Demand for pharmaceuticals in Nepal will grow to 71.65 tonnes over the next five years, increasing at an annual rate of 7 percent, according to the latest report.
According to the detailed study of Pharmaceutical and Medicine Manufacturing Industries in Nepal, prepared by the Ministry of Industry, the annual demand for pharmaceuticals currently stands at 53.66 tons.
The study was conducted to analyze the current state of human allopathic medicine (pharmaceutical) manufacturing plants with respect to demand, supply, energy consumption and challenges for sustainability.
The report estimates that Nepal’s total pharmaceutical market is Rs 53 billion. Nepal imports pharmaceuticals worth 28.65 billion rupees mainly from India and drugs worth 24 billion rupees are produced by domestic factories.
At present, there are 62 pharmaceutical factories manufacturing medicine for human use, 8 pharmaceutical factories making medicine for animals, and 73 factories manufacturing Ayurvedic medicines. More than 30 factories are in the process of obtaining licenses for commercialization.
There are 390 foreign pharmaceutical manufacturers who supply drugs through importers in Nepal.
Nepal imports 70 percent of raw materials from India and the remaining 30 percent from China. India imports about 80% of China’s intermediate products to manufacture raw materials.
Deepak Prasad Dahal, outgoing President of the Pharmaceutical Producers Association of Nepal (APPON), said that with the government’s policy being more focused on imports, the growth of the domestic pharmaceutical industry has remained stagnant despite the huge demand for drugs.
âIn terms of quality, we can compete with any other product in the world,â said Dahal, who is also the CEO of MDH Pharmaceuticals.
“But due to government policy, domestic pharmaceuticals cannot even compete in the local market, because imported drugs are comparatively cheaper.”
Biplab Adhikari, secretary general of the association, said the Covid-19 pandemic has dealt a severe blow to the pharmaceutical industry and if the government does not protect this sector, many factories will close soon.
âThe government should stop importing domestically produced pharmaceuticals,â said Adhikari, who is also managing director of Innovative Pharma Lab.
Nepal is heavily dependent on India and India is dependent on China for raw materials and intermediate products have fallen sharply in China, as a result the cost has increased two to three times, according to the report.
Currently, most national factories are either closed or operating at 20 percent of capacity. The industry is facing problems importing raw materials from India due to the pandemic, according to the report.
India is the second largest country in terms of pharmaceuticals and exports at comparatively cheaper rates due to which domestic products cannot compete with Indian products, industry insiders said.
Although the government introduced the 2019 Safeguards, Anti-Dumping and Countervailing Measures Act, it has not yet entered into force, Dahal added.
Drugs imported from India account for the lion’s share of the Nepalese market at 52 percent, while domestically produced drugs account for 46 percent. Medicines imported from other countries represent the remaining 2% of the market.
The report says that most vaccines, biotechnology products, and modern technology-related drugs used for cancer control and intensive care, among others, are imported.
“If the government takes effective action on the basis of its budget announcement to make the country self-sufficient in essential drugs by promoting national factories, local production can cover 75% of the total market,” the report said.
The total investment of existing pharmaceutical factories in Nepal is over Rs 35 billion, according to the report.
The country imported raw materials worth Rs 9 billion in fiscal year 2019-2020, with the bill for packaging materials amounting to Rs 2.5 billion.
The report recommended that the government facilitate the purchase of raw materials and the latest technology, so that the cost of production can be reduced and the finished products can be available at competitive prices.
The report states that approximately 90 percent (59) of factories are large-scale and 10 percent are medium-scale. Most factories have a semi-automated production process.
According to a report, Nepalese pharmaceutical companies are required to pay $ 1,500 in registration fees to the Central Drug Lab of India before exporting drugs to the Indian market, while Indian companies are only required to pay Rs 50,000 to the Department of Drug Administration to export. medicines in Nepal.
While Indian companies take advantage of low drug registration fees in Nepal, domestic companies have to pay exorbitant fees in India, reducing their competitiveness in the Indian market. The Indian process of importing medicines from Nepal is long and cumbersome, resulting in difficulties in exporting.
Some substandard drugs available in the Nepalese market are either diluted or fail to meet the standards prescribed in the country’s pharmacopoeia, according to the report.
The United States Food and Drug Administration estimates that about 10 percent of all drugs in the world are counterfeit and 60 percent of them are found in developing countries. The World Health Organization estimates that 35% of the fake drugs produced worldwide come from India, where around 20% of all drugs sold are either fake or substandard.
The sale of unregistered drugs is widespread in Tarai regions due to the open border with India, according to the report. Supervisory and regulatory systems are not vigilant enough to deal with this danger and are made worse by lax enforcement of prescription rules, according to the report.
Of the total pharmaceutical factories based in Nepal, 36 follow Good Manufacturing Practices (GMP) certified by the World Health Organization (WHO) or national guidelines (DDA) and 10 are in the process of obtaining GMP.
The use of pharmaceuticals is governed by the underlying medical science. According to the report, the four primary medical sciences are: allopathy or modern medicine; Ayurveda, an ancient Indian science which mainly uses herbal remedies; Unani, of Chinese origin and widespread in Southeast Asia, followed by homeopathy, founded by a German doctor and quite popular at the beginning of the 19th century.
In many parts of the world, the pharmaceutical industry is focused on allopathy, the most modern medical science.
The report indicates that the direct employment generated by the pharmaceutical industry in Nepal is around 20,000.