Pharmaceutical firms concerned about their future

Ahead of the annual budget announcement today, there is anxiety among pharmaceutical companies over their revenues, amid mounting concerns over government policies specific to their line of work.

In the past few years, the rising flow of pharmaceuticals from foreign producers such as China has been at the expense of legitimate companies with interests in Pakistan.

To make matters worse, there has also been a proliferation of pharmaceutical products by relatively new companies that have entered the country.

The failure of the government to clamp down hard on counterfeit products has prompted foreign companies, including pharmaceutical firms, to dub the country as a major capital of counterfeit goods.

Faced with such a difficult prospect, some companies have even gone to the extent of seeking restrictions on pharmaceutical imports from foreign countries unless there is a principle of reciprocity, which is that Pakistan should allow such imports from countries that are also willing to open up their markets for pharmaceutical imports from other countries.

The bottom line is indeed the profit margin for international companies active in Pakistan. Such companies have complained that opening up the market to imports from elsewhere would jeopardise their interests.

However, the case of Pakistani companies notwithstanding, companies with higher costs, albeit justifiably, must eventually face up to the reality of tough competition in an open market-place.

This is essentially the point that has much to do with the way the principles of business work in an open market place. For many consumers, the main guiding principle towards establishing the legitimacy of any company must have much to do with the price of the end products.

Many developing countries indeed increasingly seek to put out licences for the local production of medicines even in the face of objections from mainstream regional and global companies.

It is also not surprising that smaller to mid-sized companies from the developing world have stepped in to the picture and have become rising players on the bloc.

At the same time, some of the companies that turn to the Pakistani government in search of intervention in protecting their interests have essentially got the picture all wrong.

In spite of their substantial effort to build up large bits of support from influential quarters, companies must recognise that they are pitted against the very powerful reality of the end users and consumers.

Sceptics on this issue must understand that Pakistani consumers would much rather prefer to buy medicines that are lower in cost and, in their view, also offer equal benefits as other more established products.

In the process, it is very likely that Chinese companies are bound to consolidate their presence in Pakistani in the coming years simply by reaching out to more and more clients.

The solution to this dilemma lies in a two-fold mechanism that is essential for any business that wants to establish and consolidate its presence in Pakistan. On the one hand, a business that considers itself under attack must form a network or two with likeminded businesses in order to lobby in support of its vital interests.

In recent times, businesses have adopted such networks to push for their causes, thereby proving that businesses can influence policies.

On the other hand, it is also essential for companies to educate the public to make the choice between products. Once the public accepts the difference, some may be willing to pick the higher cost product.

The writer is a journalist based in Pakistan.