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Pharma Bureau Highlights Barriers to MNC Growth in Pakistan

Ayesha T. Haq urges policy changes to tackle barriers hampering pharma MNCs' growth in Pakistan.

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  • Jul 22, 2024

  • Mrudula Kulkarni

Pharma Bureau Highlights Barriers to MNC Growth in Pakistan

Ayesha T. Haq, Executive Director of the Pharma Bureau, has highlighted the challenges impeding international pharmaceutical companies' expansion in Pakistan. The regulatory environment, including the Drugs Act of 1976, DRAP Act of 2012, and Drug Pricing Policy of 2018, is one of the main barriers to their expansion. The number of multinational corporations (MNCs) entering the Pakistani market has dropped to only four, indicating the sector's challenges.

The main causes of MNC disinvestment are a burdensome tax system, regulatory obstacles, unstable economic conditions, price controls, and fake medications. Price controls have reduced margins and losses, making it economically unviable for MNCs to continue operations in Pakistan. The current pricing strategy is unworkable, causing businesses to lose money on inexpensive medications and undermining investor trust.

The lack of investment is preventing the expansion of research and development in the pharmaceutical industry, which employs trained labor and contributes to the professional advancement of Pakistani citizens. It also results in decreased dollar inflow, which is vital for the debt-ridden economy.

The Pharma Bureau is advocating for changing policy, including eliminating anti-investment laws, eliminating tax anomalies, setting reasonable and independent prices for important medications, and giving DRAP the authority to get global certifications and eliminate fake medications.

Haq believes that the government must establish a favorable business environment to attract and retain foreign investment, taking inspiration from other countries like Bangladesh, which has drawn international investment into the pharmaceutical industry and established more flexible pricing policies. If rules are changed, there is a chance for $5 billion in pharmaceutical exports and $1.5 billion in foreign direct investment. However, the potential loss from MNCs leaving Pakistan is difficult to measure.

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