Are pharma MNCs leaving Pakistan?

ISLAMABAD: The back-to-back announcements made by multinational companies (MNCs) for closing their businesses in Pakistan have sent a shockwave among the healthcare professionals and patients.

However, the drug regulatory authority brushed aside the reports about the exit of multinational companies from the country, saying rumours are being spread for mounting pressure on the government and the regulator to increase drug prices.

Earlier this week, Eli Lilly Pakistan (Pvt) Limited had announced that it was ceasing its promotional efforts in Pakistan from November 09, 2022. Recently, Fresenius Kabi Pakistan’s Bureau officials claimed, “German based Fresenius Kabi Pakistan Pvt Ltd has closed its operations in Pakistan and is the latest MNC to exit. They made anaesthesia meds and meds for oncology, nephrology, autoimmune etc.” They confirmed that Fresenius Kabi was not comfortable in doing business in Pakistan and decided to wind up its operations in the country.

However, the Drug Regulatory Authority of Pakistan (DRAP) claimed rumours are doing the round in the country to pressurise the regulator and the government in a bid to increase prices of medicines. They argued that the multinational companies were actually offering to set up their manufacturing plants in the country.

It is worth mentioning here that last month, Pakistan’s largest manufacturer of pain medicine paracetamol tablets, GSK Consumer Healthcare, had announced to cease production of their tablets and syrups by declaring force majeure, arguing that producing the medicine was no more financially feasible for them. The company resumed the production of medicine after the government allowed a 25 percent increase in paracetamol products’ prices.

“Multinational pharmaceutical companies are winding up their businesses and activities in Pakistan as the country now lacks business-friendly policies for them. Eli Lilly and Fresenious Kabi are the latest MNCs while earlier Merck, MSD and Jhonson and Jhonson have left Pakistan,” Ayesha Tammy Haq, Executive Director Pharma Bureau, which represents the multinational pharmaceutical companies in Pakistan, told The News.

Ayesha maintained that multinational pharmaceutical companies were in Pakistan for earning profit but in doing so, they were also providing top-of-the-line medicines and health products to the people of Pakistan. She added prices of medicines and other products are not rising up in proportion to increase in cost of production and cost of doing business in the country, compelling multinational companies to wind up their businesses or resort to massive downsizing.

A senior member of Pakistan Pharmaceutical Manufacturers Association (PPMA) told The News on the condition of anonymity at least three more multinational pharmaceutical companies are planning to quit Pakistan in 2023 as cost of doing business has become unbearable for them. “Eli Lilly is a multi-billion dollars company of the world, which hardly earns a few million dollars in Pakistan. Due to rupee depreciation, cost of their products especially their insulin is increasing but prices of their products are kept unchanged in Pakistan. These companies are either quitting, resorting to massive downsizing or planning to leave the country in the next few months”, the PPMA official added.

In contrast, the Drug Regulatory Authority of Pakistan (DRAP) officials said some companies were resorting to cost-cutting measures including ending promotional activities and handing over their distribution to other companies, which does not mean they are winding up their businesses in Pakistan.

“As far as Eli Lilly is concerned, it has only ceased its promotional activities in Pakistan but their products would continue to be marketed by a local pharmaceutical distribution company,” a senior DRAP official told The News.

In fact, Eli Lilly officials have expressed their willingness to set up their insulin manufacturing plant in Pakistan and sought DRAP’s cooperation in this regard, claimed the DRAP official, who wished not be named.

Similarly, Fresenious Kabi Pakistan (Pvt) Limited, which does not have any manufacturing plant in Pakistan, is a 24-member set-up in the country and they have handed over their distribution and marketing rights to another company called Moller and Phipps Pakistan, the official added.

DRAP has launched an investigation into claims that multinational companies were winding up their businesses in Pakistan, saying different tactics were being used by the pharmaceutical sector to increase the prices of medicines and other products by up to 40 percent while the government was not willing to accept these demands in the interest of people.