After approval of federal cabinet, the Drug Regulatory Authority of Pakistan (DRAP) has notified the Promotion and Growth of Active Pharmaceutical Ingredient (API) industry in Pakistan Policy in order to give boost growth of pharmaceutical industry as well as to make this industry a par with the industries in India, China and Bangladesh.
The DRAP said in the notification, a copy of which is available with Daily Times, that advanced and efficient technologies are needed for API production to gain a competitive edge.
Current registered pharmaceutical firms are unable to produce enough quantity of API as they are producing only 15 percent of API locally, the document said, while rest 85 percent was being imported
The global market of API is over 180 billion US dollars and keeping in view of potential and to attain self reliance (of Pakistan) it was desirable to invest in this sector while the new policy would encourage such investment.
There are numerous raw materials in form of chemicals, starting materials and intermediates that are required for API manufacturing, the policy said adding that due to its lucrative nature many countries including China, India and Bangladesh are investing in promotion and growth of their API industry.
Moreover, a majority of precursors, organic chemicals and other chemicals used in the basic and semi-basic manufacturing of APIs are required to be imported.
It was stated that decisions on which technologies to invest in and which products to make with these technologies needed careful consideration and should take into account the availability of suitable human resources.
Other aspects include transfer of knowhow, capital investment, time required to start production, approval process and real market opportunities, said in the approved policy. As per available information, initially the policy board of DRAP constituted a committee to come up with final recommendations in this regard. The Committee also has been tasked to take in consideration along with justification and comparison with the incentives given by the Chinese and Indian governments to ensure a level playing field for Pakistan’s API industry and enable it to compete in the domestic and global markets.
The committee finally gave some sort of recommendations and in light of which the DRAP policy board, in its 38th meeting held June last year, approved the policy for submission to the federal cabinet as to get its nod.
The short-term incentives made part of the policy included tax holidays for all API manufacturers, zero percent customs duty, imposition of regulatory duty and tariff protection against import of materials manufactured in Pakistan and financial incentives like soft loans and keeping 20 percent export earnings.
For the long term, the establishment of API mega parks was proposed in the policy.
The Federal Board of Revenue (FBR) and Ministry of Commerce were consulted and the proposed amendments were incorporated into the draft API policy.
Though the policy draft had been placed before the federal cabinet in November, 2021, it was withdrawn for further consultation. Later, the Finance Division was consulted and its views and comments were included in the final version of the API policy. The availability, affordability and production of APIs in the country was recommended in the new policy.