• Pharma, surgical industries promise vast exports

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    PAKISTAN’S and the Philippines’ bilateral trade on surgical and medical exports have so much room for growth, as Philippine hospitals are a potential big market for these Pakistani products.

    During the 2015 – 2016 fiscal year, pharmaceutical products made Pakistan as the world’s 19th-biggest exporter of such, with a turnover of around $205 million while surgical equipment was ranked as its 13th-biggest export, with a turnover of around $359 million. In the Pakistani-Philippine bilateral trade for the same fiscal year, pharma products worth $14.1 million were Pakistan’s 2nd-largest commodity while medical and surgical instruments worth $3.2 million were its 7th-largest commodity exported to the Philippines.

    Comprising of about 800 manufacturing units, including those operated by 25 multinationals present in the country, Pakistan’s pharma industry is vibrant, forward-looking, and knowledge-based. The market shares are almost evenly divided between national companies and the multinationals. The industry meets around 95 percent of the country’s demand of medicines. It has shown also a progressive growth over the years, particularly over the last decade. The industry has invested substantially to upgrade itself and, today, the majority of units are following the GMP or good-manufacturing practices, in accordance with the domestic as well as international standards.

    Currently, the pharma industry has the capacity to manufacture a variety of products ranging from simple pills to sophisticated biotech, oncology, and value-added generic compounds. The Pakistan Pharmaceutical Manufacturers Association (PPMA) has adopted “Vision 2025” for the industry under which it envisions to increase the exports of medicines to $5 billion over 10 years.

    The Philippines is an important export market for Pakistani pharma products. Numerous Pakistani pharmaceutical firms have established their offices in the Philippines while many companies have applied for registration of their drugs with the Philippines’ Drug Regulatory Authority. The future prospects seem promising. General impression in the Philippines is that Pakistani medicines are competitive, price-wise, and are of good quality.

    The surgical instruments industry of Pakistan, meanwhile, started in the early-1940s in the city of Sialkot. It consists of over 3,600 small-, medium- and large-sized manufacturing units employing over 150,000 workers. Benefiting from the latest technology and skilled craftsmanship, the industry manufactures a large variety of instruments that include dental and medical instruments, beauty instruments including manicure and pedicure equipment, veterinary instruments, disposable or single-use surgical instruments for anesthesia, diagnostic, vaccination, bone surgery and plaster, and reusable surgical instruments.

    The bulk of surgical-instruments export from Pakistan—70 percent—is destined for the US, which imports about 49 million units. Europe is the second-major market for Pakistani surgical instruments, eating up 28 percent of the total exports. Within the European region, Germany accounts for 50 percent of the total exports, followed by the UK with 6 percent, and Italy and France with a 4-percent share each. The rest of the volume are exported to other countries, such as the United Arab Emirates, Japan, Brazil, Mexico, the Philippines, and Russia. Pakistan’s annual exports of surgical instruments amount to $339 million.

    Manufacturers of surgical instruments manufacturers in Pakistan have less marketing presence or infrastructure to allow direct sales or trade with the users in countries of destination. Since the buyers who import surgical instruments from Pakistan are traders, wholesalers, or international distributors, the brand involvement is low. Pakistani manufacturers sell to the retailers or small suppliers in the developed countries on small-profit margins. These foreign traders or middlemen then sell the same instruments, after hiding them behind internationally-renowned brand names, to foreign hospitals at exorbitant prices, earning enormous profits.

    Pakistan already exports a substantial amount of surgical and medical equipment to the Philippines. However, there exists a good potential for further growth, as demand in this sector is substantial. Hence, bilateral trade in this sector has every promise to flourish exponentially.

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