40 drugs manufacturing halted on rupee decline, inflation

ISLAMABAD: Pakistan Pharmaceutical Manufacturers’ Association (PPMA) urged federal government to provide it level playing field to fulfil the requirements of local drugs manufacturers and meet the export targets of $1 billion till end of fiscal year 2015-16.

PPMA representatives led by M Jawed Akhai, Chairman, PPMA, submitted, the challenges faced by the pharmaceutical sector of the country during the Pakistan Pharmaceutical Industry “National Policy Dialogue” held on September 20, 2013. Speaking with media persons, Jawed Akhai informed that the local pharmaceutical industry has been facing the issues and

challenges including sales tax on pharmaceutical industry, pricing of medicines, dysfunctional DRAP which has pushed the local pharmaceutical industry to the wall.

He said that this industry has huge potential to contribute to boosting country’s economy and is providing the highest white collar jobs to the people of Pakistan. The chairman PPMA was of the view that if government provides them level playing field, the pharmaceutical industry will be able to meet the set export targets of $1 billion till end of fiscal year

2015-16; from the current export of $ 200 million. Moreover, in Vision 2020 these targets are set at $2 billion. He maintained that “Among manufacturing based exports in Pakistan, Pharmaceutical Export – mainly by National/Generic Pharma is the Seventh Largest Category and is growing at double the rate of total export of the country”.

He informed that manufacturing of about 40 essential drugs had been stopped due to rupee devaluation, inflation and escalated expenses, which rendered the production of these products non-viable at the prevailing prices fixed by the DRAP. He also informed that 61% of the 28 top selling pharmaceutical brands are cheaper in Pakistan than in India. Jawed Akhai said that Ms. Saira Afzal Tarar also understands the issues and also apprised Mr. Ishaq Dar, on his arrival at the subject dialogue, regarding the genuine request of the Pharma industry for price increase. He said that already four (4) MNCs have closed their operations in Pakistan, one (1) is in negotiation and couple of more is planning to shut down their pharmaceutical plants.

Jawed Akhai said that all taxes and duties in effect are actually built in the final price of medicines and are ultimately being paid by the consumers/patients. To give relief to the ailing patient, he suggested several options that are a) zero rating status should be given to pharmaceuticals products or b) government should make suitable amendments in the Sales Tax Act, 1990 whereby granting exemption from levy of Sales Tax on pharma packaging and indirect materials both at import as well as local supplies. Adding to that, he said that all services (including utilities) should be made exempted for registered Pharma companies.

He mentioned that since the last one year, the DRA has imposed exorbitant fees on the Pharma industry for giving approvals and has enhanced the same many folds that is 300% to 500% and even in few cases upto 50 times, thereby have an additional annual impact of at least PKR 2 Billion rupees which again will ultimately be borne by the patient as it becomes part of cost of the product.

He also recommended amendments to the Drug Registration Policy of the DRAP to allow registration of only those imported brands which are manufactured at FDA, MHRA & EMA approved plants and sold freely in the regulated markets as also being done by India & Bangladesh. Simultaneously, chairman PPMA greatly stressed the need of regulations which ensures minimal involvement of DRAP into the commercial aspects of Pharma industry.

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