Exploring the Pharma industry
२०८१, ७ पुष आईतवार १०:३७ मा प्रकाशित
Nepal health news, kathmandu. The pharmaceutical sector in Nepal, with a history spanning five decades, has progressed from producing basic medicines for common ailments to manufacturing advanced pharmaceutical products. It provides jobs to over 50,000 Nepali workers, encompassing both skilled and unskilled labor. Amidst the trend of skilled labor migration, the industry offers domestic employment opportunities, contributes to state revenue through taxation, earns foreign currency, fosters self-reliance, supports responses to epidemics, ensures a universal distribution network, and advances national technological development.
Significantly, Nepal has started exporting medicines to countries like the Philippines, Uganda, and several African nations—a commendable achievement. However, the capital investment required to establish a pharmaceutical industry in Nepal is substantially higher compared to India, reflecting stricter regulatory frameworks in Nepal. Although the World Health Organization’s Good Manufacturing Practices (WHO GMP) emphasize the importance of high-tech industries, Nepal’s government has been slow to adopt favorable customs, investment, and tax policies to support the sector.
Despite its potential to bolster the national economy, the government appears hesitant to establish cooperative systems. This reluctance may arise from concerns about regional diplomatic relations and a lack of dedication to fostering domestic industrial growth and employment. The pharmaceutical sector, which has made significant investments and provides employment to thousands, faces challenges such as limited sales and difficulty in generating revenue for growth. Ironically, the government continues to import medicines for common ailments, including colds, coughs, allergies, and antibiotics, despite the local industry’s capacity to produce these products.
In light of the current economic conditions, importing basic medications is particularly problematic. To support domestic production and reduce import dependency, the government should consider restricting the import of items like vitamins, antibiotics, painkillers, ointments, gastric medications, and drugs for
conditions like hypertension and diabetes. While the government advocates for reducing imports and boosting exports, concrete policies to achieve these goals remain absent, hindering progress toward self-reliance.
The government has a crucial role in safeguarding investments in the pharmaceutical sector. As these investments often come from public funds channeled through banks, their protection is essential. Establishing a domestic marketing system could ensure sustainability. Without such measures, the government must take responsibility for any financial losses.
Challenges and Current Landscape:
- Nepali pharmaceutical products struggle to compete against Indian, Bangladeshi, and Pakistani imports, with limited exports to these countries.
- Food supplements from India are being imported as medicines without adequate regulatory inspections.
- Nepal hosts over 25,000 pharmaceutical brands, a disproportionately high figure compared to its neighbors.
- Many heavily invested industries are gradually shutting down.
- Surging imports are exacerbating the trade deficit.
- Domestic companies are adopting advanced technologies, such as biotechnology and anti-cancer drugs, but face financial strain.
- Over 300 domestic and foreign companies market their products in Nepal—a significant number given its population of 30 million.
- Poor coordination between the Ministry of Health and the Ministry of Agriculture has caused regulatory confusion, particularly for nutraceuticals.
The pharmaceutical development cycle, as outlined by WHO standards, typically takes 1.5 to 2 years per product and up to five years for a comprehensive portfolio. However, Nepal Rastra Bank’s (NRB) policy requires industries to show profitability within three years, creating a disconnect between regulatory expectations and the realities of pharmaceutical development.
Recommendations:
To promote Nepal’s pharmaceutical industry and its economic contributions:
- Facilitate loan refinancing and temporarily reduce interest rates.
- Provide tax and duty exemptions to ease financial burdens.
- Reduce restrictions and eliminate barriers hindering domestic production.
- Restrict imports of medications that can be produced locally or adopt alternative strategies.
- Require government and affiliated institutions to prioritize locally produced medicines.
- Streamline the management of VAT and non-VAT pharmaceutical products.
- Align foreign product prices with domestic equivalents to ensure fairness.
Nepal’s pharmaceutical industry plays a vital role in job creation, revenue generation, and fostering self-reliance. Strengthening policies and engaging all stakeholders are essential steps toward realizing its full potential.
