Pharma sector thrives with 21.79% growth amid economic stagnation

Pakistan’s pharmaceutical sector recorded a growth of 21.79% in the third quarter of 2024 compared to the same period last year, reaching a market value of Rs962.5 billion, according to data from international monitoring firm IQVIA. 

This growth comes against the backdrop of an economy struggling with stagnation, with overall economic growth at a mere 0.92% in the first quarter of the fiscal year 2025.

The sector’s growth has been attributed to a deregulatory policy introduced earlier this year, allowing drug manufacturers to adjust prices for non-essential medicines to offset rising production costs. 

Industry experts revealed that the surge in revenue was driven largely by price adjustments rather than increased unit sales. The industry sold 3.7 billion units over the past year, reflecting a modest volume growth of 2.27 percent, while revenue surged due to higher prices. The sector recorded its highest-ever monthly sales of Rs94 billion in September 2024.

Over the past 12 months, the industry introduced 540 new pharmaceutical formulations, contributing significantly to its growth. Local pharmaceutical companies (NATs) outpaced multinational corporations (MNCs) in both growth rate (22.62% for NATs versus 19.4% for MNCs) and market share, with NATs commanding 74.59 percent of the market in terms of value.

While the deregulation policy has boosted the pharmaceutical industry, it has led to a sharp increase in medicine prices, placing a heavy burden on consumers. 

Despite the sector’s success, the economy’s overall stagnation continues to pose challenges for other industries, including large-scale manufacturing, construction, agriculture, and services, which have shown little or no growth during the same period.