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Pharmaceutical industry in Pakistan.

As many as 32 multinational companies command more than 70 per cent of the total pharmaceutical sales in the country. The present devaluation has enhanced the cost of raw material and imported medicines and made them beyond the common man's reach, besides promoting smuggling.

Ansarul Haque

At present there are 15 Pharmaceutical companies on the list of Karachi Stock Exchange and they command more than 70 per cent of total pharmaceutical sales in the country. Total Paid-up Capital of these companies stood at Rs. 1009.87 million. Free Reserves and Surplus stood at Rs. 1346.96 million. General Break-up Value per Rs. 10/- worked out to Rs. 23.52. Total sales of these companies in 1992 stood at Rs. 10.67 billion as compared to Rs. 9.36 billion in the preceding year, showing a rise of 14 per cent. Pretax Profit has also increased from Rs. 718.41 million to Rs. 752.27 million in 1992, depicting a rise of 4.71 per cent. Increase may be attributed to higher price allowed by the government. The top 5 pharmaceutical companies according to sales in 1992 are given below:-

Dividend: The Dividend picture in this section is very encouraging. Out of 15 companies 12 paid dividend during the year under review. The highest dividend of 45% (cash) was paid by Boots Pakistan Limited followed by 35% each by Wellcome and Glaxo. Ferozsons, Ostuka and Zafara International have not paid any dividend, bonus or right shares during 1992.

Price Policy: Price Policy for the pharmaceutical industry is quite confusing. An across the board increase of 9.5 to 10 per cent was allowed in 1991 without considering the fact that major pharmaceutical units were allowed a 10 per cent price increase at the end of 1989 for top ten products of each company. It is to be noted that in most of these cases the top ten products usually account for upto 80 per cent of the company's total turnover.

It was reported that out of 264 national pharmaceutical manufacturing units, 210 licensed manufacturing companies operating in the country of these 32 are multinationals. The present devaluation has enhanced the cost of raw material and imported medicines and made it beyond the common man's reach, besides promoting smuggling. The cheaper and low quality medicines are mostly smuggled from Sri Lanka and Burma. Other sources are Iran, where pharmaceutical industry is heavily subsidised and India where quality is non-existent and its basic raw material is produced locally. In case of Pakistan all the raw material is imported.

A total of 2,683 medicines has been registered in Pakistan so far. The list of WHO identifies 250 to 300 essential drugs. However, the government has allowed permission for more drugs to encourage competition and lower prices in the country.

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Author:Haque, Ansarul
Publication:Economic Review
Date:Aug 1, 1993
Words:475
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