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Challenges Fasces by MNCs in Pakistan Due To Unethical Practice of National Pharmaceuticals

Yasir Mehmood*

Faculty of Pharmacy, University of Central Punjab, Lahore, Pakistan

*Corresponding Author:
Yasir Mehmood
Faculty of Pharmacy University of Central Punjab, Lahore, Pakistan
E-mail: [email protected]

Received date: 26/04/2016 Accepted date: 04/05/2016 Published date: 11/05/2016

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The purpose of this study is to give a broad overview of the main challenges faces to Multinational companies (MNCs) of pharmaceuticals in Pakistan. The aim of study is also investigate ethical challenges of pharmaceutical companies in Pakistan. In Pakistan market pharmaceutical companies influence the physicians’ or professionals and some time force them to prescribe their products by all means. In Pakistan, there is no strong mechanism to monitor the drug promotional movement by pharmaceutical industry although the fact is that there is sufficient evidence that irrational pharmacotherapy is gradually more encountered even in the urban countries due to unethical practices of pharmaceutical promotion. This paper focus on the MNCs Pharmaceutical industry and the changes that have occurred exacting over the last 10 years as a result of the overall economic decline, the increasing cost of healthcare, unethical practice and lack of quality. Some major challenges facing the complex MNCs Pharmaceutical business are focused and discussed in this article. This include the unethical practice of general physicians, decline in the new discovery, approval and marketing of new chemical entities (NCE) or drugs, competition from generics drugs, low quality products, corruption in regulatory authorities in Pakistan, regulatory pressures, slow growth in the Pakistan market (potential market) and therefore the need to explore other markets. We have also discussed in this article some local and MNCs brand quality, and we found that MNCs are meeting qualities parameters. There is strong proof that associations between local industry and physicians influence the prescribing behavior along with clinical decision making.


MNCs, Unethical, Competition, Regularity, Pharmacotherapy.


Pakistan economy; from few years have suffered more due to terrible economic conditions and also due to the war against terrorism. Furthermore, the economy also faces the domestic inflation, very slow economic growth and substantial devaluation of the Pakistani rupee against the all major currencies. No doubt that the government is taking the important steps to come out of this most horrible situation, but it lacks the urgency and also across the board adjustments for the uplift of the economy. Let us see the circumstances on the global basis before the overview of the Pakistan Pharmaceutical market. The Pharmaceutical market of whole world is valued about 650 billion US$ (2008-09), with an annual 8% growth rate and continuing with the rate it will cross the value of 1.1 trillion US$ by 2015. On the basis of value the global market is governed by Japan, EU and USA with a share of 12%, 28% and 48%, respectively. The rest of the world has only 20% of the total Pharmaceutical market. Looking at the Pakistan Pharmaceutical market, it is very persistent and challenging. In Pakistan about 750 Pharmaceutical companies are operating. Out of these companies 400 are manufacturing units. As mentioned earlier inflation and devaluation have a very severe impact on the operating margins. This is also one of the most important reasons that currently Pharmaceutical manufacturing is facing hard challenges. When we look back to the Pakistan Pharmaceutical industry, the picture has totally changed. In the early nineties Pakistan Pharmaceutical manufacturing was run by the MNCs and producing quality products or produce products according to cGMP, but during the last 16-years or so, the picture has totally changed. Of the 400 operating units, 24 are MNCs, producing the quality drugs and they are also faces very hard environment in Pakistan. Now at this time, the ratio of MNCs and national/local companies is 40% and 60%, respectively [1-3].

Today the total volume of the Pakistan Pharmaceutical market is 1.64 billion US$, with an annual growth of 10%, which is more than the global growth of the Pharmaceutical manufacturing. In the present scenario, as the national pharmaceutical companies are taking over, about 75% need is fulfilled domestically while 25% are covered by imports. Almost all the raw materials are imported from China, India, Europe, North America and other countries, but most of the local companies import their raw material from India which is not according to specification. Because Indian raw material has low cost due to these local investors prefer Indian raw material. Of the total imports made, about 20% are from Switzerland. According to the data of 2010-015,

In Pakistan GlaxoSmithKline (GSK) tops the list among the MNCs, with a market share of 11.60% and a growth rate of 8.92%. Among the national pharmaceutical companies Getz Pharmaceutical (Pvt.) Ltd. tops the list with a huge growth of over 70% for the last three years, with a market share of 3.75%. Along with Getz Pharmaceutical another national pharmaceutical company Sami Pharmaceutical (Pvt.) Ltd also tops the list with a market share of 2.78%, ahead of some of the MNCs. But some national industries don’t follow ethics, they provide personalized gifts, family foreign tours and many other things, due to this physician always prescribe their medicines.

In Pakistan Pharma Bureau is representative body for multinational companies (MNCs); seeks an expected and transparent regulatory environment, which includes registration of drugs and clearing up the ever increasing backlog. If one member of Pharma Bureau exits the Pakistan it would, on normal create a gap of $20 million in the medicinal market with 1,000 direct households being affected and quality of medicine also effect. Latest company to exit Pakistan was Johnson & Johnson. “Their sutures manufacturing facility has been shut down and the products are now imported from Dubai at a higher price. The result is loss of investment, precious jobs, and increase of the import bill.” In the past eight years, MNCs’ investment in up gradation of facilities to sustain Current Good Manufacturing Practices (CGMP) standards is in excess of $0.5b.This is very difficult to maintain cGMP for pharmaceutical industries. At current each MNCs with a good manufacturing facility invests roughly $3.5 million per annum towards maintaining CGMP [4-7].

MNCs industry is the largest employer of graduate students in Pakistan, providing livelihoods to over a million people (MNCs provide employment to approximately 30,000 people directly and 300,000 people indirectly).

Revenue generated by MNCs in 2015 is $1.2 billion and tax of over $160 million (equivalent to Rs16 billion). MNCs have introduced innovative molecules and breakthrough therapies, particularly for non-communicable diseases like cancer and renal failure. The MNCs in Pakistani market faces all challenges and are ensuring provision of quality world class medicines at possibly the lowest prices in the world. For example, Augmentin 625 mg is available for PKR.20 in Pakistan against £1.51 in UK and PKR.66 in India, while Humulin insuline70/30 is available for PKR.498 in Pakistan against PKR.877 in Bangladesh and PKR.617 in India. MNCs always delivered quality drugs which totally meet all pharmacopeial test not only few one. National pharmaceutical industries do not produce biological products still. MNCs are here to provide these lifesaving products. A most important multinational drug company has called it a day, decided to close up and leave Pakistan. MSD (Merck Sharp & Dohme) has winded up their business in Pakistan by selling the company to a local pharmaceutical OBS (Organon Biosciences) [8].

The pharmaceutical industry in Pakistan is subject to the most stringent regulatory control, in particular price controls. This is the reason companies are leaving the Pakistani market. Ten years ago there were 38 MNCs working in Pakistan, and today there are just 7.

Challenges to the mncs Pharmaceutical Industry

No doubt that the Pakistan pharmaceutical market is growing at a steady rate but there are certain challenges for MNCs which pose a great threat to the foreign industry.

• The first major challenge which the MNCs pharmaceutical industry faces is the total government control on the prices of all the enlisted products.

• Import of raw material which costs a lot of precious foreign exchange.

• Following the cGMP and produce quality products, majorly involve all quality control test.

• Use of quality inactive ingredients, not only active raw material.

• Rapid devaluation of the rupee against the major currencies, due to which the profit margins are shrinking.

• Increasing cost of manpower and energy.

• High R&D expenditure, which can lead to the suffering of the masses for not conducting sufficient research on the newly emerging diseases in the Pakistani environment

Limited approval of new chemical entities

New Chemical Entities (NCEs) are the compounds that emerge from the process of drug discovery. MNCs spend lot of money on research and produce new dosage form which is available in other countries, but Pakistani regularity departments are not willing to register these new dosage form.

Increased generic competition

Generic drugs have always been a huge challenge for the established big Pharmaceutical companies. Big Pharmaceutical industries expend many years and millions of dollars (approximately $800 million estimated by the Congressional Budget Office, CBO) from discovery of drug to product launch. In 1976, the estimation was $137 million dollars and by 1990 it had increased to $446 million dollars. MNCs are able to take benefit of their hard work and reserves while their patents are in effect, but after some time these patents expire, the generic drug manufacturer are able to undercut the Pharma profit margin within 6 months by producing lower cost, and in some cases very efficient alternatives. In Pakistan national pharmaceuticals companies do not spend any penny for research and development even there is no data of bioequivalence is available form Pakistani national pharmaceutical companies.

Regulatory changes and political impact

The current (2010–2015) economic slump has in many situations intensified and refocused people's attention on regulation in the Pakistan Pharmaceutical industry. There is need for the improvement in the regulatory process to meet the present needs of all the stakeholders as well as the stated and in some cases implied need to ensure that the expected profit are aligned with the cost for the insurance, services and products. This authenticity will prompt and in many cases force big Pharmaceutical companies to revamp their cost structures as governments, insurance companies, payers and patients focus on reducing the spending on healthcare. Institution order for medicine is much politicize, there is no concern with patients health, people want to make money by all illegal means. This is very difficult to get new registration of product in Pakistan; in some cases life saving products is not easily available or available in high cost. Sofosbuvir is new miracle product, but that was available at very high cost in Pakistan, only one national company has charge to deal this and that was political influence.

Major difference of quality between national companies and MNC

We have taken Diclofenac sodium injection five different companies. One brand of MNC and other four were local. We have performed all B.P tests, but fond only MNC brand according to B.P specifications. Quality does not mean assay of the products, it also involves other test like impurities found in products.

Drug promotion with qualified persons

All employs in MNCs which involved in drug promotion are qualified and pharmacist, so they are getting more pays. Budget of MNCs increase due to several quality works.

Counterfeit drugs

Intellectual Property (IP) Laws protect against IPR infringements. IPR violations are a serious cost to any research based pharmaceutical industry; it can also lead to issues such as counterfeiting and production of sub-standard drugs. Intellectual Property Rights of a researched molecule are protected by the patent. This patent has to be respected in order for innovative companies to keep coming up with life saving drugs. In Pakistan, both IPR and Data Exclusivity are relatively newer concepts but with the establishment of a robust IPR regime and the Intellectual Property Office of Pakistan, it is hoped that IPR infringements will be addressed in a more serious manner. Pfizer actively engages with the IPO and other enforcement agencies to advocate and lobby for a broader implementation of IPR laws and have entered into various industry-wide partnerships for training and capacity building of the officials (Tables 1 and 2).

Description Pakistan India
Total Pharma market $2.1b $21b
Growth rate 15% 20%
International Racking Value wise 45 13
Pharma companies 600 25000
FDA approved plant none 523
Pharmaceuticals export $180m $15.5b
Raw material supply 30% 70%

Table 1: Comparison of growth in Pakistan and India.

1 GlaxoSmithKline
2 Abbott
3 Getz
4 Sami
5 Novartis Pharma
6 Sonafi-Aventis
7 Searle
8 Ferozesons
9 Servierpharma
10 Macter

Table 2: Top 10 Pharma companies in Pakistan.

In Table 2 first company is Getz pharma by their revenue but this company is not FDA approved, so in Pakistan not quality products are selling because of unethical prescription of physician. These companies don’t spend money on R&D, or not form any new dosage form or even any international publication.

Raw material source

Mostly raw material purchased by national pharmaceutical companies from India and china, both countries has quality issues and material is not prepared in proper way. Excipients are inert materials which are combined with active substances to create a complete dosage form. Excipients always affect the rate of dissolution, absorption, metabolism and distribution in humans or animals. In Pakistani national pharmaceuticals companies have lees concern with quality excipients. China has an extensive history of product safety and public health scares, as well as government efforts to control information about them. In 2008, a toxic chemical called melamine was found in children’s milk powder, causing the deaths of at least six children and sickening another 300,000. In 2002, China was also slow to report an outbreak of Sars, leading to the deaths of hundreds of people in China and other countries.

In 2016, Police in China have arrested about 37 people for illegal sales of vaccines in a widening scandal that again has raised questions about product safety in China and a possible government cover-up. According to a current report by Xinhua news service on Wednesday, police are investigating three convicted pharmaceutical companies that might have been involved in sales of expired or inappropriately stored vaccines going back at least four years

Some Indian drug makers send low-quality meds to Africa deliberately

An analysis of 1,470 samples of two different antibiotics and two different tuberculosis drugs that were produces by India, and then sold in Africa, India, and five low-income countries elsewhere and found that sub-standard drugs were purchased in Africa by the researchers. The drugs were made by 17 different Indian industries.


In this article we emphasis on challenges faces by MNCs in Pakistan. MNCs always play important role in heath life by producing quality product in low cost. National companies don’t have proper system like Pharmacovigilance and R&D section on which MNCs spend high budget for better health. In Pakistan MNCs also spend money on charity. Government has to pay these companies and have to solve their problems. In Pakistan, there is no strong mechanism to monitor the drug promotional movement by pharmaceutical industry although the fact is that there is sufficient evidence that irrational pharmacotherapy is gradually more encountered even in the urban countries due to unethical practices of pharmaceutical promotion. This article focus on ethical practices which are not followed by all national companies and these companies are making money and MNCs are operate in many countries for developing different level of health. MNCs create employment opportunities in the host countries. It helps to create a pool of managerial talent in the host country. MNCs provide job and career opportunities at home and abroad in connection with overseas operations. Encourage the world unity all resulting in world harmony. Transfer of technology, capital and entrepreneurship. Greater availability of products for local consumers.