PAKISTAN- AN INTRODUCTION

Pakistan is strategically located in South Asia connected to Central Asian

republics through Afghanistan, China via Korakoram highway and South East Asian
countries through sea. It is spread over a landmass of 796,095 square kilometers. It is a
land of opportunities for investment due to well-developed infrastructure, skilled
manpower and open Government policy.

1. PHARMACEUTICAL SECTOR IN PAKISTAN

Pakistan meets 80% of its domestic demand of medicines from local

production and 20% through imports. The pharmaceuticals market size is Rs. 70
Billion (US $ 1.2 Billion), approximately. The market for pharmaceuticals in Pakistan
has been expanding at a rate of around 10 to15% since last few years.

Pakistan is also exporting its surplus drugs to a large number of countries

particularly to the Asian and African regions with an expanding trade in the newly
emerged Central Asian States. About a hundred million strong population of the Central
Asian States, with almost no local manufacture of medicines, offers an attractive market
for industries located in Pakistan.

Pakistan's large population of more than 140 million people, expanding

economy including health services, individual rise in purchasing power, general
awareness regarding use of new molecules of drugs, etc. provides an ideal environment
for investment in this field.

Presently the pharmaceutical industry in Pakistan is producing all the major

pharmaceutical dosage forms. Similarly, there are some special products e.g.
immunologicals, anti-cancer drugs, certain anti-diabetics, antidotes and products
manufactured from biotechnology, which are still being imported, in the finished form.
These specific areas provide excellent opportunities for investment. Only few bulk
pharmaceutical raw materials are being manufactured locally and most of the
pharmaceutical raw materials are being imported in large quantities from different
countries of the world. This sector also gives challenge to explore and avail the
opportunities.

The Drugs Act, 1976, regulates the pharmaceutical sector in Pakistan.

2. THE DRUGS ACT 1976 (SALIENT FEATURES)

· An Act to regulate the import, export, manufacture, storage, distribution and

sale of drugs.

· It extends to the whole of Pakistan and Federally Administered Tribal Areas

(including Export Processing Zones).

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Ø The State of Azad Jammu and Kashmir has also adopted this Act and the
jurisdiction of the Central Licensing and Registration Boards constituted under
this Act is extended to the territory of A J & K.

Ø Drugs Act, 1976 is a Federal legislation with distribution of functions between

the Federal Government and Provincial Governments as follows:-
Federal Government Provincial Government
Manufacture Sale
Registrations
Pricing
Import
Export
For the purpose of this Act a drug is defined in section 3 (g) and includes
allopathic drugs, surgical ligature, sutures, bandages, absorbent cotton,
disinfectants, adhesive plasters, etc.
Under this Act, the Federal Government has laid down the following rules to
carry out various functions entrusted to it under this Act:-

Ø The Drugs (Licensing, Registering and Advertising) Rules 1976. - Provide

the rules, procedures and conditions for grant of Drug Manufacturing
Licenses, registration of drugs, promotion to the professionals and
advertisement of drugs to the general public.

Ø The Drugs (Labelling and Packing) Rules, 1986. - Prescribe the manners in
which a registered drug shall be labeled.

Ø The Drugs (Import and Export) Rules, 1976. - Provide procedures to import
the finished drugs and the raw materials. The pharmaceutical raw materials can
be imported by the holders of valid Drug Manufacturing Licenses and the
registration of the respective drug.

Ø The Drugs (Appellate Board) Rules 1976. - Provide procedures for making
appeals before the Appellate Board against the decisions of the Central
Licensing and Registration Boards, as the case may be.

Ø The Drugs (Research) Rules, 1978. - Every lincesee is required to pay 1% of

his gross profit towards a Central Research Fund, administered by the Federal
Government.

Ø The Drugs (Specifications) Rules, 1978. - Provide order of specifications

which shall be applied to a registered drug.

Ø The Drugs (Federal Inspectors, Federal Drug Laboratory and Federal

Government Analysts) Rules, 1976. - Specify duties of Federal Drug
Inspectors and the procedures of the Government Analyst.
Detailed information may be had from the following website:-
<http:// www. dcomoh.gov. pk>

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3. DRUGS CONTROL ORGANIZATION

The Drugs Control Organization is a wing in the Ministry of Health. It executes

its work under the Drugs Act, 1976 and rules made there under. Drugs Controller is the
technical head of this Organization and the Director General is the departmental head.

The Drugs Control Organization also has its field offices in the Provincial
Headquarters. All the imports of pharmaceuticals are conducted through these offices.
They also monitor the compliance to conditions of Drug Manufacturing Licenses,
including Good Manufacturing Practices.

The Provincial Governments have their own Inspectorates for post-marketing

surveillance. The Provincial Quality Control Boards have jurisdictions in Quality
Control cases in the respective provinces.

4. MANUFACTURING OF DRUGS

Under the Drugs Act, 1976 four types of Drugs Manufacturing Licenses are
issued depending upon the nature of activity of pharmaceutical manufacture as under: -

a) Formulation
b) Basic Manufacture
c) Semi Basic Manufacture
d) Repacking

As such a pharmaceutical unit (facility) can possess more than one license
depending upon the nature of activities being undertaken.

The number of pharmaceutical units set up in different provinces of Pakistan

are as under:-

A list of licensed manufacturers is available at the website <http://www.dcomoh.gov.pk>

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 To establish a pharmaceutical unit in Pakistan all permissions relating to
investment, transfer of dividends and profits and appointment of foreign staff, which
were previously required have been dispensed with. There is no government
requirement for joint venture projects. Now the only requirement is to obtain a Drug
Manufacturing License under the Drugs Act, 1976 with a view to ensuring production of
drugs of standard quality, by complying with notified current Good Manufacturing
Practices. Once the conditions laid under the rules have been met, a Drug
Manufacturing License is granted without delay.

A Central Licensing Board, comprising 21 members including; the

representatives of the Federal and Provincial Governments and the experts in medical
and pharmaceutical fields, grants the Drug Manufacturing License

The out line of the procedure, for a license by way of formulation is as under:-

1. When a proposal is made for establishment of the a pharmaceutical unit, the

following documents are requested: -

a. A copy of the National Identity Card of the applicant.

b. Deed / lease document of the land / plot, for its proper identification.

c. Information about the company/firm, its directors or partners.

d. Sketch of the proposed site.

2. Verification of the site. The proposed site should not be located in a place
adjacent to an open sewerage, drain, public lavatory or any factory, which
produces a disagreeable, or obnoxious odor or fumes or large quantities of
soot, dust or smoke. For a license, by way of formulation a minimum plot size
of not less than 2000 square yards is required. Once the requisite information is
complete, the site verification takes about 3-4 weeks.

3. Approval of the layout plan. The applicant is required to furnish a layout plan
giving details of the flow of operations, and drawn in line with the current
Good Manufacturing Practices. The guidelines to this affect are given in
Schedule B-1. Once the layout plan is found in order, it takes about 3-4 weeks
for its approval.

4. As soon as the facilities are complete a formal application for grant of a Drug
Manufacturing License is made on a prescribed Form-I, alongwith the
requisite fee, for evaluation of the production and quality control facilities.

5. A panel of experts of the Central Licensing Board inspects the facilities to

evaluate, if they comply with the requirements for grant of a license, as
provided in the rules, and makes a report to the Board.

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6. The Board, which meets every 6-8 weeks, passes its orders on the report and
recommendations of the panel of inspectors.

7. A license is issued for a period of five years at a time, after which it is

renewable on an application. Once an application for renewal has been made
in time, the license continues to be in force till the decision on the application.

8. A license may be suspended or cancelled or renewal denied if the licensee fails

to comply with the conditions of license.

The procedural requirements for other types of Drug Manufacturing Licenses

are similar as that of the Formulation, with some variations of conditions depending
upon the type of the license.

THE DRUG MANUFACTURING LICENSE FEE SCHEDULE 'F'

Ø Site verification Rs. 1000/-

Ø Approval of the Rs. 1000/ -

layout plan per section
Ø Revision/expansion Rs. 500/ -
of lay out plan per section

Grant of License

Ø Basic Rs.10,000/-
Ø Semi basic Rs.10,000/-
Ø Formulation Rs.35,000/-
Ø Repacking Rs.20,000/-

Renewal of License - If the application for renewal is made before the expiry of the
period of validity of license.

Ø Basic Rs.5,000/-
Ø Semi basic Rs.5,000/-
Ø Formulation Rs.17,500/-
Ø Repacking Rs.10,000/-

5. REGISTRATION OF DRUGS

Registration of a drug is granted by the Registration Board, set up by the

Federal Government under the Drugs Act, 1976. This Board, which comprises 21
experts in the field, before registering a drug, satisfies itself of its safety, efficacy,
quality and economy. The Board also takes into consideration the public interest. In
addition, in respect of registration of a drug for local manufacture, it is ascertained that
the manufacturer possesses matching facilities.

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1) An application for registration of a drug to be manufactured locally is made in a
prescribed Form-5 under the Drugs (Licensing, Registering and Advertising)
Rules, 1976. An application for registration of a drug to be imported is made in
a prescribed Form-5 (A) under the said rules.

2) The respective offices evaluate the application. It takes 3-6 months to process
the applications for branded generic drugs and 6-12 months in respect of new
molecules.

3) Once the application is complete and has been evaluated it is placed before the
Registration Board for its orders.

4) For every potency/strength of a drug a separate application is required.

5) A registration is issued for a period of five years at a time, after which it is

renewable on an application. Once an application for renewal has been made in
time, the registration continues to be in force till the decision on the
application.

6) A registration may be suspended or cancelled or renewal denied if the holder of

the registration fails to comply with the conditions of registration.

The Federal Government has set up Expert Committees including a committee

on Biologicals and a committee on Veterinary Drugs for furnishing opinion
after drug's evaluation. The Registration Board also considers these opinions.

THE REGISTRATION FEE SCHEDULE IS AS UNDER:-

For grant of Registration

Type of Drug Fee

New Drug Molecule Rs.15,000/-

Any other drug for import Rs. 15,000/-

Any other drug for local Rs. 8,000/-

manufacture including Glenicals

For renewal of Registration

(i) If the application for renewal is made before the expiry of the validity of a
certificate:

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Type of Drug Fee
Drug for import Rs. 7,500/-

Drug for local manufacture Rs. 4,000/-

including galenicals

(ii) If the application for renewal is made within sixty days after the
expiry of the validity of a certificate:

Type of Drug Fee

Drug for import Rs. 15,000/-

Drug for local manufacture Rs. 8,000/-

including galenicals

· Variance to registration Rs. 1000/-

application i.e. change in inactive
raw materials, method of manufacture,
testing method / quality specification,
product specification, packing materials
including change of labeling specification, etc.

6. SALIENT FEATURES OF POLICY OF ALLOCATION OF CONTROL

SUBSTANCES.

Pakistan being signatory to UN Conventions on Narcotic drugs, Psychotropic

substances and against illicit traffic in Narcotic drugs and psychotropic substances,
regulates the import, export, manufacture, etc. etc. of controlled substances. The annual
quota of such substances for import by a pharmaceutical manufacturer having a valid
Drug Manufacturing License and registration of such drugs is fixed and consumption of
these materials are monitored by authorized officer of the Health Ministry. For
substances having strong misuse potential, consumption of previous imports is certified
by the officer of the Ministry before allowing fresh import.

7. THE DRUGS APPELLATE BOARD

Any person aggrieved of any decision of the Central Licensing Board or the
Registration Board may prefer an appeal to an Appellate Board constituted for that
purpose. The Secretary Health presides over this Board.

8. QUALITY CONTROL

The manufacturing of quality drugs is primarily the responsibility of the

manufacturer and for that matter every pharmaceutical unit establishes its own
quality control laboratory. The Government regularly monitors the quality of drugs
manufactured and marketed. Inspectors of Drugs at the Federal as well as Provincial

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level conduct post-marketing surveillance. For that purpose Drug Testing laboratories
are established at the Federal as well as Provincial levels. The Central
Licensing/Registration Boards or the Provincial Quality Control Board, as the case may
be, for taking further action evaluate reports of the Government Analysts. In case a drug
fails to comply with standards and/or conditions of registration it may result in the
cancellation or suspension of a Drug Manufacturing License or registration or legal
proceedings in a Drug Court.

9. DRUG PRICING

The system of pricing of medicines has been liberalized. All drugs have been
divided into two categories controlled and decontrolled drugs. About 800 drugs that
have been considered essential for this purpose have been placed on the controlled list.
For these a transparent system of price revision has been developed allowing periodic
across-the-board price increases on account of the general rate of inflation and changes
in the exchange rate of the rupee, etc. In case of decontrolled category, a more liberal
system is in operation through which higher price increases are allowed at regular
intervals compared to the controlled category of drugs.

10. RESEARCH AND DEVELOPMENT

Every licensee is suppose to contribute 1% of his gross profit, before

deduction of income tax, towards a Central Research Fund maintained by the Federal
Government.

Research and Development section executes its work under the Drugs
(Research) Rules, 1978. It collects Central Research Fund and convenes the meetings of
Expert Committee for fund allocation to individuals and/ or Institutions, which are
engaged in research in the field of pharmacy and medicine. The applicant desirous of
getting fund allocated applies on FormA or Form B, as the case may be. The Committee
evaluates the projects and makes recommendations for funds allocation to the
Government.

11. BULK RAW MATERIAL MANUFACTURE

The pharmaceutical industry in Pakistan is presently importing a large number

of pharmaceutical raw materials with a cost, which is increasing rapidly. The
government's determination towards achieving self-sufficiency backed by a liberal
policy is encouraging expansion of industrialization towards basic manufacture of
pharmaceutical raw materials.

Presently the following raw materials are being manufactured locally, for
commercial sale.

· Penicillin and its derivatives for oral dosage forms; like Ampicillin Trihydrate,
Amoxycillin Trihydrate, Ampicillin Anhydrous.
· Cephalosporins like Cephradine and Cephalexin, etc., both oral and sterile.

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· Analgesics like Aspirin, Paracetamol and Ibuprofen.

· Quinolones like Norfloxacin and Ciprofloxacin.

· Steroids like Betamethasone, Dexamethasone and their salts.

· Other products like Pyrazinamide, Ephedrine HCl, Pseudo-ephedrine HCL,

Furazolidone, Hyoscine, Rifampicin and Sulphamethoxazole

This sector is wide open with tremendous opportunities for investment.

12. INCENTIVES

FORMULATION:

Ü For Formulation of dosage forms the pharmaceutical raw materials, both the
active and the inactive are exempted from custom duty in excess of 10% ad
valorem and sales tax. In many cases the statutory rate of duty is only 5%.
(SRO 372 (I)/ 2002 dated 15.6. 2002)

Ü The packing materials also enjoys this benefit however, sales tax is levy-able
on the packing material.

BULK RAW MATERIAL MANUFACTURE

Ü The machinery and equipment, not manufactured locally, is importable at 5%

customs duty.

Ü For bulk manufacturing of pharmaceutical raw materials, the chemical raw

material are exempted from custom duty in excess of 5% ad valorem and sales
tax.
(SRO 372 (I)/ 2002 dated 15.6. 2002)

Ü Once a local manufacturer of bulk pharmaceutical raw material is capable of

meeting the required standards of quality and the domestic requirement, he
may be granted a tariff protection on the recommendations of the National
Tariff Commission.
< www. ntc.gov. pk>

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-I

Drugs Controller-II

Dr.

Mr. Faqeer
Muhammad Sheikh

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14. ORGANIZATIONS OF TRADE AND INDUSTRY

Pakistan Pharmaceutical Manufacturers Association

Head Office: 130-131 Hotel Metropol, Club Road, KARACHI

Phone: 92-21-5211773
Fax: 92-21-5675608

Pharma Bureau
(A group of multinationals operating in Pakistan)
Head Office: Rooms 16 & 17, (Ground Floor), Plot 23, Sector 22, Korangi
Industrial Area, KARACHI

Phone: 92-21-5060221-35
Fax: 92-21-5060360
E.mail: [email protected]

Pakistan Chemists and Druggists Association

Head Office: 18-Shaikh Chambers, M.A. Jinnah Road, Near Light House Cinema,
KARACHI

Phone: 92-21-2435606, 2438091

Fax: 92-21-2443784

PAKISTAN ZINDABAD

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 Contents

Page

PHARMACEUTICAL SECTOR IN PAKISTAN 1

THE DRUGS ACT 1976 (SALIENT FEATURES) 1

DRUGS CONTROL ORGANIZATION 3

MANUFACTURING OF DRUGS 3

REGISTRATION OF DRUGS 5

SALIENT FEATURES OF POLICY OF ALLOCATION 7

OF CONTROL SUBSTANCES

THE DRUGS APPELLATE BOARD 7

QUALITY CONTROL 7

DRUG PRICING 8

RESEARCH AND DEVELOPMENT 8

BULK RAW MATERIAL MANUFACTURE 8

INCENTIVES 9

DRUGS CONTROL ORGANIZATION-CONTACTS 10

ORGANIZATIONS OF TRADE AND INDUSTRY 13

*The encircled area indicates the area of concentration of Pharma industry.