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An Analysis of Pakistan’s Pharmaceutical Sector

Numerous studies have highlighted that Pakistan’s pharmaceutical industry has the potential to become the top export of Pakistan. The pharmaceutical industry is crucial for the health and way of life of any nation and its people. While the average global health spending per capita is USD 1,100/capita, Pakistan’s average health expenditure per capita is USD 43/capita, a substantial difference with a much weakened public health care system.

Pharmaceuticals in Pakistan, both branded and generic, are developed, produced, and marketed by the pharmaceutical industry. Pharmaceutical companies mostly trade in over-the-counter, generic, branded, and branded generic medications. Companies may also engage in contract development or manufacturing when they offer a different company a whole range of services from drug development to medication production.

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Don Valley Pharma is one of the best medicine companies in Pakistan and a global exporter.

Pharmaceutical sector and the government laws

The DRAP regulates pharmaceutical product prices in Pakistan, and pharmaceutical businesses are not permitted to adjust these prices on their own. The DRAP must give its consent before any price increases or new product price determinations are made. Prices are changed under the Consumer Price Index (CPI).

Manufacturers should take heart from the fact that, according to changes made to the Drug Pricing Policy 2018. DRAP is now required to reply to requests for price revision within 30 days of receipt; otherwise, the businesses’ proposed price increases will take effect.

Approval by Drugs Regulatory Authority of Pakistan:

The Drugs Regulatory Authority of Pakistan must approve all pharmaceutical products. And the regulatory division maintains a thorough quality check on the manufacturing procedure and ingredients to be utilized.

In the last few years, Pakistan has experienced several reforms and regulatory changes to guarantee the distribution of safe and effective medications to the public. The nation became a full participant of the World Health Organization’s (WHO) Program for International Drug Monitoring in November 2018. (WHO-PIDM). The main goals of this idea, which was formed in 1968, was creating a pharmacovigilance system in member nations. And coordinating efforts at the national and worldwide levels to promptly inform the public of any pharmaceutical safety alerts. Pakistan will have access to the corresponding WHO databases “VigiBase” and “VigiLyze” with full membership status. And allowing it to execute signal recognition and signal to strengthen tasks.

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Talking about pharmaceutical companies in Lahore, Don Valley Pharma is one of the biggest & trusted names in the sector.

The growth of the Pharmaceutical sector

The worldwide pharmaceutical industry’s revenue, which was $1,265 billion at the end of 2020. And it’s projected to increase by 7.5% annually to reach $1,570 billion in 2023.

Even more, growth is anticipated for the pharmaceutical industry’s manufacturing sector. The world’s pharmaceutical manufacturing industry is expanding as a result of the aging population in developing nations, the increased focus on elderly patients & their homecare services, the high incidence of cardiovascular diseases, the rising demand for home healthcare, and the rise in cancer and diabetes cases. From 2021 to 2030, the global pharmaceutical manufacturing market is anticipated to expand at a notable compound yearly growth rate of 13%.

The sector’s overall production increased throughout the year 2021. Both local enterprises and multinational corporations are present in the sector.

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Because of the country’s emerging middle class, although low per capita healthcare spending, and growing population. The sector’s revenue has consistently increased throughout the years and is predicted to continue. 

Growth from vaccinations:

Profit growth from vaccinations and COVID-19-related medications will also provide the industry with a boost. Long delays in price adjustment will be avoided following the changes to the DRAP pricing laws.

The sector’s profit margins have held up well despite the pandemic’s onset. The margins have recently grown even further as a result of stable exchange rates and historically low-interest rates. The sector’s margins are anticipated to remain stable while other parameters remain constant, particularly exchange rate because the companies in it do not engage in any price competition.

Export of pharmaceutical products from Pakistan has expanded dramatically as a result of the disruption in the global supply chain and the rise in demand for pharmaceutical items being efficacious and economical. As long as the COVID-19 pandemic condition exists, exports are anticipated to rise for products and organizations with efficacy, economy and strong supply chain network.

Some setbacks for the pharmaceutical sector:

To meet the demand for APIs, a fundamental raw ingredient, the sector is heavily reliant on imports. According to estimates, imports satisfy 95% of the APIs’ needs, with domestic production accounting for the remaining 5%. The inherent risk of supply chain interruption and price changes is considerably increased by a heavy reliance on imported raw materials and a fluctuating exchange rate.

It is getting more challenging for R&D costs to be passed on to customers as a result of DRAP’s connection of the price increase with CPI. Because of this, multinationals’ market share has shrunk, and they may keep leaving Pakistan’s market. 16 multinationals, including Johnson & Johnson, Bristol-Myers Squibb, Merck Sharp & Dome Limited (MSD), Organon, and others, have left Pakistan’s pharmaceutical sector in the past ten years.

The handling, storage, and transportation facilities operators must be careful because of the nature of APIs and medical equipment. Therefore, a reliable supply chain is crucial for pharmaceutical manufacturing companies in Pakistan which further add on in the product cost.

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The syrup shown in the above picture is manufactured by Don Valley Pharma, one of the best pharmaceutical companies in Lahore Pakistan.

Large Scale Manufacturing

Large Scale Manufacturing (LSM) is crucial for economic expansion because of its connections to other industries. Its percentage contribution to Pakistan’s GDP is 9.5%. In 2020, the Pakistani government and SBP offered several incentives to help businesses and boost economic activity. The economy began to benefit from the stimulus measures as the LSM saw a gain of 9% in 2021.


One of the most highly controlled economic sectors is the pharmaceutical industry. The businesses functioning sector need clearance for practically everything, including pricing determination and changes. Given the significance of the industry in the healthcare system, strict restrictions are necessary. Furthermore, the nation needs regulations that are forward-thinking to support research & development for new molecules, API’s domestic production, exports boosting policy, etc to strengthen the sector in the long run.

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