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Crisis of pharmaceutical industry.

Crisis of Pharmaceutical Industry

It is a well known fact that the Pharmaceutical Industry particularly the National Pharmaceutical Manufacturers are facing innumerable problems. Multinationals who control over 75 per cent of the pharmaceutical market in Pakistan are naturally, like any shrewd foreign investor, are not ready to lose their share voluntarily.

The policies of the Government are still not clear about the growth of the National Pharmaceutical Industry, despite the fact that in the manifesto of the past ruling party and later in the National Health Policy the then Government committed to minimise the role of multinationals and to encourage the National Pharmaceutical Industry. Nothing was done in this direction.

The National Pharmaceutical Industry in addition to the above two factors is also suffering on the following accounts: [right arrow] They are being pressurised to modernise their plants and factories according to the latest GOOD MANUFACTURERS PRACTICES, whereas they are neither being given any incentives nor any concessions of any sort. [right arrow] Unlike other developing countries of the world, the multinationals in Pakistan are allowed to manufacture even ordinary drugs like Pain Killers (Aspirin, Paracetamol etc;) Vitamins, Cough Syrups and other Over the Counter (O.T.C.) medicines.

In almost all developing countries in the world the multinationals are allowed to manufacture their own research products only or the products which they manufacture in their home country also. As a result of this anomaly, multinationals by sheer strength of their power, money and large amount of funds at their disposal for promotion of their products are depriving the National Pharmaceutical Industry of its justified rights. [right arrow] It is absolutely a hearsay, which unfortunately, right from the top to the bottom in the Government, the Media and as a result the general public is made to believe that the prices of medicines in Pakistan are very high. But the pharmaceutical industry has proved beyond any shadow of doubt that the prices of medicines in Pakistan are among the lowest in the world, much lower even from neighbouring countries like INDIA and SRILANKA. Can anyone imagine that a tablet of Aspirin which was costing paisas five (5) ten years ago is still costing paisas five (5) despite the depreciation of the Pakistan Rupee against major currencies of the world by over 150%, during the same period and increase of other inputs and costs including wages, electricity/gas, telephone, postage etc. by 300% in the same period. Same applies to most of the medicines. In fact prices of many medicines have declined during the last 10 years due to decrease in International Prices of their raw materials. [right arrow] The pharmaceutical industry is the only industry which is on one side squeezed by price control and on the other hand prices are not being allowed to be increased proportionate to increase in the costs including depreciation of Pak Rupee. This is against all laws of natural justice and also a violation of the basic rights guaranteed by the Constitution of Pakistan. Every trade and industry including the Government controlled ones increase prices of their products with depreciation of Pak Rupee, increase in energy costs, telecommunication charges and increase in costs of other inputs but the pharmaceutical industry is being denied of this right since last four years.

Solutions

[right arrow] The multinationals should be confined to manufacture of their own research products or the products manufactured by them in their home country. All other products and the products patents of which have expired shall be allowed to be manufactured only by National Pharmaceutical Companies. [right arrow] For fixation of prices, a self regulatory formula already proposed by the Pakistan Pharmaceutical Manufacturers Association shall be adopted and pharmaceutical companies shall be allowed to increase/decrease the prices in accordance with world market price trends corresponding with value of the rupee against the currency in which raw/packing material is imported. [right arrow] In price fixation there shall be no discrimination between National and Multinational Companies. [right arrow] The National Pharmaceutical Industry, which has turned sick already and is on the verge of collapse, requires life saving injections. Otherwise this country will face a major economic setback by closure of over 150 National Pharmaceutical Units, with which a livelihood of approximately one million people is linked and who will lose their jobs including the large ancillary industries which provides various kinds of services to the pharmaceutical industry.

It is, therefore, strongly recommended that in addition to the above mentioned measures, the National Pharmaceutical Industry must be saved from collapse by taking the following measures without any delay: [right arrow] The import of machinery for improvement, balancing, modernisation etc., by the National Pharmaceutical Industry shall be made free of import duty, sales tax, iqra and surcharge. [right arrow] The National Pharmaceutical Industry irrespective of its location should be declared free of income taxes for a period of five (5) years irrespective of its year of installation. [right arrow] All raw materials, packing materials etc. shall be importable by the pharmaceutical industry free of all duties, taxes, surcharge, sales tax, iqra etc. etc. [right arrow] Import of medicines in finished form shall be banned with exception of a few such medicines which are not possible to manufacture in Pakistan due to reasons of lack of technology or economic feasibility. [right arrow] Since the pharmaceutical industry is price controlled, there shall not be any restriction on their expenses on promotion/advertisement of their products. [right arrow] The national pharmaceutical industry should be allowed finances by banks and D.F.I.s at concessional rates of mark up/interest.

Jawaid Tariq Khan, President of National Pharmaceutical Manufacturers Welfare Group
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Author:Khan, Jawaid Tariq
Publication:Economic Review
Date:Aug 1, 1990
Words:942
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