Pharmaceutical industries are the backbone of a country. Not only do they bring profit to the country but they also fulfill the need for effective and disease-curing medicines. However, in the past few years, the growth of Pakistan’s pharmaceutical industry has significantly dropped, decreasing from approximately 16% per annum to about 8% per annum.
This decline is a cause of concern not only for the industry but also for the government.
Many foreign firms are leaving the Pakistani market. A decade ago, there were 36 MNCs operating in Pakistan, but now only 22 remain. The pharmaceutical giant ‘Bayer’ is the latest to exit Pakistan. Eli Lilly and Fresenius Kabi left Pakistan in 2022, and earlier, Merck, MSD, and Johnson & Johnson also exited.
Due to rupee devaluation and financial crises, these companies are winding down their businesses. Their manufacturing facilities have been shut down, and products are now being imported at higher prices. Consequently, this results in decreased growth, loss of investment, and job losses.
There are several challenges faced by the pharmaceutical industry, leading to their winding down of operations:
- The first crucial challenge is the government’s total control over product prices.
- The high cost of importing basic materials, leading to significant foreign exchange expenses.
- Political uncertainty has emerged as a major factor affecting the pharmaceutical industries due to policy discontinuations.
- Local manufacturers have feels undone by high sales tax on pharmaceuticals and the inadequate pricing structure for medicines
- Inadequate research on newly emerging diseases in Pakistan.
- Deteriorating law and order situations in the country have affected companies in terms of sales and customer reach in affected areas.
- Market access is challenging, and operational risks are high.
This situation is concerning, and the government needs to immediately take adequate steps to overcome this problem and hope that the Pharma MNCs can potentially return to Pakistan.
By – Maheen Asad, Student of Karachi University