Pharmaceutical industry in South Asian Countries

Are South Asian countries ready for a big jump in the pharmaceutical industry? Especially, with COVID-19 cases all over the globe, which started from last year, countries in the South Asia region have come under the global radar. Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka are the countries in the South Asia region. Pharmaceutical resources associated in this region ramped up their production of materials to combat the pandemic, despite having major challenges in a few countries.

For the pharmaceutical industry, a lot of opportunities are coming up in the form of growing healthcare expenditures as well as new challenges and complexities. In recent years, South Asian economies showed strong GDP growth; however, in 2019 it ended up being lower than expected. The risk profile for most South Asian countries is assessed to be low, as they are commodity importing and their growth is predicted to be driven by domestic demand. Risk primarily remains dependent on domestic factors and can be alleviated at the individual level appropriately. Let’s take a holistic view of each of these countries in South Asia to get a reality check of their impact on domestic as well as global pharmaceutical industry.

Afghanistan
Due to pressing security risks and political tensions, it has one of the lowest growth rates of all South Asian countries, at less than 3%. In 2017, the Ministry of Public Health (MoPH) had launched a 12-week campaign against counterfeit and substandard medicine. The licenses of more than 900 local and foreign pharmaceutical importing companies were suspended, while 100 tons of counterfeit, expired and low-quality medicines were seized from pharmacies.

Bangladesh
Due to the pandemic, when most of the industries in Bangladesh witnessed a drastic fall in profits in the last year, the pharmaceuticals industry was an exception. It achieved around 15% growth, which was a significant boost to their economy. In recent times, local pharmaceutical companies have emerged as a game-changer by contributing approximately 90% of the overall available medicines in the market. Rise in life expectancy, population growth, lifestyle changes, growing per capita income and changing disease profile are some of the important factors that are boosting consumption in the local market.
Bangladesh is currently exporting medicines to 145 countries, including a few highly regulated markets such as the European Union and Australia.

Bhutan
The Government of Bhutan has been among the most dynamic in South Asia in terms of introducing reforms and simplifying the procedures necessary for business establishment. Bolstered by increased foreign investments due to relaxed FDI regulations in 2015, the pharmaceutical sector is set to mushroom over the region.

India
The well-formulated “Make In India” campaign has started supporting local manufacturers and attracted multinational corporations and even nations to set up manufacturing facilities in India across different industry and services sectors. Being the largest provider of generic drugs globally, the Indian pharmaceutical sector supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK. By 2025, the Indian pharmaceutical sector is expected to grow to US$ 100 billion.

The Government of India has taken several steps to decrease costs and bring down healthcare expenses. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also predicts well for the pharmaceutical companies. With the packages and policies rolled out by the government and to leverage the talent pool available in the country, India will be growing exponentially in this sector by catering domestic as well as international demand to be in a commanding and leadership position.

Maldives
Due to ongoing economic weakness, restrictions in healthcare funds have been evident, and that has affected pharmaceutical market growth. The market has been on a low growth trajectory. With government’s commitment to improve health services in the country, pharmaceutical imports will be increased.

Nepal
The role of the pharmaceutical industry is invaluable for an economic revolution of the country. The pharmaceutical market is less regulated in Nepal. The Department of Drug Administration (DDA) has a crunch in resources and tools to monitor the quality of drugs. For the last 7 to 8 years, the market share of Nepali medicines has been limited to 40 to 45%. Local manufacturers are expanding their hold in the market; however, the hold of foreign drug companies seems to be strong. Creating a transparent environment as well as addressing the needs of the pharmaceutical sector will help local manufacturers to expand their hold in the country.

Pakistan
Although it’s considerable longer-term potential based on the large and growing population and the strong potential for healthcare infrastructure and services growth, Pakistan is not a priority target for multinational pharmaceutical companies. It has a low R&D expenditure of about 1% of sales. Presence of counterfeits and the blurred prescription and OTC medicine distinction along with negative price pressures are the main hurdles for the growth of the pharmaceutical industry in the country. To add further, increased costs of manpower and energy along with high cost of raw materials import worsen their situation.

Sri Lanka
Sri Lanka's healthcare spending will witness strong growth over the next ten years, with double-digit expansion forecast through to 2029, supported by the country's commitment to expand its domestic pharmaceutical industry and continue improving its existing universal healthcare offering. A report from Fitch Solutions has predicted that the pharmaceutical market in Sri Lanka will reach a value of $625 million, which would involve a five-year compound annual growth rate (CAGR) of 1.6% by 2024. The report also forecasted the market to reach $710 million by 2029, observing a 10-year CAGR of 2.2%.

The future
No doubt, India is leading the race in South Asia among all the countries and can lead from the front to bring South Asia countries in the global spotlight as a powerhouse for the pharmaceutical industry. These countries in the South Asia region have limited business integration with each other for various political and historical reasons. It has all the ingredients to be the next bright spot in the global economy. The potential can be unlocked if the countries give up their historical and geopolitical differences and present a collective front to emerge as an integrated economic powerhouse. There are major economic prospects that could be unleashed with deeper economic amalgamation. It is a real, significant, useful and required lens to address some of the most critical problems of billions of South Asians.