‘Make in Pakistan’ – unlocking the potential of scale

Kashif Mustafa Qadri

Pakistan Pharmaceutical industry despite immense potentials unfortunately, is still behind India and Bangladesh, specially in exports. The reasons obviously are poor drug regulations, uncompromising attitude of the Drug Regulatory Authority (DRAP) and above all Pakistan’s inability to secure quality certifications from international agencies.
The situation therefore, demands that DRAP make rules that may include strict adherence to the Current Good Manufacturing Practice (CGMP), a regulation enforced by the US Food and Drug Administration (FDA). CGMP provides proper design, monitoring, and control of manufacturing processes to facilitate Third Part Contract — a facility which gives India and Bangladesh a clear edge over Pakistan.
It is high time that the current legislation (SRO 152(I)/2014 dated March 05, 2014 which unduly restricts contract manufacturing for export purposes thereby limiting MNCs from providing access of the same medicines to the local population be revised accordingly. Pakistan should allow Contract Manufacturing to help local manufacturing operations reach efficient scale and become competitive in the global market (leveraging on the global reach of their MNC partners) On the other hand traceability of drugs to ensure consumer protection can be enhanced by assigning dual responsibilities on both the CMO as well as its MNC client.
Frankly speaking such restrictions have unfortunately proved counterproductive and have not helped in building scale in the local manufacturing sector. While selling prices remain under a draconian regulatory ceiling, restricting manufacturers from gaining production efficiencies has led to a net reduction in productivity of the local manufacturing sector thereby driving out major global multinational companies from investing in Pakistan. Limiting the manufacturing of drugs by the reputed companies has also resulted in the rise of spurious drugs in the market. In the absence of supportive rules from DRAP, the industry in India as well as Bangladesh continue to surge ahead building on the scale of the local CMOs and benefiting from partnerships with MNCs to access global markets.
There is an urgent need for reforms in the existing regulatory framework in order to unlock the potential of ‘scale’ within the local pharmaceutical manufacturing sector of Pakistan and securing access to global markets for products manufactured locally. Unfortunately the existing regulatory mechanism governing the use of CMOs in Pakistan does not take into account the vast opportunities available to local manufacturers and is, in fact, constraining the local industry from benefiting from partnerships with global players.
There is no denying the fact that by fostering or encouraging active partnerships between local manufacturers and global players, Pakistan can improve quality standards in local manufacturing, facilitate transfer of technology, best practices and provide global reach and access to local manufacturers.
In the absence of any encouragement and support from the government for massive manufacturing of drugs through third party contracts, the pharmaceutical companies operating in Pakistan are not in a position to continue operations in the country. As a result 50 per cent of the multinational companies have wound up and moved out while the remaining 50 per cent have either reduced their respective local manufacturing operations or have closed their plants for want of efficient utilization. The manufacturing facilities of most of the local pharmaceutical companies have also remained underutilized, making them inefficient and uncompetitive.
There is a need to review the ‘Contract Manufacturing’ policy, making it more conducive to foreign investment. If it could be relaxed to allow more than the maximum limit of 30 products and reconsider the restrictive time limit of only 30 months, this would increase the ease of doing business in Pakistan. This would be very much in line with contract manufacturing policies adopted in other SAARC countries which would encourage other MNCs to invest in Pakistan and create an environment for transfer of technology and knowledge to the local industry as well.
CMOs are a response to the competitive international nature of the pharmaceutical market as well as the increasing demand for outsourced services providing drugs and how a friendly contract manufacturing policy will incentivize plant upgrade and ultimately raising the standard of drugs manufactured in Pakistan.
However, according to a report prepared by RA Consultants (SMC-Pvt) Ltd for DRAP, “This policy shall be free of restrictions on type of drugs to be produced by contract manufacturing barring “psychotropic, narcotic products”.
The policy shall ensure development of the industry to meet international standards. The policy shall focus on attracting outsourcing companies from global market, like it is being done in case of India, China, Singapore, South Korea and Malaysia etc. This development thus undertaken by DRAP will help economic growth of country in shape of attracting foreign companies for contract manufacturing, thus earning of foreign exchange and duties and taxes collected by the government.
The proof of this is evident from development of a Contract Manufacturing Industry for foreign companies and earning of foreign exchange by both India & Bangladesh. This development also resulted in 175 FDA approved plants in India and about a dozen plants approved by FDA & MHRA in Bangladesh. A well formed policy that always results in gains for the industry in general & country in particular is imperative for Pakistan today more than ever because of dwindling economy of the country. Such policy will be a great service to the country by DRAP.”