Government actions 'hindering Pakistan's drug industry'

The companies say that a new requirement imposed by the Pakistani government for the separation of drug production lines is raising costs and reducing the ability of local manufacturers to compete in the marketplace.

Pakistan's internal market for drugs is valued at around $1bn (€747m), but exports remain small at around $50m a year, dwarfed by the $2bn in drug exports achieved by India.

Nevertheless, Pakistan has been working to raise the competitiveness of its drug industry both at home and in international markets, including a 50 per cent subsidy to aid registration of products overseas, favourable bank loans, and subsidies of freight and consultancy. But the industry says the latest move undermines these efforts.

Specifically, the Health Ministry has ruled that quinolone antibiotics, psychotropic drugs, synthetic hormones, non-cephalosporin antibiotics and tuberculosis treatments must be separated physically to avoid cross-contamination during manufacture.

It maintains that the move is necessary because international quality standards from the World Trade Organisation and US Food and Drug Administration (FDA) are not being implemented by the domestic drug industry. not being implemented in Pakistan. But local industry leaders claim that these directives are not mandatory under international Good Manufacturing Practices regulations, and that insistence on their implementation is not justified.

Any regulations which adversely affect the industry must be removed, they said adding that the government should also end disparities in drug pricing, as this is having a negative effect on Pakistan's industry. They also claim that government interference and other factors such as slow approval of Medicine Registration Certificates is driving potential export orders to India.

Meanwhile, the multinational companies, which still make up the top 10 suppliers of finished drugs in Pakistan, continues to cite strict government control over pricing and the poor state of regulatory infrastructure as factors behind slow development in recent years.

Earlier this year, a group of local drugmakers put forward a plan, entitled PharmaVision 2010, to the Export Promotion Bureau, which sought to increase domestic pharmaceutical exports to $1bn by 2010. Authorities in the Punjab are also currently setting up a $17m site with 53 production and service units.

Meanwhile, to encourage pharmaceutical sector investment, Pakistan's Central Board of Revenue is to apply a 10 per cent concessional customs duty rate on raw materials imports of amylopectin hydrolysate, a modified plant-based starch. The concessionary rate has been imposed after lobbying from local pharmaceutical producers.

The duty will likely add fuel to an ongoing dispute with the Indian drug industry, which has accused Pakistan of discriminating against Indian pharmaceutical imports. The Indian Drug Manufacturers Association has alleged that Pakistan has raised the duty on imported bulk drugs from India from 10 to 35 per cent.