RESEARCH PROPOSAL

LOCAL MANUFACTURING OF PHARMACEUTICAL DRUGS AS OPPOSED TO IMORT

Mahasin Kazi 07U0063 BBA IV (F)

Abstract Pakistan, a country stricken with poverty; where nearly one third of the population lives below the poverty line, relies heavily on foreign manufacturers as a source for pharmaceutical drugs. Out of all the drugs that find their way into the country from across borders, nearly a third of them are those that have been procured through illegal means (smuggling) from countries such as India and China, owing to the considerably lower manufacturing costs. The remainder are being imported, legally, through countries such as France, Spain, Thailand, U.S.A; England etc. This study would aim to look into the prospect of local manufacturing using local resources and not imported raw materials, thereby providing a nationwide access to medication of acceptable standards at much lower costs and in doing so providing employment to the people and a boost to the nations economy.

Statement of the Problem There are presently 55,000 drugs registered with the Ministry of Health; 10,000 of these are imported directly from various countries. There are some that are manufactured locally, but a majority of these are those which are being manufactured with imported raw materials. This has resulted in the skyrocketing of prices of these drugs. On the other hand many of the same drugs have surfaced in parts of the North West Frontier, especially the tribal areas. Most of these drugs are manufactured in India where they are made using locally available raw materials; this reduces the price of these drugs by as much as 50%. With the Drug Registration Board registering up to 8 drugs every working day, it has been concluded that almost all these drugs are safe and meet the standard. According to a research published by Consumers International Regional Office for Asia-Pacific, the prices of 17 out of 21 of the most commonly consumed drugs are higher in Pakistan than in India, Nepal and Bangladesh. There are many reasons for these high prices other than the imported raw materials used in manufacturing, economic factors such as the devalued currency and the energy crisis.

Variables The variable that this study intends on monitoring is profitability in manufacturing the drugs locally. There are various factors that affect the feasibility of local manufacturing; these include things such as Availability of raw materials Government support Infrastructural support

The first area to focus on is the availability of raw materials for manufacturing drugs locally, this would go a long way in reducing the prices and increasing profitability by eliminating the factor of import duties which the manufacturers bear, and is ultimately transferred to the consumer. The second factor is the support of the government. The government has recently allowed the registration of a number of foreign drugs, around 10,000; this would cripple the pharmaceutical industry by depriving them of the opportunity of capitalizing on this opportunity and manufacturing the drugs locally. In addition to this, the provision of subsidies also plays a vital role in the feasibility of local manufacturing. Lastly, infrastructural support is one of the most important variables. The energy crisis that has engulfed Pakistan has seen the downfall of many profitable industries, including pharmaceuticals. Also, the technology that is available to the local manufacturers also comes into consideration; whether they have the required plants, expertise in terms of human resources etc. Therefore for the purposes of research; Dependent Variable: Feasibility of local pharmaceutical manufacturing Independent Variables: o Availability of raw materials o Government Support o Infrastructural Support

The data collection would be done through interviews and market research. Given the fact that no extensive research has been conducted into the matter; the lack of research papers published the primary method of research would we interviews with the procurement departments of pharmaceuticals. Also market research would be conducted in order to gather information on local vendors for procurement of raw materials. For the sake of simplicity and feasibility of the research the sample would be two different pharmaceutical manufacturers that are currently working in collaboration with other MNCs and importing certain drugs. A comparison will then be conducted into the prospect of local manufacturing versus importing. There are a vast number of drugs are being imported by over 25 companies operating in Pakistan. The great a number tends to limit the sample size and to some extent may not be able to fully penetrate the scope of the study. However, the data collected should be substantial to analyze the profitability of local manufacturing.