Asif Misbah, while underlining issues faced by the pharmaceutical industry, said that price regulation has given rise to the false belief that pharmaceutical companies are overpricing their products. The managing director lamented that the Health Ministry revised prices back in 2001. However, surging inflation and the deteriorating economic condition of the country has significantly affected company margins, he said.
He clarified that raw material is exported in dollars and, as apparent, the dollar-rupee disparity has increased, triggering a multifold rise in the cost of raw material. This has piled up cost pressures, while margins have significantly squeezed. Referring to figures, he said that the margin before tax is not more than five percent. He added that the manufacturing cost is considerably higher compared to India and China.
He stressed on the need of a properly defined policy in this regard, as price fixing remains in the hands of the ministry. The government does not want to earn a bad name by deregulating prices and, at the same time, does not allow a company to set prices. However, he grieved that the pricing policy should work in automatic ways, keeping in view the interests of both patients and pharmacists. In addition, price control can help increase investment, he said.
While he shed light over his business, he said that his company stood at a meager Rs 2.5 million in its infancy. However, the turnover has massively increased as it stood at Rs 1.5 billion last year, making it the fourth largest company with respect to range. Macter’s first contract manufacturing client was Sandoz Pakistan in 1993. Since then, apart from a host of national and multinational companies, Macter’s client list includes Novartis (previously Sandoz), Wyeth Pakistan (Wyeth-Lederle Cyanamid Group, Reckitt-Benkiser (previously Reckitt and Colmann Pakistan Limited) Merck, Cibex, Doms, he said.
He informed that drugs production takes place under strict CGMP (Current Good Manufacturing Practice) principles, while a variety of dosage forms including liquids, tablets, capsules, dry syrups, creams and ointments, sterile ampoules, vials, metered dose inhalers can be produced. The company has been in operation for the past 27 years, while production of multinational products is a guarantee. For that matter, international teams conduct frequent visits and international audits are also carried out, he said.
Products, produced for multinational companies, are only meant for the Pakistani market, he informed. He further said that Macter International is not FDA approved; however, quality is a relative term as making of FDA approved products in the country won’t pay much, as it is quite difficult to operate with FDA in this range.
Asif expressed satisfaction over his company’s current market share, which stands at three to four percent and pointed out that 50 percent of the production is for local, while the residual 50 percent is for multinationals companies. He maintained that Macter’s products’ production for multinational companies is worth Rs 1.0 billion.
To a question, he replied that respectable companies are not involved in smuggling of drugs while multinational companies also refrain from such a thing.
Asked why the key focus of the pharmaceutical companies is always the doctor, he said that doctors are responsible to uphold interests of the patient, but unfortunately unethical and immoral practices prevail in the community. He asserted that companies should recognise their responsibility and, hence, should focus at maintaining quality on affordable prices, while marketing should also be patient-intensive.
He informed that a meager seven percent demand of manufacturing is fulfilled locally as resources are not available in Pakistan. This is because of a lack in petrochemical industry, which makes initial steps imperative for our local industry. He maintained that the industry is at formulation stage and is moving towards chemical synthesis. Certain companies have started such a thing, but it is sad that no basic research for making new drugs (molecular) is conducted in the country, he added. To a question, he said that direct consumer access is allowed in most countries, but on conditions set by respective governments. He stated that self-medication is a popular phenomenon in Pakistan, yet DTC in the country cannot prevail as pharmacies are not regulated strictly in the country. In addition, quality standards of the ministry are not same for all, he said, adding that role of the doctor could be limited through this access if it satisfies the patient to buy the same product on lower prices.
He demanded that the ministry should keep an eye on Chinese drugs, coming into the country, and should allow only those Chinese firms that are genuine. The pharmaceutical industry hires only highly qualified people, therefore, grey channel input is in the loss of the patient.
While recommending budgetary changes, he said that a sustained rise in exports has been seen and, therefore, duties should be revised on importing machines. The Ministry of Health should play its role to de-register products. Talking about future plans of the company, he said that we want to become a global company and are looking to focus on research in order to start bulk manufacturing, biologics, and drug development in collaboration with universities in next five years.
Medicine prices, inflation restrict pharma industry profits
