDA

IMPORTANCEHISTORYROLE OF GOVTIMPACT OF WTOCURRENT SITUATIONPROBLEM AND ISSUESREMEDIESCONCLUSIONSFUTURE

Role of Government http://www.shvoong.com/medicine-and-health/1810555-importance-pharmaceutical-industry/

• The government has set up an independent Drug Registration and Pricing Authority. In Pakistan the Ministry of Industries decides about the drug pricing.

• In the biotechnology sector, Pakistan has initiated many programs. It is planning to set up biotechnology plant worth Rs.400 million to meet the growing needs of quality medicines in the country.

Role of Government

FACT : Healthcare spending in Pakistan In 2009 is PKR226.5bn

Role of Governmenthttp://www.shvoong.com/medicine-and-health/1810555-importance-pharmaceutical-industry/

• While substantial increases in public sector spending have been witnessed in recent years.

• Some major public sector programs have been initiated to address the healthcare needs of the population. These include:

– The National Program for Family Planning and Primary Health Care– The Expanded Immunization Program– National Program for Hepatitis Prevention and Control– National Tuberculosis Control Program– National Malaria control Program– National HIV/AIDS Control Program– Women's Health Program.

Role of Government

FACT : only 0.7% of the GDP has been allocated for the health sector in 2009 http://southasia.oneworld.net/todaysheadlines/lesser-allocations-for-health-and-education-in-pakistans-budget

Role of Government http://www.shvoong.com/medicine-and-health/1810555-importance-pharmaceutical-industry

• The public sector health development expenditure increased from PKR 4.3 billion in 2003-04 to Rs.6 billion in 2004-2005, and Rs.9.5 billion in 2005-06.

• Ministry of Commerce has given 50% subsidy to pharmaceutical companies for registration of their exported products in foreign countries for export from 1998 to 2003

The government has also formed a policy recently allowing companies to produce raw materials locally. Companies in Pakistan rely heavily on China, India, Germany, UK and Japan for raw material imports.

Role of Government

AGENDA

IMPORTANCEHISTORYROLE OF GOVTIMPACT OF WTOCURRENT SITUATIONPROBLEM AND ISSUESREMEDIESCONCLUSIONSFUTURE

Impact of WTO (from 2005)• Patents

To comply with WTO standards the product should be patented

• PricesIncreased competition lowers the price which would result in low profitability for local manufactures.

Due to product patents rights new drugs could be unavailable or unaffordable.

• CompetitionWhen there would be equal opportunity for other nations to trade their Pharmaceutical products in Pakistan. The competition in the local industry would rise. (India alone can attain 25% of the Pakistani Pharmaceutical market).

WTO IMPACT

Impact of WTO• Development of Health Sector

• Harmonization of standardsGlobally recognized standards will become the benchmark of the Pakistani Pharmaceutical Industry, which would require intensive capital expenditure.

• TRIPS (Trade-Related Aspects of Intellectual Property Rights) AgreementThe TRIPS agreement will push Pakistani companies out of the competition in the new high value generating products. Where Pakistani industry which is a generic manufacturing industry would not be able to bring generic copies of new products for at least ten years.

WTO IMPACT

AGENDA

IMPORTANCEHISTORYROLE OF GOVTIMPACT OF WTOCURRENT SITUATIONPROBLEM AND ISSUES 2010REMEDIES 2010CONCLUSIONSFUTURE

CURRENT SITUATION

2010 EXPORTS

IMPORTS Nearly 95% ( Approx $ 450 million) of the basic raw material used for manufacturing is imported from countries like China, India, Japan, UK, Germany and others.

Health Policy 2010Ministry Of Health And Government

Monday, March 22, 2010Sania Nishtar

• The Ministry of Health along with Government of Pakistan is working on health policy 2010 for planned enhancements in overall health sector by the way of promoting and upgrading healthcare facilities at all tiers.

• Main Features Of The policy are;

1. to improve effective access to healthcare 2. Reduction in communicable diseases3. Good governance at both directorate and agency level

CURRENT SITUATION

AGENDA

IMPORTANCEHISTORYROLE OF GOVTIMPACT OF WTOCURRENT SITUATIONPROBLEM AND ISSUES 2010REMEDIES 2010CONCLUSIONSFUTURE

2010 problems Pakistan Pharmaceuticals & Healthcare Report Q2 2010" Published

• rupee has depreciated against the US dollar• GDP projections have been downgraded, • inflation has increased and• fiscal expenditure has contracted. volatile political and security

situation. • low per-capita spend on pharmaceuticals• year compound annual growth rate of 8.95%, down from 9.39%

forecast in the previous quarter• Pakistan's ambition to become a significant exporter of pharmaceuticals

came under threat in September 2009, after a Ugandan drugmaker sued a Pakistani pharmaceutical manufacturer for supplying substandard goods

2010 scenario

PRICE ISSUES 2010 Research and Markets: Pakistan Pharmaceuticals and Healthcare Report Q2 2010

• Both generic drugs and patented products are subject to price controls. The maximum retail price (MRP) of a medicine is determined using a formula that incorporates manufacturing costs and retail markups. When pricing imported medicines, the cost of freight is also included

2010 scenario

AGENDA

IMPORTANCEHISTORYROLE OF GOVTIMPACT OF WTOCURRENT SITUATIONPROBLEM AND ISSUES 2010REMEDIES 2010CONCLUSIONSFUTURE

REMEDIES AND IMPROVMENTS 2010 Pakistan Pharmaceuticals & Healthcare Report Q2 2010" Published

• health insurance scheme similar to India's insurance scheme for the poor.

• attract foreign patients to the country, encourage the private sector to administer advanced treatments

• healthcare in Pakistan will drive the overall tourism market, resulting in increased national wealth

• November 2009, when the Aga Khan Agency for Microfinance (AKAM) established a healthcare insurance service in Pakistan. The First Microinsurance Agency

CURRENT SITUATION

AGENDA

IMPORTANCEHISTORYROLE OF GOVTIMPACT OF WTOCURRENT SITUATIONPROBLEM AND ISSUES 2010REMEDIES 2010CONCLUSIONSFUTURE

Conclusion(EXTERNAL)• After implementation of WTO regime since Jan 1 st 2005, The WTO

regime may fortify the monopolies of MNCs and make the access of medicines difficult to the poor patients;

• governments can tackle such problems by using compulsory licensing and

parallel import.

• Industry needs strong point of “low priced medicines” and on the other hand it could draw more technology, research & development and foreign direct investment by providing better protection to the patents.

• Industry should go for unusual options such as foreign joint ventures, contract manufacturing and approach towards acquisition of compulsory licensing of patented

Recommendations (INTERNAL) http://www.issuesinmedicalethics.org/pdfs/NBC2005SH.pdf

Dr Sara Hussain fron Agha kahn

• Existing evidence indicates a need to equip physicians-in-training to handle interactions with the industry.

• The need to introduce early and ongoing trainings in ethical concepts, moral reasoning and development of skills necessary to address these issues.

• Registering and regulating authorities in Pakistan have must ensure inclusion of the existing Code of Ethics in undergraduate and postgraduate curricula and should regulate industry collaboration with teaching institutes; developments that are necessary to raise the standard of clinical practice and improve patient welfare.

AGENDA

IMPORTANCEHISTORYROLE OF GOVTIMPACT OF WTOCURRENT SITUATIONPROBLEM AND ISSUES 2010REMEDIES 2010CONCLUSIONSFUTURE

FUTURE

• Healthcare spending in Pakistan is expected to increase from PKR226.5bn (US$2.76bn) in

2009 to PKR257bn (US$2.86bn) in 2010-2011ttp://southasia.oneworld.net/todaysheadlines/lesser-allocations-for-health-and-education-in-pakistans-budge

• pharmaceutical market value PKR206.9bn

(US$2.3bn) in 2014 ((Pakistan Pharmaceuticals & Healthcare Report Q2 2010" Published)