Status of Pharmaceutical Business in Pakistan 2024 - Part I – Asrar Qureshi’s Blog Post 961

Status of Pharmaceutical Business in Pakistan 2024 – Asrar Qureshi’s Blog Post 961

Dear Colleagues! This is Asrar Qureshi’s Blog Post 961 for Pharma Veterans. Pharma Veterans Blogs are published by Asrar Qureshi on its dedicated site https://pharmaveterans.com. Please email to aq.pharmaveterans@gmail.com for publishing your contributions here.

Credit: Anna Shvets

Credit: Anna Tarazevich

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I would like to comment on the current state of pharmaceutical business in Pakistan. Before that, I would like to put down the basics first.

Pharmaceutical business is among key businesses in Pakistan for two reasons: one, it is directly related to the state of healthcare in the country; and two, it employs hundreds of thousands of people in various roles. For common understanding, I may list down the major stakeholders.

Pharmaceutical Industry – comprises of around eight hundred manufacturers of pharmaceutical products and about six hundred manufacturers of healthcare related supplements, vitamins, herbal and other such products. The industry procures/imports raw materials and packaging materials and makes finished products available to the market. It is a large segment employing several hundred thousand employees and generating value in excess of a trillion rupees.

Regulators – At the federal and provincial levels there are government departments who are mandated to ensure that drugs are manufactured, supplied, and sold under prescribed conditions. They have a developed, large infrastructure with various levels of officials and their shenanigans.

Distributors – The manufacturers hire the services of private distributors to make their products reach every corner of the country. These may be standalone, one-city based, or at regional level; couple of them operate at national level also. The distributors have large warehouses, sales teams, delivery teams, and delivery vehicles to make supplies to wholesale and retail shops.

Wholesale Market – These are individual businesses operating from a shop from where retail pharmacies can buy drugs in bulk. The wholesales markets exist in all businesses and act as a secondary provider between distributors and retail market.

Retail Pharmacies – These are also individual businesses which are located in every part of the country from where the patients get their medicines. Retail pharmacies business has grown considerably over time and the concept of chain pharmacies – one pharmacy brand with multiple outlets – has caught up in some cities of Pakistan. Chain pharmacies are most prevalent in Saudi Arabia, UAE, Philippines, and have a presence in almost every country.

The above structure makes up the pharmaceutical business in Pakistan. Before we go further, it will be educative to see a few figures to understand how the market is evolving. Primary source of these figures is IQVIA – the American company which collects and publishes pharmaceutical business statistics. It is their copyrighted information; therefore, I shall not quote exact figures. For my purpose, exact figures are not required either because I wish to comment on the trends in the following three major areas: Market Growth, Corporates Growth, and New Product Launches.

Market Growth

IQVIA monitors retail sales only, which is the interface between patients and medicine seller, be it a street pharmacy, or hospital pharmacy, or clinic pharmacy. 

During the last twelve months pharma market added about 150 billion rupees to its revenue. The total average revenue per month stood at about 73 billion rupees. 

In an economy, where people purchasing power has consistently gone down and most businesses lost volume, the pharma business added revenue, ostensibly because medicines are essential items, and their purchase cannot be delayed or halted. 

The interesting dimension is that this increase did not come because patients consumed more medicines. The number of drug units sold remained almost the same. It means that the patients paid more money for the same number of medicines. We can also say that the medicines became costlier by about 20%. 

Pharmaceutical business is highly regulated business. Drug prices are fixed by DRAP and companies cannot increase prices on their own. Did DRAP allow 20% increase across the board? No. But in bits and pieces, price increases must have been granted. Pricing policy is the sore point with DRAP, and they have never come up with a transparent and equitable policy in this regard. The Pricing Section is arguably outside DRAP and under the ministry of NHSR&C. The section has devised a convoluted, complex formula for fixing of prices and mostly ends up creating disparities. It is generally believed that pricing section favors some and not others. If you read through their minutes published on the DRAP website, you may infer the same. On the other hand, they are not willing to give adequate price increase to old, conventional, essential drugs which remain in perpetual shortage due to this factor. 

Some products have grown out of proportion. And it is not because they are needed to this extent. It is rather that their aggressive marketing has resulted in their extraordinary growth/consumption. An antiulcer drug is selling for 9 billion rupees. Do we have so much ulcer in Pakistan? As usual statistics are not available, but the estimates do not support such huge incidence. And it is just one drug, many more drugs in this category are also raking in billions and millions. A vitamin B complex factor sells for 7 billion rupees, and it has an interesting history where for certain reasons, it is getting exclusive treatment at DRAP. Antibiotics sales are astounding and among top ten products, four products have a collective sale of 33 billion rupees. You can imagine what the total market will be.

Besides or maybe due to aggressive marketing by pharma companies, drugs are overprescribed in Pakistan. The overprescription comes in two forms. One, too many drugs are prescribed, and two, more and more high potency drugs are given even for relatively minor ailments. The burden of cost and side effects is on the patients. Serious allegations are raised against the nexus of pharma companies and doctors, even in developed countries. The most serious opioid crisis in the United States was caused through doctors’ prescriptions, and it is still raging as an endemic problem there. Prescription opioid drugs are also prescribed in Pakistan without even realizing what it will lead to. Tramadol/Paracetamol combination marketed by various companies sells by tons. Tramadol is an opioid analgesic and can cause addiction. We don’t know how many people have become addicted and are continuously taking these ‘medicines’ because other medicines do not provide the same relief. 

Pharma market growth is largely driven by the generic manufactures which have taken over the market for several years. They are now occupying top positions and have huge business volumes. Their major benefit was that they supplied generic drugs at lower cost, but this benefit is fast waning away.

In summary, pharma market has some very good points and some serious issues.

To be Concluded……

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For most blogs, I research from several sources which are open to public. Their links are mentioned under references. There is no intention to infringe upon anyone’s copyrights. If, however, it happens unintentionally, I offer my sincere regrets.