The pharmaceutical industry of pakistan

The pharmaceutical industry of pakistanPresented By:Sara Shahab Lodhi8614Ammara Ather8731Sara Khan10156

INDUSTRY OVERVIEWPakistan has a very vibrant and forward looking Pharma Industry.

Pakistan Pharmaceutical Industry meets around 70% of the country's demand of Finished Medicine.

The National Pharma industry has shown a progressive growth over the years, particularly over the last one decade.INDUSTRY OVERVIEW (cont)The value of pharmaceuticals sold in 2007 exceeded US$1.4bn, which equates to per capita consumption of less than US$ 10 per year and value of medicines sold is expected to exceed US$2.3 B by 2012.

Pakistan is a developing pharmaceutical market, with a large population and economic progress.INDUSTRY OVERVIEW (cont)The Pakistan Pharmaceutical Industry is a success story, providing high quality essential drugs at affordable prices to Millions. PAKISTAN PHARMACEUTICAL MANUFACTURERS ASSOCIATIONPakistan Pharmaceutical Manufacturers' Association came into existence on January 26, 1961.

The Government of Pakistan through the Ministry of Commerce registered PPMA as the only Representative body of the Pharmaceutical Industry in the Country. PAKISTAN PHARMACEUTICAL MANUFACTURERS ASSOCIATION (cont)PMA has its head office located at KARACHI with two Regional offices, viz. Punjab & NWFP Regional Office at Lahore and Sindh & Balochistan Regional Office at Karachi.

IMPORTANCE OF PHARMA INDUSTRYProduces medicines and life saving drugs

Contributes towards GDP (0.16%)

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

Supports Health facilities

KEY FACTSRanksPakistan1Glaxo Smith Kline2Abbott3Sanofi Aventis4Sami5Getz6Pfizer7Novertis8Roche9Searle10RemingtonKEY FACTS (cont)NAMESMarket ShareGSK: RS 703.4 crore (http://www.gsk.com.pk/downloads/qtr2_report2009.pdf)11.60%Sanofi Aventis: RS 519 crore (www.sanofi-aventis.com.pk)4.10%Getz Pharma3.90%Abbott Lab3.80%Roche3.10%Merck2.90%PHARMACEUTICAL CAPITALThe pharmaceutical industry exceeds $1.4bn which equates to per capita consumption of less than $10 per year.

Strong export potential: More than $100m foreign exchange earned annually for the country.

Pharmaceuticals: PKR152.97bn (US$1.79bn) in 2010 to PRK169.90bn (US$1.98bn) in 2011; +11.1% in local currency terms and +10.6% in US dollar terms.

PHARMACEUTICAL CAPITAL (cont)Health care: PKR398.59bn (US$4.67bn) in 2010 to PKR454.63bn (US$5.31bn) in 2011; +14.1% in local currency terms and +13.5% in US dollar terms.

Medical devices: PKR29.91bn (US$351mn) in 2010 to PKR34.87bn (US$407mn) in 2011; +16.6% in local currency terms and +16.1% in US dollar terms. (3)source: http://www.medpk.com/pharmceutical_overview.phpHISTORICAL BACKGROUNDAt the time of independence there were two small units which were unable to meet the local demand.

A decision was taken 1972 during the period of Bhutto to abolish the brand names.

There were only 3636 registered drugs in 1977. The number however rose to 6228 in 1981, and almost 9900 were reported in 1999. HISTORICAL BACKGROUND (cont)In 1993, there were 256 national pharmaceutical units and 38 Multinational Companies. Pakistan pharmaceutical industry was valued at $900 million which grew @ 20% in 1996.

At the end of 1999 more than 75,000 medicines were being sold in the market. At the end of 1999, according to the Ministry of Health, there were 300 registered units producing medicines and other pharmaceuticals. HISTORICAL BACKGROUND (cont)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. CURRENT SITUATIONPharmaceutical industry of Pakistan is around US$ 2 billion with an annual growth rate of 12.9% per annum.

Out of total market of US$ 2 billion, 53.3% is captured by Multinationals and 46.7% is taken up by National companies. CURRENT SITUATION (cont)High competition and price wars.

The top 50 firms enjoy more than 80% of the market share.

CURRENT SITUATION

FormulationBasic manufacturingSemi-basic manufacturingRepacking

SOME KEY STATISTICS OF THE INDUSTRYSOME KEY STATISTICS OF THE INDUSTRYCompanies operating in the industry600Number of EmployeesOver 100,000Registered drugs47000Registered Molecules1100R&D expenditure1% of the profitAverage growth rate11%Market Share of Multinational companies45%Market Share of Local companies55%Market LeaderGlaxoSmith Kline

CHALLENGES TO THE PHARMACEUTICAL INDUSTRY

Market access is challenging and operational risks are high Import of raw material which costs a lot of precious foreign exchangeIncreasing cost of manpower and energyLow R&D expenditure, Political instability is another major factor The deteriorating law and order situation, due to which most of companies have suffered in terms of sales

PRODUCTS OF SANOFI-AVENTIS

Actonel AmarylAmaryl M S.RApidraAprovelAvilAvomineBrulidineCefromCidomycinClaforanClexaneCoAprovelCordaroneDaonilEloxatinEpilimEssentialeFlagylFrisiumGranocyteHaemaccelIdaracLantusLargactilLasorideLasixNasacortNeodiparNivaquine-PNo-SpaPeflacineOreloxPhenerganPhensedyl-PPlavixProfenidRulidSecnidalStemetilStilnoxTargocidTarividTavanicTaxotereTelfastTixylixTriatec HCTTritaceWinstorXatral

Products of Pfizer

AromasinCaduetCamptosarCelebrexChantixDetrol/Detrol ExuberaGenotropinLipitorLyricaNorvascRelpaxRevatioSpirivaSutentVfendViagraXalatan/XalacomZmaxZoloftZyrtecZyvox

PORTERS FIVE FACTORS ANALYSIS

THE THREAT OF NEW ENTRANTS High Medium LowTHREAT OF SUBSTITUTE PRODUCTSHigh Medium Low

BARGAINING POWER OF SUPPLIERS High Medium LowBARGAINING POWER OF BUYERS High Medium LowRIVALRY AMONG EXISTING FIRMSP

TE

S

High Medium Low

HEALTH SECTOR ISSUES

CONCLUSIONOne of the most developed hi-tech sectors within the country's economyStrong export potentialDrugs are available at low price to the consumers and the Ministry of Health is not considering the price increase due to the political influencePer capita expenditure on drugs usage is also the lowest in the region (India, Bangladesh)Counterfeit medicines are major problemThe drug inspection teams investigating the manufacture and sale of fake drugs have failed to perform their duty effectively

RECOMMENDATIONSPrices to be increased in a balanced wayWorld class Laboratory should be established to conduct efficacy, quality, safety and bioavailability of productsPharmacists to be available at medical stores to guide customersGovt. must support the pharmaceutical industry by subsidizing this sectorThe companies must allocate a fund for the promotion of R&D in Pakistan

RECOMMENDATIONS FOR COMPANIESCollaboration with Indian companiesPakistani exporters need to focus on African regionsAggressive promotional campaign identifying Pakistan with quality products in the international marketCollaboration between the academic institutes and industry

GOVERNMENT SPECIFIC ACTIONSEffective action against unethical marketing practicesProvide research infrastructure and labs to the domestic universities and academic institutionsGovernment incentives on R&D, encouraging companies to set up their own R&D units and manufacturing units in tax free zonesGovernment should collaborate with UN and the WHO programs to support the industryGovernment should put a ban on import of generics being produced locally

GOVERNMENT SPECIFIC ACTIONS (cont)Government should suspend its requirement of separating the drug production lines, because it will be very difficult for smaller companies to meet this requirementGovernment should also provide loans to the local companies to establish separate drug production linesSince this can be the only way for the smaller companies to meet this requirementGovernment can attract investors for investment in this sector by announcing incentives for themIn this way, the raw material will be available to the manufacturers at a cheaper rateGOVERNMENT SPECIFIC ACTIONS (cont)The Govt. actions can be fruitful only when the pharmaceutical industry as a whole gives a positive responseThe pharmaceutical sector itself must show a corporate responsible behavior in receiving and responding to the incentivesTHANK YOU!