Pakistan Pharma Industry SWOT – Part 4 – Asrar Qureshi’s Blog Post #595

Pakistan Pharma Industry SWOT – Part 4 – Asrar Qureshi’s Blog Post #595

Dear Colleagues!  This is Asrar Qureshi’s Blog Post #595 for Pharma Veterans. Pharma Veterans welcome 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.

Opening Note

February 2022 shall mark my completing 47 years of working in Pharma Industry. Allah be praised. I am still working. The first half of my working career was spent in Multinational companies, and the latter half in the Local Pharma, making me well-versed with both innovators and generics markets. I also had the opportunity to work in business as well as operations. 

My journey of near half century is also the journey of Pharma Industry in Pakistan. Great changes have occurred in this time and a lot could be written about it. In my blogs, which were started about four and a half years ago, I have covered several topics related to Pakistan Pharma Industry. This multi-part series shall do and review the SWOT – Strengths, Weaknesses, Opportunities, Threats – of the industry as a whole.

Stakeholder 3 – Manufacturers – Continued…

Pharmaceutical Manufacturers have their own grievances to air. We shall not bring all of them here but shall refer to some to establish a context.

Pharmaceutical business is like any other business. The analogy can be drawn from running private hospitals. Both are businesses, not welfare projects, and all businesses are for profits. Somehow the public perception is that healthcare related matters must carry a welfare aspect. It may be done by the governments or welfare organizations, but not businessmen. Take the example of Pfizer and what they have done with COVID vaccine; or look at Gilead selling SOVALDI for Hepatitis C; or our private hospitals ripping off COVID patients; or pharmacies overcharging for products in short supply; or shkreli who purchased the rights for malaria drug Pyrimethamine and raised the price by 3,000 times; these are all business cases vying to get profit. Public should change this perception to understand better.

Most pharmaceutical businesses in Pakistan and the world were started by businessmen. Very few pharmacists got into business at that stage, and those who entered, did not do well. Technical qualification does not bring entrepreneurial capability. Any businessman will try to minimize costs and maximize profit, and this is the summary. However, governments, healthcare regulators and international health organizations like WHO constantly strive to clamp more and more regulations so that the patients’ health and treatment may not be compromised. This is the biggest source of grievance expressed by the pharmaceutical businessmen.

A perception has emerged over time that pharmaceutical business is highly lucrative. Probably it also related to the rapid growth of Local Pharma and subsequent open expression of affluence among owners and executives. Government and its agencies therefore increased their demands from Local Pharma, material and non-material, and over-the-table and under-the-table. This is the second major area of grievances.

Local Pharma was greatly supported by trained people from MNCs. They came in all departments: production, quality, business development, marketing, and sales. Many of them did a great job, some exploited the then naïve owners. Now the business owners are wiser and sharper, run the show themselves, and run the professionals as well. This is the third area of grievance by Local Pharma owners.

Health department, like other department, is also ridden with bureaucracy, incompetence, and corruption. Irregularities and favoritism have conventionally been added to certain percentages for getting business. When the government purchase was decentralized and budgets plus authorities were devolved to districts, the percentages rose to unprecedented heights. Major companies opted out of government business and the field became open to smaller, less known companies. After couple of years of this mayhem, new public purchase rules were formulated under PPRA – Punjab Public Purchase Regulatory Authority. Things have improved, though our people are a genius in devising means to defeat the most foolproof systems. This is what we see now. The cost of doing government business is further complicated due to inordinate delays in payments. This is the fourth major area of grievances.

DRAP – Drug Regulatory Authority Pakistan controls licensing, drug registration, drug pricing, plant inspections, GMP inspections, import and export of materials and finished goods, and policies related to Pharma industry. Before DRAP, the Ministry of Health carried out these tasks. Drug registration at that time took 2-3 months, which now may take 2 years. Cases remain pending for no logical reason, and no relief can be sought from anywhere. In addition, the attitude of many DRAP executives and officers is downright insulting. An officer sitting at a position of authority treats businessmen doing billions of rupees business in a shabby manner. DRAP inspectors behave rudely and improperly during inspections and the bad attitude continues in all areas. This is the fifth major area of grievances.

Drug pricing has been a sore point between DRAP and Pharma Industry since the formation of Drug Pricing section. Fixation of new drugs prices takes longer and is irrational. There are also complaints that the MNCs are favored by the section, while Local Pharma is unnecessarily squeezed. Since the drug pricing policy is neither transparent nor efficient, therefore many manufacturers have been in the court for several years. Sindh High Court tried its best to press DRAP for formulating and sharing a drug pricing policy, including the price increase mechanism. After quite a bit of huffing and puffing, a policy was shared. A formula for price increase based on inflation as determined and announced by the government and expressed as CPI – Consumer Price Index, was announced. It was implemented for a year smoothly, but the same has been hindered by DRAP for almost two years now. Their issue was slipping of power from their hands. This is the sixth major area of grievances.

To be Continued……

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