Abstract
Pakistan' s pharmaceutical expenditure was valued at PKR127bn (US$2bn) in 2008.
Between 2009 and
2013, BMI forecasts that the market should grow at a
nominal CAGR of 12.7% in local currency to reach
PKR230bn (US$3bn) in
2013, with population growth being a major driver. However, with inflation
expected to average 9.9% over the forecast period, drug market growth is
likely to be negative in real
terms. Our forecast has been downgraded for
Q309 in light of the worsening global economic situation.
We expect both
prescription and OTC markets to be hit in Pakistan, since the majority of
health
expenditure continues to be financed out of pocket, leaving market
growth vulnerable to deteriorating
economic conditions.
BMI' s updated
Business Environment Ratings for Q309 highlights the challenges faced by
pharmaceutical companies operating in Pakistan. The country is ranked 14th out
of 15 markets assessed in
the Asia Pacific region, with only Vietnam
considered less attractive. The country' s unstable political and
economic
situation pose significant risks to the operating environment, while the
pharmaceutical
regulatory situation, most notably patents, remain
substandard.
Despite the challenges, Pakistan has a substantial
pharmaceutical manufacturing industry, which is
largely geared towards
supplying the domestic market. According to the Pakistan Pharmaceutical
Manufacturers Association (PPMA), domestic manufacturing supplies 70% of the
country' s demand for
finished products, a figure that is supported by
trade data from the UN Commodity Trade Statistics
Database (Comtrade),
which showed that imports only accounted for 20% of Pakistan' s
pharmaceutical
consumption by value in 2007.
In March 2009, the
president of the PPMA, Zahid Saeed, claimed that the local pharmaceutical
industry
spent PKR107bn (US$1.3bn) on manufacturing facilities, which he
equated to a saving of about US$3bn
in foreign exchange on the import of
medicines. The government is largely supportive of pharmaceutical
manufacturing; however, it has recently reduced protectionist import tariffs
in a number of therapeutic
areas - recognition that domestic manufacturing
is restricted to low-tech, high-volume production.
Pakistan' s health
indicators are generally poor, particularly in rural areas, indicating that
one of the major
challenges for the government is to improve access to
healthcare. Pharmaceutical expenditure remains
largely funded out of
pocket, meaning generics are popular and expensive treatments are unaffordable
for
many on low incomes. Infectious disease remains a problem, as does
malnutrition. However, noncommunicable
chronic diseases such as diabetes
and cancer are on the rise, especially in cities.
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