Drug sector sees adverse impact on local production
Karachi: Business community, represented by multiple trade bodies, supports closer trade ties with India, but the drug sector anticipates an adverse impact on local production.
The industry has projected its position in its interaction with the government and media on several occasions over the past few months as Pakistan is believed to be inching towards awarding non-discriminatory market access (NDMA) status to India this month.
According to a presentation made by the Pakistan Pharmaceutical Manufacturers Association (PPMA), vast difference exists in the dynamics of drug sector in India and Pakistan. Pakistan’s pharma industry is worth $2 versus $40bn Indian industry and exports fetch $200m here against $20bn in India.
Due to sheer size of Indian economy/generic industry, the neighbouring country has huge economies of scale while Pakistan would be unable to compete on equal basis in Indian market.
Dr Waheed said that MNCs would shut down their plants and serve market from their facilities across the border.
Currently a lot of toll-manufacturing for MNCs is done by local medicine makers and the business will too shift to India.
After the initial dumping period in which low-cost players are driven out, prices will go up again.
Out of 700 manufacturing units, 70pc will shut down, creating unemployment, besides causing government’s revenue losses.
Some of the major obstacles in free or bilateral trade with India are existence of non-tariff barriers, trust deficit, specific visa regimes, no direct banking channels etc.
The association called for amending Drug Registration Policy of the DRAP to allow registration of only those imported brands that are manufactured in plants approved by the registered bodies and sold freely in US, UK, EU countries, Switzerland, Japan or Australia.
The government has issued a negative list of 1,209 items, including 49 pharmaceutical products that India cannot export to Pakistan.
Some of the items included in the negative list are Ibuprofen, Paracetamol, Penicillin, Ampicillin, Insulin, eye drops, ointments and vaccines for veterinary use, amongst others.
To ensure that the local pharmaceutical Industry remains competitive with imported finished pharmaceutical products, it is essential that a level-playing field be provided to the local Industry by way of a transparent and predictable regulatory structure, processes and policies.
The pharmaceutical industry in India is greatly supported by their government by way of subsidies and incentives, including SEZ status, which gives Indian industry preferential access to electricity and gas at tax-free rates.
India also employs several non-tariff barriers to imports into its market, which must be countered first and a level-playing field created before opening up the local Pakistan market to the Indian industry.