Pakistan has a very vibrant and forward looking Pharma Industry. At the time of independence in 1947, there was hardly any pharma industry in the country. Today Pakistan has about 400 pharmaceutical manufacturing units including those operated by 25 multinationals present in the country. The Pakistan Pharmaceutical Industry meets around 70% of the country’s demand of Finished Medicine. The domestic pharma market, in term of share market is almost evenly divided between the Nationals and the Multinationals. The National pharma industry has shown a progressive growth over the years, particularly over the last one decade.
The industry has invested substantially to upgrade itself in the last few years and today the majority industry is following Good Manufacturing Practices (GMP), in accordance with the domestic as well as international Guidance. Currently the industry has the capacity to manufacture a variety of product ranging from simple pills to sophisticated Biotech, Oncology and Value Added Generic compounds. Although Pakistan ‘s pharmaceutical and healthcare sectors are expanding and evolving rapidly, about half the population has no access to modern medicines.
Clearly this presents an opportunity, but much more work needs to be done by the government and industry’s stakeholders. The value of pharmaceuticals sold in 2007 exceeded US$1. 4bn, which equates to per capita consumption of less than US$ 10 per year and value of medicines sold is expected to exceed US$2. 3 B by 2012. Pakistan is a developing pharmaceutical market, with a large population and economic progress evident, but per capita drug spending was rather low at around US$9.
30 in 2007. Private spending accounts for 65% of total healthcare expenditure sourced through out-of pocket payments, international aid and religious or charitable institutions. Pharmaceutical spending accounts for less than 1% of the country’s GDP, comparable to levels in some neighboring countries but above that in some of the South Asian countries. The forecast period is likely to witness the marginal strengthening of the generics sector, albeit more in terms of volumes than values.
The share of generics is also likely to increase further as major drugs come off-patent in the near term, to the likely benefit of the generics-dominated local industry. The Pakistan pharma industry is relatively young in the international markets with an export turnover of over US$ 100 Million as of 2007. Pakistan Pharma Industry boasts of quality producers and many units are approved by regulatory authorities all over the world. Like domestic market the sales in international market have gone almost double during last five years.
The pharma industry is focusing to an Export Vision of USD 500 Million by 2013. In the meantime, exports are also likely to be boosted by new regional and global opportunities. The Pakistan Pharmaceutical Industry is a success story, providing high quality essential drugs at affordable prices to Millions. Technologically, strong and self reliant National Pharmaceutical Industry is not only playing a key role in promoting and sustaining development in the vital field of medicine within the country, but is also well set to take on the international markets.
Analysis of Pakistan Pharmaceutical Industry: Porter’s five forces model is used for industry analysis. Potential Entrants Suppliers High Substitutes Moderate High Low Buyers High Rivalry Among Existing Firms 1) THREAT OF NEW ENTRANTS Entry in Pharmaceutical industry of International standard require high level of market understanding and technological know how it needs all in one skill, knowledge and abilities of the employees and advanced manufacturing and laboratory system which needs a large sum of investment but in Pakistan the situation is quite different because of Government’s inclination towards National pharmaceutical industry and corruption in providing licenses to them.
2) BUYERS The prices of medicines are fixed and it is an emergency good people are bound to buy them for their cure from disease or prevention so there is no bargaining power of buyers in pharmaceutical industry. 3) SUPPLIERS Pharmaceutical industry has various suppliers of raw materials and packaging.
Glass industry is one of the major suppliers of the pharmaceutical industry; agriculture sector is also required for supply of the plants to get some extracts from them, biochemical industry other packaging materials like aluminum, paper, and plastics. 4) SUBSTITUTES There are substitutes available in form of herbal and homeopathic medicines and various house hold cures. 5) EXISTING COMPETITORS The competitors in pharmaceutical industry are all those who have extensive knowledge about there products and are manufacturing high quality medicines. In terms of generic medicines industries face a tough competition.