Pakistan’s pharmaceutical industry achieved sales of Rs916 billion (USD 3.3 billion) in the fiscal year 2024 (FY24), which represents a 22% year-on-year (YoY) increase in Pakistani Rupee (PKR) terms and a 7% YoY rise in US dollar (USD) terms.

This growth is higher than the last 5-year (FY20-FY24) Compound Annual Growth Rate (CAGR) of 17%.

During the fourth quarter of FY24, the country’s pharmaceutical sector recorded its highest-ever quarterly sales of Rs237 billion (USD 860 million), which is a 25% increase compared to the same period in the previous year.

Out of the 25% YoY jump in pharmaceutical sales, 20% is attributed to a price increase, while the remaining 5% is due to an increase in sales volumes.

The Pakistani pharmaceutical industry is a mix of local and multinational companies, with domestic firms holding a substantial market share. Some notable local players include Getz Pharma, The Searle Company, and Ferozsons Laboratories, while multinational giants like GlaxoSmithKline (GSK) and Abbott Laboratories also play a crucial role.

The report highlighted that the significant price hikes seen in the industry were largely driven by the government’s approval of deregulating drug prices for non-essential categories, as well as a one-time price increase for 146 drugs in February 2024.

To provide more context, the government had approved the deregulation of non-essential drug prices on February 6, 2024. However, this decision was subsequently stayed by the Lahore Court, which sought clarification from the Federal Government.

Later, on April 2, 2024, the Lahore High Court ruled in favor of the pharmaceutical industry, thereby vacating the stay order and allowing the deregulation of Maximum Retail Prices (MRPs) of drugs.

The report reiterated its previous stance, stating that the deregulation of the pharmaceutical sector will enable companies to efficiently pass on their costs to consumers and subsequently return to their historic gross margins, which are currently at a decade-low of 26%.

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