Tender Spots of Pharma Industry VI – Blog Post #391 by Asrar Qureshi

Dear Colleagues!  This is Pharma Veterans Blog Post #390. Pharma Veterans welcomes sharing of knowledge and wisdom by Veterans for the benefit of Community at large. Pharma Veterans Blog is published by Asrar Qureshi on WordPress, the top blog site. Please email to asrar@asrarqureshi.com for publishing your contributions here.

Pharmaceutical Associations – Like some other industries, Pharmaceutical industry also has its associations. The purpose of association is to safeguard, advocate and lobby for interests of the industry. Sometimes such organizations may become overly aggressive and assertive, but generally, it is not so.

Pharmaceutical industry also has two associations; the MNCs have Pharma Bureau, while the Local Pharma has PPMA – Pakistan Pharmaceutical Manufacturers Association.

Pharma Bureau is an exclusive organization for multinational Pharma companies. They do not hold elections as there are no office bearers. They have an executive director who runs the organization secretariat and promotes the interest of member companies. It is pertinent to mention that the number of MNCs in Pakistan has reduced considerably; presently, the number is less than twenty-five.

Pakistan Pharmaceutical Manufacturers Association – PPMA has a larger membership base. However, all 750 manufacturing companies have not opted to become members. Presently, just over 200 companies are bonafide members of PPMA. PPMA holds elections every year in which office bearers for various positions are elected.

PPMA is more than forty years old and it has seen periods alternating between high activity and impressive results to low activity and dismal results. The factors prevailing on both sides, government and PPMA had been responsible for highs and lows.

PPMA has more daunting task as compared to Pharma Bureau. Successive governments have shown more inclination and leaning towards MNCs. It has shown such bias in pricing and projects awarded to and run through MNCs. The MNCs came from a position of high strength, research products, organized systems and diplomatic pressure when needed. Local Pharma on the other hand started from a position of weakness, few local products initially and then generics, no research, developing systems and no political influence at all. The effectiveness of PPMA is therefore relatively compromised.

As is customary, the government departments and bodies tend to rule the very people and industry that they are required to serve. Ministry of Health is no exception. It believes that it does not need to take stakeholders into confidence or even into discussion, and that it has the ultimate wisdom to decide what it deems appropriate.

PPMA has its own set of problems too.

PPMA has not devised a concerted agenda to promote the interests of Local Pharma. PPMA has been an exclusive platform for pharma industry owners whose sole objective has been to maximize profits. This has led to unnecessary debates and has given bad name to Local Pharma. The much-debated SRO about maximum discount not exceeding 40% was one such example. The PPMA asked for price increase and permission to sell at more than 40% discount in the same breath. The contradiction was so obvious that it was almost hilarious. No wonder PPMA did not achieve this objective. Other such campaigns have also met a similar fate.

As mentioned earlier, 95% business is concentrated with top 100 companies while 650 companies scramble to get a share from 5% business. This has led to serious contradiction within PPMA. The top performing companies wish to pursue a different agenda while the smaller companies have different compulsions. The two tiers cannot and do not mix. As a result, most high-profile Local Pharma pay lip service to PPMA but do not participate actively in its affairs. The PPMA is therefore left with small, low performing companies whose main agenda is survival; not progress. PPMA has lost much of its voice, power and effectiveness as it is not backed by the most powerful members.

The handling of PPMA by smaller companies has led to another issue. It is clear that growth is first a mindset and then a consequence. Secondly, growth is also not related directly to abundance of resources, because resources are generated through growth. The companies who are still small even after years and decades usually lack growth mindset and commitment to growth. This is opposite to high performing companies who are working hard and growing business rapidly. One decisive factor is the utilization of time because time is actually the biggest resource. Smaller companies spare a lot of time to spend on PPMA which high-performing companies refuse to do. The diversity is ever increasing. The rich are getting richer and poor are getting poorer; the alienation between the two tiers is also increasing.

PPMA office bearers are mostly coming from smaller companies. These men and women can afford to devote more time for running the affairs of PPMA, which is a great thing. However, it has also led to another issue; the politics. PPMA now fully boasts of groups and alliances, and their political fights within its organization. Elections were bitterly fought until a few years ago, Then the powers to be sat down and decided to go for predetermined selection rather than open election. Now the office bearers are selected and there is contentment around by and large. Performance of PPMA has been put on the back burner. Still, some ambitious individual makes a heroic effort, but it is mostly doomed.

The summary is that the Local Pharma is at the mercy of DRAP and other government bodies and agencies. The industry itself is not fully cognizant of its real challenges and is working on small, unimportant issues. The sole representative organization, PPMA is not geared towards future; it is kind of looking backwards.

Future for Local Pharma is encouraging as it is dominating the pharma market in Pakistan. The future at the same time is throwing new and serious challenges for which industry as a whole is not prepared. Individual companies may act in some integrated way and secure long-term future. The rich therefore may keep getting richer; the poor may keep getting poorer.

To be continued……