Pakistan’s Ferozsons defies odds to meet urgent health needs

Waheed’s great-grandfather Maulvi Ferozuddin Khan laid the foundations of the business group in 1894 with a vision to make a meaningful contribution to education and health. Ferozsons established its pharmaceuticals plant in 1956 to meet the health needs of the newly independent Pakistan.

The founder’s vision was “to focus on commercially sustainable work that had a direct impact on human development.” His philosophy is embraced by the company to this day. “We try never to forget that medicine is for the people” and the profits follow, says Waheed who holds a bachelor’s degree in Economics from Harvard University and serves on the boards of the Lahore University of Management Sciences and several companies.

Focus areas

In the last six decades, Ferozsons Labs has emerged as one of the leading Pakistani pharmaceutical manufacturing companies, dedicated to providing advanced and affordable treatments for the Hepatitis C virus (HCV), diabetes, cancer and heart diseases through its diverse range of more than 100 life-saving products (medications and devices). A major focus for the company is diabetes, which is a leading cause of death in Pakistan, with 33 million adults suffering from it, the third highest number in the world after China and India.

Reducing the burden of Hepatitis C

Ferozsons has long been focused on treating hepatitis C, a virus spread by contact that infects the liver. Pakistan has the world’s largest population of hepatitis patients, with around 12 million infected by hepatitis B or C, according to the World Health Organization (WHO), mainly due to the re-use of syringes and unhygienic health services. Hepatitis C is curable but the treatment was previously difficult and painful, involving shots of interferon with flu-like side effects.

In 2014, US biotech company Gilead Sciences introduced a cure in the form of tablets called Sovaldi (Sofosbuvir) for treating hepatitis C. Ferozsons immediately signed a special access agreement with Gilead to make this revolutionary drug available to Pakistanis.

The drug, which cost $84,000 for a 12-week course in the US, was made available in Pakistan for less than 2% of its US price, to ensure its accessibility for the local population. In the first year, the affordable and effective drug with a 95% cure helped treat over 70,000 patients and has so far improved the lives of a total of 250,000 patients in Pakistan.

The 12-week hepatitis C treatment in Pakistan now costs below Rs15,000 (US$54) which is the lowest in the world. Ferozsons ensured direct-to-home delivery so that the drug reached patients who needed it rather than being misused for financial gain.

Describing it as one of the achievements of the Pakistani health industry, Waheed said: “The impact of the Gilead partnership has been significant” as it transformed the treatment of hepatitis C. “From a very painful and not-so-effective treatment, we went to a guaranteed cure almost free from any side effects”.

Pakistan’s first biotech plant

Ferozsons is the pioneer in setting up Pakistan’s first biotech manufacturing facility in Lahore through a joint venture with Argentina’s Bagó Group in 2008. The plant was established in response to the high cost of importing biological drugs, such as treatments for kidney dialysis, cancer, and hepatitis C, more sustainably and at a lower cost. The joint venture led to direct investment in Pakistan and “increased manufacturing capability in an area where we had zero capacity.”

Biomanufacturing is the production of biological medicines from living organisms. The powerful biologic drugs such as for cancer treatment are different from small molecule drugs such as aspirin due to their highly complex production process. The Pakistani firm is also the distribution partner of Boston Scientific, a leading American producer of medical devices for treating heart disease and other therapeutic areas.

First Pakistani company to produce COVID-19 drug

In May 2020, during the peak of the COVID-19 pandemic, Ferozsons in Pakistan became one of five South Asian manufacturers authorised to produce and distribute the antiviral drug Remdesivir to treat COVID-19 in 127 countries. This was the first time a Pakistani manufacturer was selected for an international supply chain under technology transfer from Gilead.

They started supplying Remdesivir to Pakistan in June 2020 and began exporting globally in September 2020 to countries such as Ukraine, Indonesia, the Philippines, Costa Rica and African countries. This achievement was seen as an important step forward for Pakistan on both the health and economic fronts, improving access to coronavirus treatment for citizens and providing export opportunities.

Expansion and exports

While the pandemic severely impacted lives and economies globally, it also offered research and investment possibilities. Ferozsons invested in a large advanced, highly-automated manufacturing plant to expand its manufacturing capacity and be ready to “produce specialty therapeutics and vaccines” in the future. The plant, expected to be completed by mid-2023 “will produce specialty injections and treatments including insulins, as well as select vaccines for hepatitis B and possibly for COVID-19 and influenza later.” This plant will have the ability to produce the most sensitive drugs that were imported before. The raw materials will still need to be imported as Pakistan’s pharmaceutical industry lacks the necessary ingredients. Ferozsons currently exports to 24 countries in Eastern Europe, Africa, Asia, and South America.

Industry issues in Pakistan

While discussing ambitious plans, the CEO of Ferozsons Labs said that companies could only become exporters if they are sustainable at home, and lamented that Pakistan’s pharma industry has “never been financially viable due to the arbitrary price fixation mechanism imposed by the government” that is at odds with rising production costs. Despite its growth and reach, “the industry faces issues around irrational drug pricing, limited intellectual property rights protection, lack of timely regulatory approvals, and low investments for research and technological advancements,” according to Qazi Mansoor Dilawar, chairman of Pakistan Pharmaceutical Manufacturers’ Association (PPMA). One key challenge Osman Waheed cited was the Drug Regulatory Authority of Pakistan (DRAP) controlling both quality and prices with “the focus being on fixing prices rather than raising the bar for quality control.” The result is that Pakistan currently has no US Food and Drug Administration (FDA) or European Medicines Agency (EMA) approved labs, according to experts.

Role of pharma in economy

On the contribution of healthcare to the world economy, Waheed mentioned the growth of healthcare in India and Bangladesh. He recalls that Pakistan was the first in the region in 1992 to deregulate the pharma sector but reversed the mechanism within three months. India now exports pharmaceutical products worth $24 billion whereas Pakistan only earns under $300 million from pharma exports. Bangladesh is also an emerging giant in pharma with multiple FDA-approved facilities.

Waheed suggests moving away from price fixation to deregulation and oversight by an independent board to improve competitiveness in the industry. Price fixing in Pakistan is not only hurting the industry but the patients as well, resulting in repeated shortages and the rise of smuggled and counterfeit drugs that fill the vacuum created in the absence of life-saving medicines. At the moment, the health sector is besieged by shortages of multiple drugs needed to treat cancer, diabetes, tuberculosis and heart disease because of financial losses to the industry and import restrictions amid the economic crisis. The foreign currency shortage has disrupted the supply chain for both domestic production and exports.

Industry experts say revisions of laws and policies are critical for this sector to survive. “Pharma industry is facing an existential threat and is headed towards a shutdown if the government does not take quick action” Waheed warned. Drug pricing has always been treated as a political issue in Pakistan. “An industry that gets zero subsidies, no support from the government, is hostage to prices fixed by the government. It is completely irrational and creates a situation where everybody loses - the patient, who is exposed to smuggled and counterfeit medicine; the government, which directly bears the blame for shortages and the rise of counterfeit drugs; and the industry, which is being driven to bankruptcy because of this failure of governance,” says Waheed.

But there is still time and hope. This same industry, given the space, can be a reliable partner for meeting the country’s public health challenges and also be a meaningful contributor to diversifying the country’s export base.