Pharma Industry Shortage

Pakistan’s economic condition has been precarious for some time. The country has been in a balance-of-payments crisis for the last couple of weeks. It was understood that the eight-year low of $4.3 billion in reserves can only provide an import cover of three weeks. This fear has now actualised as raw material for the manufacture of medicines has been held up at the Karachi port due to the current account deficit. This is a critical situation as the Pakistan Pharmaceutical Manufacturers Association (PPMA) has warned that this hold-up can lead to a shortage of life-saving drugs.
95% of pharmaceutical raw materials are imported and if interventions are not kickstarted immediately, the lives of thousands of patients across the country will be at stake. Added to this, the UK’s premier development finance institution has described the state of Pakistan’s economy as “very fragile”. This indicates the uncertainty around foreign investment and the severity of the dollar shortage. Food and energy imports will be next if banks keep refusing to open letters of credit.
Already, drug manufacturers in the country had been producing 95% of medicines despite price regulations. According to the PPMA, this shortage of raw and packaging materials has targeted as many as 770 drug producers in the country. There are fears that if the situation is not circumvented, indigenous drug manufacturing will stop.
While the situation is alarming, the SBP governor has assured that the country will start receiving dollar inflows from next week. He also assured that banks have been directed to prioritise opening the LCs for food and pharma items for export-oriented industries. It is hoped that this change will come to fruition and that industrial output can get back on track. However, it also bears mentioning that the IMF tranche is now the only way forward. A resumption of the Programme is getting more critical by the day.

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