KARACHI: After the departure of three to four multinational corporations (MNCs) from Pakistan and market reports that three more consider calling it a day, local drugmakers have raised production besides expanding warehousing facility and biotechnology.

Some seven local pharmaceuticals have already inititated projects costing Rs3 billion to Rs5bn in the last two to three years.

However, some are still studying options for relocating and expanding their production facilities in other countries like Malaysia and Switzerland.

In contrast, MNCs’ investment — including upgradation, expansion and setting up of some new plants — fell to Rs4bn from 2010 till end of 2013, from Rs14bn during 2007-2010. Many of them have lowered their production besides requesting discontinuation of drugs from the Drug Regulatory Authority of Pakistan (DRAP). Some MNCs, after shutting their operations in Pakistan, have reportedly moved to India and Bangladesh.

According to a multinational drugmaker, only four MNCs are currently listed at the Karachi Stock Exchange (KSE) compared to more than 15 a few years back. The situation is precarious for the local industry as it benefits from trained manpower and other technological and product research advancements worldwide due to these MNCs.

In the absence of any authentic data, industry officials are divided on the exports figure. Some say medicine exports fetch $145 million a year, while others suggest the amount is $180m, of which around 35-40 per cent go to the Philippines and the rest to Sri Lanka, Nigeria, Kenya, Sudan, Yemen, etc.

Industry people said the untapped exports potential is limited to low regulated markets because no manufacturing plant in Pakistan is approved from the US Food and Drug Administration (FDA).

Encouraging the drug manufacturers to attain the FDA approval will require some efforts from the government to show its commitment and move in this direction, they added.

They said India has 150 FDA-approved plants, and its exports increased from $6.23bn in 2006-07 to $8.7bn in 2008-09. India envisions exports to reach $50bn by 2020.

Even Bangladesh and Jordan have four and three FDA-approved plants, respectively, despite the fact that their pharma industries are relatively new.

A drug manufacturer believed that global giants prefer India in the region for business opportunities as DRAP’s failure to promulgate growth-oriented, industry-friendly laws and regulations has turned Pakistan into an unfavourable option for foreign investment.

Recently, a UK-based pharma giant has increased its shareholding up to 75pc in the Indian business for around $1bn on the basis that Indian market can reward the company in future owing to large volumes.

The US FDA has recently banned two Indian companies over quality issues and Pakistani exporters can easily make inroads to the United States with the help of government’s support.

Last seven years indicate that multinational pharmaceuticals are optimistic about investing in India as international players like Merck & Co, BMS, AstraZeneca, Chiron Corporation, Daiichi, Eisai, Teva, Ivax, Pliva and Apotex have invested in areas like contract research, clinical research, discovery research, marketing and manufacturing.

On the contrary, absence of crucial factors in Pakistan which are essential for facilitating the foreign investors like tax and tariffs, deregulation and privatisation, investment policy reforms, improved governance, and socio-political reforms have already resulted in exit of Fortune 500 companies like Johnson & Johnson and Merck from the country.