Pharmaceutical sales in Pakistan are expected to rise to US$1.89 billion this year from $1.79 billion in 2010, and to grow an average 9.5% a year to 2015, by which time the market will be worth $2.41 billion, say new forecasts.

Pakistan's drug market is "moderately large" by Asian standards and bigger than more dynamic markets such as Vietnam, but its annual per capita spending on medicines totals just $10, which is far below the regional average, says the study, published by Business Monitor International (BMI). Moreover, market access in the country is challenging and operational risks are high, it adds.

The expected growth this year in sales of both prescription and over-the-counter (OTC) medicines will be largely due to the knock-on effects of Pakistan’s humanitarian assistance programme and pricing pressures, plus higher inflation levels, according to the study. Following the projected average growth of 9.5% a year to 2015, BMI adds that, with a stable political and security situation, there is potential for the pharmaceutical market to expand significantly, reaching a value of $4.13 billion in 2020. However, it cautions that, with inflation expected to average around 7% over the forecast period, real growth in pharmaceutical expenditure is expected to be much lower.

Access to adequate health care for much of Pakistan's rural population is a major barrier to the market's development and, with multinational firms dominating the sector, the country has a significant negative trade balance in pharmaceuticals. The domestic industry is focused on generics but there are signs that the larger locally-owned companies are looking to move up the value chain, says BMI. For example, the largest domestically-owned manufacturer, Getz Pharma, has recently announced plans to invest in the local production of pegylated interferon, as part of its strategy of producing high-value, hard-to-make generics.

Meantime, Pakistan's federal Health Minister, Nargis Saith, recently told local drug industry representatives that the government will be introducing the new national drug pricing policy "soon," and that the drug licensing system is being upgraded, with the entire processbeing computerised, from submission of applications to issuing of licenses. The registration of new drugs is being temporarily halted to enable the Drug Registration Board to update the system, she said, and urged drugmakers not to exploit the situation by creating artificial shortages of life-saving medicines.

The Express Tribune newspaper had earlier reported concerns that some multinational drugmakers might resort to such tactics if a proposal by the government to increase drug prices by 7% across the board, as part of the new pricing policy, was rejected or delayed by the Economic Coordination Committee (ECC), which must approve such a measure.

There has been no across-the-board price increase since 2001 and, last week, the Parliamentary Secretary for Health, Mehreen Razaque Bhutto, told the National Assembly that the Ministry of Health has imposed penalties and issued notices on 37 drug manufacturers for illegally increasing drug prices.