Pharma industry on tenterhooks.

Byline: Dilawar Hussain

The pharmaceutical industry consists of 759 manufacturing units, including those operated by 25 multinational companies.

The last pharmaceutical company to be listed on the stock exchange was AGP Ltd the eighth largest pharmaceutical group in the country which offered 35 million shares or 12.5 per cent of the company's capital to the public. It stood out as the first company in the pharmaceutical sector in 23 years to offer an initial public offering (IPO).

AGP Chairman Tariq Moinuddin Khan affirmed that the ratio of foreign to local companies in the country's pharmaceutical sector was 70:30 a decade ago. 'That has now changed to 70 locals against 30 foreign firms,' he said.

'If drug companies are unable to cover costs, some of them may compromise on the quality and efficacy of medicines'

Industry sources say that local companies meet around 70pc of the country's demand for finished medicine. The industry recorded a 22.6pc increase in value in 2017-18 and 17.8pc rise in volume. By 2020, the pharmaceutical market is expected to be valued at Rs312 billion.

The issue of maximum retail price (MRP) of medicine has forever been controversial. The simmering battle between the companies and the regulator came out in the open this year. Following the directives of the federal government, the Drug Regulatory Authority of Pakistan (Drap) launched a crackdown in mid-April on the unauthorised hike in drug prices by pharmaceutical companies and pharmacies.

According to Intermarket Securities Analyst Yusra Beg, the issue was about the price hike on aged inventory, 9-15pc increase in the rates of already overpriced drugs and the mislabelling of prices by pharmacies.

Drap had announced a revision in MRPs for over 800 hardship drug cases downward revision in some cases in December last year. It was followed by a 9pc increase in the prices in remaining hardship cases and a 15pc hike for all other drugs in January.

This was commensurate with the impact of the rupee devaluation. The price revision in hardship-case drugs was allowed after three to five years of wait in some cases. In order to remain competitive, pharmaceutical companies raised prices by seven to eight per cent on average on new batches. However, reports indicated that a much higher price increase was observed in MRPs on routine visits to pharmacies by Drap officials across the country in April 2019.

The Pakistan Pharmaceutical Manufacturers' Association (PPMA) clarified...