Nepali Pharma Industry Present & Future

Nepali Pharma Industry Present & Future
By Diwakar Chhetri

Since Nepal has been categorized as one of the least-developed countries, the Doha Declaration of WTO has made it free from Patents Rights laws till December 31, 2015. In other words, Patents Right law in Nepal will be implemented only from, January 1, 2016 onwards.

Currently, there are 50 least-developed countries as listed by the UN in the world. Among them only 32 countries have become WTO members till now and 10 others are in the process of obtaining the WTO membership. Our neighbouring countries like Bangladesh, Bhutan as well as Myanmar, Maldives, Afghanistan and most of the African nations fall under the category of least-developed countries. Bangladesh is capitalizing its WTO membership with the fullest capacity so far as pharmaceutical products are concerned. Except Bangladesh and Nepal, almost all the least-developed countries solely depend on the imported allopathic medicines. Hardly seven years are left for the implementation of Patents Rights law in Nepal and till date we have failed to prepare ourselves to export medicines to these LDCs and have never given a thought about our stand after 2016.

What are the hindrances which are not allowing us to export? WTO’s ‘Managing the challenges of WTO participation: case study 31’ gives one example. As noted there Gorkha Ayurved Company received a bulk order for their product from a Swedish importer in August 2000. Later the importer cancelled the order mentioning that the Company was lacking GMP certificate and also failed to match the standard. In 2001, the Company exported their product to a Sydney based importer. This importer asked for some sample test of the product, which the Company easily presented. It is a point to note that different countries have their different rules and polices for the import and export of any products. But so far as Allopathic medicines are concerned, WHO-GMP certificate plays a major role.

The Department of Drug Authority (DDA) had made GMP mandatory for importing any of drug-related products into Nepal since 2000. The Department had also imposed the GMP on the domestic pharmaceutical manufacturing companies. As soon as the country obtained the WTO membership, DDA had instructed all the pharmaceutical manufacturers, including herbal medicine producers, to abide by the WHO-GMP code by the end 2006. Till date most of the leading companies have acquired WHO-GMP certificates and many more are going to obtain it. But the companies are still prevented from exporting their products. What could be the reasons that GMP certified companies are failing to export their products even to LDCs? Who is responsible? Or is the WHO-GMP certificate issued by DDA not matching the world standard and not acceptable to other countries?

If ten existing Nepali pharmaceutical companies join together and invest collectively for the establishment of a new factory, with a state-of-the-art of technology, matching with GMP and FDA standard, the export of medicines is absolutely feasible. Such a joint effort not only abolishes the dependency on import but also earns a good amount of revenue for the government. Above all, the country will get ready to accept the challenge, which is likely to emerge after 2015. Countries like Japan, USA, Germany and others have assured trade related technical support to Nepal. So, Nepal has an opportunity to reap the maximum benefits by enhancing her capacity to be more competitive in the international trade. It is now clear that by simply obtaining a WHO-GMP certificate will not serve the purpose; the factory set-up should match with the internationally accepted standard. Nobody can deny that our DDA has to play a crucial role for making our factories technically superior. At least, at present, Nepali manufacturers, with the coordination of DDA, should aim at covering LDCs’ market. For this, the manufacturers industries should be ready to uplift their present technical status.

SCENARIO OF DOMESTIC PHARMA MARKET

The numbers of manufacturing companies are increasing year after year. Still domestic production has failed to replace import. About 65 percent of medicines demand is being fulfilled by foreign industries. The table above clarifies the present scenario of consumption of allopathic medicines in Nepal.

Whenever a new company starts making drugs in Nepal, it tends to manufacture those molecules only which have already been manufactured and marketed by other companies. We envy national brand leaders and we always want to be in a comfortable zone by aping the brand leaders.

If we analyze further, we may find that the antibiotics have a market share of almost 30 percent of total medicines consumed. That is the biggest opportunity sector where our domestic industries should aim at.

The total consumption of antibiotics in 2005-06 was Rs. 2 billion 717 million and the share of the domestic production was only 48.7 percent.

The antibiotics mentioned in the accompanying table, which were imported, have a share of 31.43 percent in total antibiotics market; hence, the domestic industries should fill up such a huge vacant space by increasing their share.

This is the right time to eliminate foreign brands by increasing our domestic market share. But unless and until we become technically superior, we cannot get rid from the increasing import. Within 2015 we should be able to export our domestic products to the market of LDCs. From 2016 onwards the international brands start pouring into the Nepali market and the market becomes highly competitive. Nepali pharmaceutical industries will find it difficult to survive in future if they do not arm themselves now with internationally accepted sophisticated technology and manufacture the medicines of export quality.






























(Chhetri is the General Manager of Asian Pharmaceuticals (P) Ltd.)

Intervew: ‘Nepal’s pharmaceutical market is worth Rs 10b’

Intervew: ‘Nepal’s pharmaceutical market is worth Rs 10b’
eKantipur.com, 17-Feb-08

Umesh Lal Shrestha is managing director of Quest Pharmaceutical, one of the leading drug producing companies in Nepal. A science graduate, Shrestha has been involved in this sector for more than three decades. He is also the current president of the Association of Pharmaceutical Producers of Nepal (APPON). In an interview with the Post, Shrestha talked about the present status of the pharmaceutical sector and its prospects in Nepal. Excerpts:

Tell us about Quest's performance.

Quest is one of the leading pharmaceutical companies in the country. It is growing at an annual rate of 15 percent. Quest is also a pioneer producer of specialized products in Nepal like drugs used to treat heart disease, blood pressure and diabetes. The company was established seven years ago, and presently employs a staff of more than 150 persons. We believe in innovation and ethical marketing. Over the last seven years, our investment has doubled from Rs 50 million to Rs 100 million.

How is the sector expanding in Nepal?

There are 40 pharmaceutical companies in Nepal at present. Likewise, the size of the pharmaceutical market has crossed Rs 10 billion. This sector has made a huge leap forward over the period of the last two decades, but we still depend on imports to fulfill more than 60 percent of the total national drug requirement. Investments in the pharmaceutical industry have swelled to around Rs 5 billion. The overall market for pharmaceutical products is growing by around 13 percent annually. However, competition among the producers is very intense, and that has depressed the rate of return for the companies.

How does APPON assess the government's policies?

The government's Drug Act has become obsolete. It should be amended as per the changing situation in order to encourage Nepali pharmaceutical producers. The government should provide different incentives like tax exemptions and other rebates to indigenous producers. The government should learn from the success of Bangladesh, which has emerged as one of the leading exporters of pharmaceutical products by expanding its market to more than 92 countries. We can also reach international markets like Bangladesh has done, but developing this sector does not figure in our government's list of priorities. The government should establish a Special Economic Zone for the pharmaceutical sector and provide electricity and water at concessionary rates.

Can Nepal really export pharmaceutical products to the international market?

Yes, it can. Our labor cost is low, and the customs duty imposed on raw materials is less than in other countries. That places us in an advantageous position. There are 100 countries in the world that do not manufacture any medicinal drugs. That market represents a huge potential for our industry to tap. Of course, we need modern technology and skilled manpower to increase our competitiveness in the international market. But with the right mix of policy support and investment and technology, we can overcome this constraint. If we realign our focus and garner state priority, Nepal has ample scope to export medicines.

How sensitive are domestic producers about making medicines more accessible to poor people?

We are providing more than 20 medicines, which are used to treat common diseases, at nominal rates. Our efforts so far have remained insufficient because imported medicines are mostly sold at higher prices. Our efforts alone will not be sufficient if the government continues to turn a deaf ear to this issue. Government support is crucial to bring down the cost of production.

APPON organized the second Pharma Expo 2008 on Saturday and Sunday. How did the event go?

It was successful in terms of meeting the objectives, which was to inform entrepreneurs and the public about the latest technologies and products available in the international market. A total of 43 foreign and 32 local companies were active participants in the two-day fair. Products worth Rs 100 million were traded. More than 5,000 people visited the expo, which was far more than our initial estimate of 3,000 visitors.

What are your future plans?

As a leading pharmaceutical producer, we will continue to focus on innovation and come up with new products in the future. We have recently introduced Methyl Cobalimine, a vitamin which is a specialized product. We are penetrating South Asian markets and countries of the former Soviet Union as part of our plan to explore international markets. We are also developing skilled manpower through different training and specialized courses in and outside the country.

Three Pharma Companies Receive GMP

Three Pharma Companies Receive GMP
New Business Age, September 2007

Department of Drug Administration has awarded Good Manufacturing Practice (GMP) certificates to three pharmaceutical companies - Lomus Pharmaceuticals, Pharmaco Industries and Elder Universal Pharmaceuticals.

The department awards such certificates to those pharmaceutical companies that meet good manufacturing practice standards set by United Nation’s World Health Organization (WHO). The department started to award GMPs since 2004.

Meanwhile, four pharma companies have failed to renew their GMP certificates. They are Nepal Pharmaceuticals Lab of Parsa, Omnica Laboratories of Bhaktapur, Quest Pharmaceuticals of Bara and Vijay Deep Laboratories of Harisiddhi, Lalitpur.

Among the 40 pharma-ceutical companies of Nepal, there are only 11 companies which have received the GMPs.

Among the new recipients, Lomus has received the GMP for a period of two years whereas Pharmaco and Elder both have received it for one year.

According to Navin Shrestha, Chief of the Inspection of the Department, Lomus got the GMP for two years mainly because it has been utilizing the most modern technology available so far. Spread across 24000 sq. ft. of area, Lomus factory at Gothatar of Bhaktapur has been producing 250 registered brands of medicine in the forms of tablets, capsules, syrup, gel, dental medicines and different kinds of hormones. Lomus Pharmaceutical has already received ISO 9001 and 14001.

Pharmaco factory is located at Dhalko of Kathmandu whereas Elder Universal has its factory located in Bhairahwa.

Simca Laboratories, with its factory located at Balkumari Thimi of Bhaktapur, was denied the GMP by the Department.

The government has decided to procure medicines for government-run health services only from the GMP certified manufacturers. However, this decision is not yet implemented.

According to one estimate, the Nepali market consumes medicines worth Rs. 9 billion in which the share of the domestic manufacturers is only around 35 percent.