KARACHI: The price deregulation of non-essential medicines in early 2024 has improved access to medicines and brought much-needed stability to the pharmaceutical sector, creating space for sustainable and long-term industry growth.
The policy shift, aimed to create a market-driven approach while addressing longstanding challenges in the sector, provided flexibility to pharmaceutical firms, allowing them to adjust prices in line with market conditions.
By aligning prices with inflation and currency fluctuations, companies have managed to stabilise production of medicines that were previously at risk of becoming unavailable due to pricing constraints, according to experts.
Pharma sector: SIFC backs deregulation as exports surge
Contrary to the skepticism surrounding price deregulation, the past year has proven it to be a correction rather than a market free-for-all.
Essential medicines—listed under the National Essential Medicines List (NEML)—remain under strict government’s price controls, ensuring continued affordability for vulnerable populations. However, by removing artificial price ceilings on non-essential medicines, the government restored confidence among manufacturers and revived production lines.
“This (deregulation) was not about letting prices run wild, but it was about saving healthcare industry on the verge of collapse and increasing access of patients to genuine medicines at market price,” said a former Pakistan Pharmaceutical Manufacturers’ Association (PPMA) chairman. “Deregulation has balanced sustainability with patient access.”
With production becoming financially viable, many life-saving but previously discontinued drugs are now back on shelves. The volume of medicines sold rose by 3.79% year-over-year, according to IQVIA data dated February 2025, countering claims that higher prices have reduced access.
Stable supply chains have also curtailed the rise of unregulated and counterfeit substitutes that had filled the void during previous shortages.
Deregulation brings innovation, investment
The economic impact of deregulation has been supportive. In the first quarter of FY25, the sector recorded a 5.6-fold increase in profitability, jumping to Rs5.6 billion from Rs1 billion in the same quarter of FY24, according to Topline Research.
The growth was driven by improved margins, reduced financing costs, and greater production efficiency.
The profitability has translated into increased investment. PPMA member companies are rapidly upgrading their manufacturing facilities to meet WHO PQ and PIC/S standards. The improvements can position Pakistan to significantly expand exports to regulated markets across Asia, the Middle East, and Africa.
PPMA officials estimate that Pakistan’s pharmaceutical exports significantly surged to $500 million in the first half of FY25, suggesting having potential to reach $1 billion in full-year FY25 and $5 billion in the next five years, provided deregulation and policy stability remain in place.
“Global buyers are now viewing Pakistan as a reliable, high-quality supplier,” a PPMA spokesperson said. “This is a major shift from just two years ago.”
According to industry sources, Pakistan and Afghanistan are to reach an understanding in the healthcare sector, enabling Islamabad tap around $500 million export potential in the neighbouring country.
Stock performance soars
Market sentiment has surged in response to these developments. The pharmaceutical sector’s value climbed 194% year-to-date, far outpacing the KSE-100 Index (which rose 84%), it was learnt. For the first time in years, pharma stocks are among the top-performing equities at the Pakistan Stock Exchange (PSX).
Haleon posted a staggering 436% gain year to date, Glaxo rose by 362%, Macter gained 315%, while AGP is expected to continued performing well this year; 2025.
PPMA continues to advocate for a rule-based, transparent pricing mechanism for the sector, while ensuring that essential drugs remain affordable and accessible. The association is also calling for strengthened collaboration with the Drug Regulatory Authority of Pakistan (DRAP) and the Ministry of Health to prevent market abuse, reinforce public trust, and build a more innovation-driven ecosystem.
“This is not just a recovery story—it’s a growth story,” said the former PPMA chairman. “The reforms have given Pakistan’s pharmaceutical industry a new identity: competitive, credible, and caring.”
Copyright Business Recorder, 2025
