Federal Commerce & Investment Adviser, Abdul Razak Dawood, has said the present government has been making efforts so that Pakistan’s annual pharma sector exports are increased to the US $ 5 billion till the year 2025. The Adviser to Prime Minister on Commerce & Investment disclosed this plan of the government while addressing as the chief guest the 1st Pharma Export Summit and Awards-2021 (Pesa) organized by Pakistan Pharmaceutical Manufacturers’ Association (PPMA)
The PM’s Adviser informed the audience of the summit that the government has set an export target of $38 billion for the current fiscal year in consultations with the relevant stakeholders. Dawood expressed the confidence that the industries and the farmers will play their part to achieve the export target. He added that the government was especially focusing to increase pharma exports through tariff rationalization, trade-related investment, institutional reforms, and easing of business regulations.
He said more tariff rationalization will be done in the next budget to facilitate different industries including the farmers. The “made in Pakistan” marketing drive by the Ministry of Commerce is designed to promote Pakistan products in new markets which will greatly help increase the volume of pharma sector exports. He said that Thursday (today) he has arranged a meeting of the PPMA leadership with Prime Minister Imran Khan wherein all matters about the Pharma sector will be discussed.
He said that the government was committed to providing a conducive environment to all the segments of the economy and will make all efforts in removing the obstacles hindering the pharmaceutical sector’s growth. He said that exports of the engine of economic development.
He suggested that the pricing of drugs and other medical instruments should be taken away from the Health Ministry, adding that the ministry should also not deal with commercial activities. He said that he has requested the PM Imran Khan that setting tariffs for the industry of the country should not be part of the Federal Board of Revenue and now the ministry of commerce is dealing with tariffs. He said that in tariff rationalization federal Minister for Finance Shaukat Tareen has greatly helped the commerce ministry. He added that the government will further rationalize the tariff in the next budget for the industry as well as for farmers.
Speaking on the occasion Khalid Mansoor Special Assistant to the Prime Minister (SPAM) on China Pakistan Economic Corridor (CPEC) said that CPEC is all about the industrial revolution in the country. He said that under CPEC so far $13 billion investment projects mainly power projects, infrastructure development, and Gwadar have been completed. Mansoor said that $12 billion projects under CPEC are in the pipeline which mostly covers industrial development and others. He said the CPEC is now entering phase-II which will focus on industrial cooperation between China and Pakistan, in 2nd phase of the CPEC special economic zones will be completed which will help grow the overall economy. He said that the pharma industry should took the advantage of the Special Economic Zones.
Chairman Pesa and Former Chairman PPMA Kaiser Waheed speaking on the occasion said that he was associated with the pharma industry for the past 50 years and some years ago the government was not considering the sector as an industry. He said that however over the past 20 years situation has transferred and local industry started growing now the local industrial units have a 70 percent market share. In 2000 the country was exporting just $9 million pharma products but now exports have crossed the $250 million mark.
Chairman PPMA Tauqeer-ul-Haq giving the industry’s point of view said that in 2020 the pharma industry was valued at around $3.2 billion which ten years ago in 2011 was at around $1.64 billion. The industry can be $5 billion worth within the next few years. He said that the industry recorded a 24 percent growth in the first quarter of the current fiscal year as it exported over $68 million products.
Further highlighting the achievements of the pharma industry he said that the sector has grown steadily over the years and without much help from the government. The worth of the pharmaceutical sector was estimated to be around $3.2 billion in 2020, showing an increase of 200 percent over 9 years. Exports from this sector of the economy were worth $218 million in 2019, up from $44.4 million in 2003.
Exports from the Pharma sector, as per PPMA sources, saw a major increase in the first quarter of the previous fiscal year. And Pakistan’s pharmaceutical exports went up by 23 percent to $68.1 million during the first quarter of the current fiscal year of 2020/21. However, despite these recent growth spurts pharmaceutical exports made up for only 0.9 percent of total exports in 2019 – which represents both the challenge and the opportunity.
The pharmaceutical sector of Pakistan has long been asking for the kind of government support that has been provided to other prominent sectors like textile and believes that the sector can have a meaningful contribution to Pakistan’s GDP – if such support through concrete policy measures is made available. Some recent professional publications argue the same.
“Including institutional sales, industry posits that this sector easily becomes a retail market worth USD 4 billion,” a report titled ‘A Health Check for a Better Future: Unleashing the Potential of Pharmaceuticals in Pakistan’ states. The industry is currently struggling due to lack of chemical industry in the country, poor governance, electricity shortages, inconsistent policies of DRAP regulators that cheery picks policies from the world in the absence of a long-term drug policy, the report noted.
This above-cited report was also of the view that global pharmaceutical markets are going through major restructuring due to the ongoing pandemic, presenting an opportunity for Pakistan to enter the global “off-patent drugs market” that will be worth $700 billion in branded generics and $381 billion in generics by 2025. Considering these facts, the Pharmaceutical industry had made some viable recommendations to the government before the 2021 budget.
The industry recommended that the prices should not be regulated for drugs whose markets are competitive or monopolistically competitive. Price regulation should only be there in the case of a monopoly or collusive oligopolistic behavior. The industry also suggested that the government allows duty-free imports of all APIs (active pharmaceuticals ingredients) and machinery for the both domestic and export market. This was granted in the budget “to incentivize pharmaceutical products. CD and ACD have been exempted on 358 active pharmaceutical ingredients (APIs), the raw material of auto-disable syringes and Remdesivir.”
However much is needed, from the government, to streamline this vital industry; Pakistan being a country of 250 million offers a huge domestic market that can expand to provide products at competitive prices to Afghanistan, Central Asia, and Africa if the government in Islamabad can come up with a well thought out a coherent policy plan that focuses on both the chemical and pharmaceutical industries.