Leaders of Pakistan's pharmaceutical industry have condemned the cabinet's recent unanimous decision to grant Most Favoured Nation (MFN) trading status to India.

Before any such move can go ahead, Pakistan's government must implement some protections for the domestic industry, as it cannot possibly compete with India's on any level, speakers have told a conference organised by the Lahore Chamber of Commerce and Industry (LCCI) to discuss the issue.

India's pharmaceutical industry numbers 20,000 companies with total annual sales of around $15 billion, growing at 10% a year and standing in third place globally in terms of volume, with a 13% share of the world market. In contrast, Pakistan's drug industry numbers 600 firms, is worth $1.6 billion and accounts for just a 1% global market share, the conference heard. 

Nor can the two industries be compared in any way in terms of innovativeness, R&D, pricing structures, production costs or, crucially, the availability of raw materials - Indian drugmakers can obtain these domestically but Pakistani firms have to import them, said speakers.

The industry has also attacked the Pakistani government's decision to devolve pharmaceutical pricing and regulatory responsibilities from the federal level down to the country's four provinces. The devolution, which took place last July, has removed uniform standards, and this has led to higher costs and prices for manufacturers and consumers, with the retail costs of medicines having gone up 50%-200% last year, according to local reports.

Moreover, the fact that none of the provinces has yet developed the expertise to carry out these new responsibilities has serious implications for public health, experts warn.

The absence of a centralised drug regulatory authority is also harming Pakistani drugmakers' attempts to increase their export trade and coordinate with international agencies such as the World Health Organisation (WHO), and risks the spread of substandard and counterfeit drugs in the domestic market. Moreover, the lack of central intellectual property control means that different categories of drugs could be registered in the various provinces under the same brand name, they add.

- India granted MFN trading status to Pakistan in 1996, but broke off negotiations on a reciprocal arrangement after the November 2008 attacks on Mumbai by a militant group allegedly based in Pakistan, in which 164 people were killed and more than 300 were injured.

Official figures put the value of Indian exports to Pakistan in 2009-10 at $1.2 billion, while Pakistani exports to India were worth $268 million.