Pakistan's Pharmaceutical Sector Surges with 22% Growth in FY24, Hitting Record Sales

Pakistan's pharmaceutical industry saw remarkable growth in FY24, with sales reaching Rs916 billion (USD 3.3 billion), a 22% year-on-year (YoY) increase in PKR terms, and a 7% rise in USD terms. This growth surpasses the previous five-year (FY20-FY24) Compound Annual Growth Rate (CAGR) of 17%.

In the fourth quarter of FY24, the sector posted its highest-ever quarterly sales, recording Rs237 billion (USD 860 million), a 25% YoY increase. Of this growth, 20% was driven by price hikes, while 5% came from increased sales volume.

The industry is a mix of local and multinational players, with major contributions from Getz Pharma, The Searle Company, Ferozsons Laboratories, and global giants like GlaxoSmithKline (GSK) and Abbott Laboratories.

The significant price rises were largely due to the government's deregulation of drug prices for non-essential categories, alongside a one-time price hike for 146 drugs in February 2024. Initially, the price deregulation, approved on February 6, 2024, was stayed by the Lahore Court, pending clarification from the Federal Government. However, on April 2, 2024, the Lahore High Court ruled in favor of deregulation, allowing pharmaceutical companies to adjust Maximum Retail Prices (MRPs).

The report emphasized that deregulation would help companies restore their gross margins, currently at a decade-low of 26%, by allowing them to pass on costs more efficiently.