“Prices should be competitive and market based”- Dr. Haroon Siddiqi
I&M: EPLA is one
of the oldest pharmaceutical companies of Pakistan. Kindly give us a
summary of the history of EPLA.
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| Dr. Haroon Siddiqi with Prof. S. B. Hassan, President and Chief Editor, I&M and Salman Hassan, VP, I&M |
Dr. Haroon:
EPLA Laboratories (Pvt) Limited, as it is known now, was initially called
Eastern Pharmaceutical Laboratories when it was established by my father Mr.
Ehtasham Ali Siddiqi in 1952. The company grew well, by the Grace of Allah, and
we decided to construct a new factory in SITE Area, Karachi in 1960. In 1962,
we registered it as private limited company and in 1976 we changed its name to EPLA
Laboratories Private Limited. EPLA is the name we took from our branded
products, like Eplazyme. It was our highest selling product. We started from
Karachi and now have a distribution network all over Pakistan.
I&M: What was
your initial role and assignment in Epla?
Dr. Haroon:
When this company was established, I was studying in medical college. After completing
my studies, I joined EPLA in 1967, and was involved in promotional activities,
training of medical representatives, and marketing. After the death of my
esteemed father, I took over his responsibilities.
I&M: Were you
satisfied with the progress of EPLA’s new factory and did it deliver desired
results?
Dr. Haroon:
Certainly!! It was the only Pakistani company worth showing to foreigners
or investors at that time. Pakistan’s Ministry of Health appreciated us and
whenever any foreign health minister visited Pakistan, the Ministry organized a
visit to EPLA Laboratories. Various delegations visited EPLA and it was shown
to them as an example of the high-standard of Pakistan’s pharma sector.
I&M: What was the
role of government in the pharma industry in those years?
Dr. Haroon:
At that time, health and pharma industry were provincial government subjects.
In the 1960s, Dr. Junejo was there to control the health and pharma
sector. You just needed to write an application or proposal to him for drug
registration. It was very easy in those years. There was no drug
industry, so there was no drug regulatory authority at the time of partition.
After a few years, when two or three companies were established in Karachi as
well as in Lahore and started manufacturing drugs, the government formed a
small department of drug controllers. Provinces use to control all the
activities till the 1970s. Production and regulation ran well till the
Generic Drugs Scheme launched in 1971. The government thought this would
decrease prices and raise public welfare. All the brands were abolished
at that time and you had to sell drugs with generic names. For example,
Aspro Nicholas changed to Aspirin.
I&M: Do you think
in this period the menace of spurious and sub-standard drugs emerged?
Dr. Haroon:
Yes you may say that this was a result of generics scheme. Many unethical
businessmen started making tablets, using cheap and spurious raw material and
sold it using the generic name. Since there were few testing
laboratories, there was no control, and it was easy to make and sell
sub-standard or spurious drugs. This was the first time when this menace became
more prominent in the pharma industry. The government had to reverse
the generics scheme in 1976 in order to control quality, and they shifted
back to the selling of products by the brand names. As far as I remember,
it was the PPP government at that time which realized that the Generics Act is
badly affecting quality control in drug manufacturing.
I&M: At that
time, was there any research activity in Pakistan’s pharmaceutical sector?
Dr. Haroon:
Research is not an easy subject. Research means you create something new, like
a new procedure or method. It requires a lot of knowledge as well as
money. In Pakistan, the industry didn’t have that background knowledge,
and we didn’t have finances to go into research. What we could do is follow the
pattern or procedures given by other research companies through official books.
What is manufacturing? We buy raw material (already researched and made) called
Active Pharmaceutical Ingredients (API), include few chemicals like binders,
anti-fungal or anti-oxidant, etc. and compress the mixture into tablets.
That is manufacturing.
We cannot do basic research. Even if we want to
make basic raw material, we have to import chemicals. The basic raw
material is the by-product of the petro-chemical industry. When oil is refined
there are some burn-overs called Naptha, which is a by-product. Naptha is
broken down into different chemicals used as raw material in the pharmaceutical
industry. We still don’t have any chemical plant in Pakistan which can supply
fine chemicals to the pharmaceutical industry. We have to import it and
exporters charge us as much as they want. When we convert it to basic raw
material, we incur additional costs.
I&M: You have the
honour of serving as the first President of PPMA from a national pharma company.
What are your memories from the founding years of PPMA?
Dr. Haroon:
A few multinationals and few national companies made an organization called
PPMA. At that time, there were two wings of PPMA i.e. East and West.
After the separation of East Pakistan, PPMA developed on a regional basis i.e.
North & South. I used to attend their meetings at that time. The meetings
were really informal, and the officials would sit together, identify their
problems and find solutions. At that time, the Chairman was always from a
multinational as they were much stronger in the industry as compared to national
companies. After a few years, I thought I should not only attend meetings but
serve on a committee as well. It was not encouraged. But after a
few years, I was the first chairman who came from national company.
I&M: What was the
major issue at the time when you were the chairman of PPMA?
Dr. Haroon:
Pricing was an issue at that time also. We made a presentation and invested in
a campaign. We gave advertisements against price control for the
government’s attention in newspapers. Whenever I went to the Secretary of
Ministry, he used to show me literature and budget expenses advocate lower
prices. This problem is going on for a long time. Price war started with
the Drug Act 1976, when they started to register the products again.
I&M: What was the
procedure to get licenses at that time?
Dr. Haroon:
When licensing began, all the existing companies had to go through the license
procedure. Then they had to register all the products manufactured in
their companies, for which they had to give all the details like
formulation and prices etc. The procedure for getting licenses included
forms which contained questions like date of establishment of company,
location, area covered, number of employees, name of the pharmacist and
chemist, product range, etc.
For a new company, the application procedure took
6-12 months. It involved a lot of investment and risk. For example,
if they allowed you to sell your product but fixed prices less than cost, you
could not continue. So these were the problems with licensing in the initial
years.
I&M: In your
view, to what extent government should have price control?
Dr. Haroon:
Prices should be competitive and market based. We should let market forces
decides the prices. Other than that there are three ways. First is that the
government allows Cost plus Pricing. It is on one-to one basis and increases
the likelihood of corruption. Second is average pricing: the average of
all prices in the market for a product is fixed as the maximum price. But it is
not viable here because prices are already controlled. We can see the example
of India. The Average Pricing Policy has been dropped in favour of
market-based prices, not controlled by Government.
Third is Regional Pricing, which means we take
prices of regional countries and fix a regional average price.
Most companies are in favor of Regional Pricing
Policy, but government is not. Government at this time is saying go back to
2013 prices. Originators should have further 30% reduced prices and the next
price increase will be in 2016, according to the inflation and foreign exchange
rates. Personally, I think Government should control quality not prices.
I&M: Does Epla
compete for tenders of government hospitals for drugs?
Dr. Haroon:
Yes! We supply to the Government Hospitals as well as to defense. In
defense department, registration process is really strict. We have been
supplying to them for 25 years but there is much competition now. The process
of registration and approval is long in defense department and the recovery
of bills take 3-6 months. We have to do special packaging and printing for
them also. Likewise, to supply to the government hospitals, we have to do
packaging in green color for which we incur extra cost.
I&M: To which
countries do you export your products?
Dr. Haroon:
We export different products to Yemen, Kenya, Sudan, Sri Lanka, Uganda, Vietnam
and Macao. We are preparing for Tanzania also.
I&M: What are
your views about Human resource in Pharmaceutical Sector of Pakistan? EPLA
runs training or educational programs?
Dr. Haroon:
Yes, we run regular training programs in EPLA for our employees. In the
hiring and recruitment procedures, we face difficulty in finding right
candidates. More females are getting pharma education and we cannot
employ them for late hours. So we face problems in this regard.
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