The Case of ‘Ja’alee’ (spurious) Drugs – Pakistan Pharma Market - Blog Post #284 by Asrar Qureshi

Dear Colleagues!  This is Pharma Veterans Blog Post #284. Pharma Veterans shares the wealth of knowledge and wisdom of Veterans for the benefit of Community at large. Pharma Veterans Blog is published by Asrar Qureshi on WordPress, the top blog site. If you wish to share your stories, ideas and thoughts, please email to asrar@asrarqureshi.com for publishing your contributions here.

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Got an idea about how many medicines are consumed by us in Pakistan? How much value in Pak rupees?

Through the retail Pharmacies, 450 billion rupees worth of medicines were sold in last year. Every year, the market increases by 10% or more. At the rate of 10%, 45 billion will be added in 2020. This did not include the medicines purchased by the private and government hospitals, alternative medicines, and other medical related products. Pakistani Pharma companies also exported their products to several countries to the value of around 200 million US$. This would convert into another about 32 billion rupees. If we include Alternative medicines like Hamdard, Qarshi etc. and homeopathy drugs etc. the market of ‘drugs’ may be over one trillion rupees.

We shall focus our discussion on allopathic drugs. This market is organized, documented, regulated and monitored. Other segments are partially regulated or still not regulated. The statistics ae not available any way.

As of November 2019, DRAP shows a list of 620* (correction. Blog #283 said 621) companies.

Pharma Market is unevenly divided between the multinational companies selling mostly research brands and generic companies selling mostly generic versions of research bands. Some multinational companies have also come into generic business and some generic companies have acquired research products from abroad. Market share of MNCs has now been reduced to about 20% while Local Pharma has 80% market share. This is an exact opposite to what used to be till mid-1980s. The change had been coming and has finally reached the peak almost. It actually means that Pakistan is predominantly a generic market.

Another unevenness is that 95% market share is enjoyed by top 50 companies. Only 5% market share is left with about 600 manufacturing and marketing/importing companies. It is not a reflection of economic disparity; it is a function of marketing disparity. Currently, there is so much difference between the marketing muscle of top 50 and the rest that the smaller ones cannot challenge the larger ones.

From patient point of view, it has implications. Large companies have the power to charge more. Small and very small companies may try to use undesirable means to survive and grow.

Pharma market has been rapidly changing since 1990s. It was good thirty years period in which the entire healthcare landscape changed significantly. It is not just due to Pharma companies; it is about the whole healthcare system.

The number of medical colleges has increased manifold, mainly in the private sector, with the result that the number of graduating doctors is much more. Forty-fifty years back the government made it mandatory for the medical graduate to either serve in army or go to rural health centers for two years. Army established its own medical college and are good with their own graduates. Increase in the number of doctors increased the pressure on the main cities and the doctors decided by themselves to go to rural areas and establish their practices and hospitals there. The spread of doctors in the remote areas is a welcome thing and has helped to bring healthcare to the doorstep of those without access so far. At the same time. It has unleashed a vast amount of exploitation of poor, unknowing patients by the knowing physicians. For most doctors, rural, remote areas have proven to be unexplored gold mines.

Another significant increase has been in the number of pharmacists; again, due to increased seats in the private sector. Pharmacists association has done a good job for its members by getting pharmacists into multiple positions by law. A large number of pharmacists are employed by the Pharma Industry as well.

Pharmaceutical products, like other consumer products, are exposed to the challenge of counterfeiting. Long time back we got a person caught who used to collect empty injection vials from the hospital wards. He would open the seal and fill a cheaper antibiotic and seal again. He would sell through the help of a pharmacy outside the hospital. This was a small, isolated event. We have been seeing isolated events on several occasions, but these were always limited in scale. Organized, large scale production of fake drugs has been recently reported through media. If you go below the media hype, the leads go dead. There is no significant progress, and no prosecutions which casts doubts on the authenticity of the entire action.

Retail Pharmacies have also undergone many changes. From small, poor pharmacies, we now see chains like Clinix, Green, Apple, Fazal Din Pharma, Fazal Din Plus and so on. The individual, standalone pharmacies have also upgraded themselves. The larger pharmacies earn more money and do proper business. They have no reason or motivation to indulge in fake and spurious drugs business. The same argument can be turned on its head for small, suburban, rural pharmacies where the seller can sell anything due to ignorance of local people. If you go around you will see that some Pharma companies do business only in peripheral areas. It is not because they sell fake drugs; they feel incapable of competing in more developed areas.

Possible Motivations for Selling Fake/Spurious/Sub-Standard Drugs

1.     Willing Partners – No manufacturer can sell fake drug unless he has willing partners in pharmacies. No pharmacy sells a fake drug unknowingly. If it is done, it is with proper knowledge and agreement. The overall value system of society has crumbled anyway, and willing partners are a reality.

2.     High priced drugs – The unit prices of newer drugs particularly are relatively higher. Selling a counterfeit version can earn more money for both parties, be it the maker or the seller.

3.     High Turnover – The amount of medicines sold gets higher every year. More units are sold, and more revenue is collected. Currently, about three billion units (packs) of medicines sell through retail pharmacies. Adding/substituting a few hundred thousand fake drug units may not be noticed.

4.     Regulatory Control – Manufacturers are mainly regulated by Federal Regulatory structure while retail business in mainly regulated by Provincial Regulatory structure. There is complete disconnect between the two.

5.     Testing Facilities – Provincial governments have Drug Testing Laboratories; federal government also has couple of labs for this purpose. While the Pharma business grew rapidly, these facilities were not upgraded and expanded proportionately in terms of resources, staffing, and equipment. The time for results and quality of results both, are compromised due to this

6.     Location of Pharma Manufacturing Units – Though the site for establishing a pharma manufacturing unit is approved by DRAP, you find units being established in remote, isolated places. The geography of location is so scattered and haphazard that DRAP officials find it virtually impossible to go there even once in a year. We also know that government is generally poor in facilitating its staff. In the absence of periodic monitoring, things can easily go awry.

7.     Government Policies – Government priorities have never included Healthcare, no matter what is claimed. There is no full federal minister of health; there is an advisor with the status of minister of state. The present CEO of DRAP is working on additional charge; so are many directors. There are no permanent postings. This is enough to show the interest of government in the Healthcare. Every now and then, the government gets out of slumber and sees the hard reality. Then, either there is an effort to import regulatory policies from developed countries, or there is some flight at a tangent. Both practices leave much to be desired. The absence of proper, well-thought, integrated, indigenous policies leads to serious issues.

Continued……