PHARMACISTS PROJECTION IN NEPALESE PHARMA INDUSTRIES FOR NEXT 20 YEARS:

PHARMACISTS PROJECTION IN NEPALESE PHARMA INDUSTRIES FOR NEXT 20 YEARS

Page No: 1 of 16 27th Nov. 2009

PHARMACISTS PROJECTION IN NEPALESE PHARMA

INDUSTRIES FOR NEXT 20 YEARS:

Global Pharma-economic Scenario:

According to analysis, in 2009, global pharmaceutical sales increased by only 2.5% ~ 3.5%, reaching a total of about 750 billion-760 billion U.S. dollars, which is lower than in October last year the growth rate of 4.5% to 5.5%, a total of 8200 the forecast 100 million U.S. dollars. This growth rate is the lowest in the past 25 years.

Downward forecast reflects the lower growth rate of the global economy; currency fluctuations also reflect the impact. One down about 15 billion U.S. dollars is directly attributable to the economic downturn, while others reduced the amount attributed to the U.S. dollar impact. Because the research institutions in order to arrive at the estimated total, all in local currency terms of sales revenue in accordance with the present and the exchange rate conversion is expected to become the U.S. sales. At the same time, the research also brings some comfort: as compared with other industries, the pharmaceutical industry by the impact of economic environment is relatively smaller. However, this impact is still to continue until 2010, when the pharmaceutical industry is expected to rebound.

There is no "safe haven"

A long time, economists have always believed that, during the recession, the pharmaceutical industry is a relatively "safe haven." However, this time is not the case, in recent months, pharmaceutical companies, medical device manufacturers and hospitals significantly reduced income. Therefore, the research firm pointed out that the "safe haven" of the security assumptions no longer holds water. Research institutions in the Murray Aitken; senior vice president, said: "The drug needs and the important macroeconomic variables (such as gross domestic product, consumer spending and government spending) have a clear relevance. We can see that the global financial crisis is to the pharmaceutical industry's sales growth hit a record low this year. "

If the economic recession and the impact of pharmaceutical industry in 2011 and 2012 the number of patent expired products to consider together, the research institutions are expected between now and 2013, the global pharmaceutical market at an average annual compound growth rate (CAGR) for the 3% to 6%, while between 2004 to 2007, the growth rate of 6.6% ~ 7.9%.



The impact of varying economic crisis

The research found that the patient pays a higher proportion of drug costs of countries (such as the United States, China and Brazil); the pharmaceutical industry revenue growth will be gentler. In October 2008 on the agency issued a report forecasts compared to 15 key developed and developing countries economic growth in 2009 will drop 3.4 percent, which led to increase in drug sales in 2009 declined 2 percent higher than expected. The U.S. pharmaceutical sales in 2009 will drop by 1% ~ 2%, and create a new record. The report predicts that between now and 2013, including Canada, France, Germany, Italy, Japan, Spain and the United Kingdom, including "mature pharmaceutical market" will grow at 1% ~ 4%.

With the emerging pharmaceutical markets in 2013 will increase by 13% ~ 16%, a new pattern emerging. 2009, the seven emerging pharmaceutical markets (China, Brazil, Mexico, South Korea, India, Turkey and Russia) will contribute half of global pharmaceutical market growth to 2013, the seven emerging pharmaceutical markets around the world pharmaceutical market contribute an average of 40% increase. China is now the world's sixth-largest pharmaceutical market, the agency predicts that by 2011, it will become the third-largest pharmaceutical market.

Future of the Industry:-

The future of the industry looks guarded. There will be a reduced but still positive growth. IMS Health, a healthcare market research firm, issued a report in April 2009 cutting back the growth forecasts for pharmaceutical sales from 4.5 to 5.5 percent to only 2.5 to 3.5 percent in total sales, down from a prediction of $820 billion to $750 billion.

Theories/Speculation

Several blockbuster drugs are due to expire in the next few years, such as Pfizer's Lipitor in 2011 and AstraZeneca's Nexium in 2014, possibly endangering the revenues of the pharmaceutical industry for the next three to five years. IMS predicts that the growth rate for pharmaceutical firms will hover around 3 to 6 percent moving into 2010 to 2012, down from the average rate of about 7 percent from 2004 to 2007, as a result.

Predictions also suggest that demand for medications might fall in the developed world (especially the United States, by perhaps 1 percent), further reducing revenues for big pharma, although some of this decline will be offset from rising purchases in the developing world, especially Russia, South Korea, Mexico and China.



Impact of WTO policies in developing countries:-

The World Trade Organization (WTO) established in the last millennium has a philanthropic objective of achieving a single world market and economy. It views a world with no trade barriers of social, political, cultural and geographical nature. It wants a vibrant economy to play in the whole of the world. The advents in communication technology, co-operations in science are in fact giving a futuristic vision of one world and one economy. But practically there is a vertical division of the world in to developed and developing countries. The rise of patent regimen, General agreement on tax and tariff (GATT) and Trade related intellectual property rights (TRIPS) has given suspicion in the minds of the developing countries policy makers that WTO is used a device to maintain the economic scale of development always remains ahead of developing countries than developed countries.

New Challenges after entering into WTO arena :Patent Act 2004

• Life of patent for 20 years • Product-based patents • Exclusive market rights(EMR) for 5 years for patents in any other country • Prices of drugs will increase multifold, beyond the reach of common man

The poor infrastructure, fragile economy, unemployment and poverty are in fact holding back development of economy in developing countries like Nepal. Pharmaceuticals are health inputs and are not to be treated par with consumables.

Essential Drug Policy of World Health Organization:-

World health organization (WHO) essential drug policy clearly aims at providing a health for all and accessibility of primary health care and medicine to all the human beings of the world, irrespective of color, creed and economic status. It is continuously impressing upon governments of developed and developing countries to make prizes of the drugs such that for want of money no one get deprived of medicines and suffers morbidity and mortality due to diseases.

Power of Multi-nationals:-

• Two third of World’s trade is done by Multi National Companies (Approx. $ 6 Trillion). • The total compensation package of the Top 10 Pharma MNCs is more than twice the R&D

spends of the Indian Pharma Industry; data are not available on Nepalese R&D expenditure. • The share of MNC Pharma in Indian market,in 1971 was 75 per cent. Now, it's 35 per cent,

Similar condition of Nepalese Market could be seen on present condition and can we repeat the history of India?



Pharmaceutical Industry of NEPAL:-

The pharmaceutical industry has been a powerful and dynamic industry in the past 10 years, growing even when other industries have taken sharp downturns. However, due to the financial crisis of 2008 and subsequent economic recession, economists predict that pharmaceutical industry growth will slow in the coming years, despite strong past performances.

Nepalese Pharma Industries: A self-analysis:-

Strengths:- • Mature Industry with strong manufacturing base • Well-formed Legal and Financial frame-work

Weaknesses:- • Inadequate resource base • Poor R&D efforts • Inadequate clinical and regulatory network. • Low profitability of industry due to high competition • Development as a Commodity player at global level, rather than brand player • Lack of International marketing efforts

What can Pharma Industry do?

• The opportunity to consolidate the growth of the industry that happened in the last 10 years should not be lost for lack of vision

• Rise of Pharma industry at the global level is better for the country in all respects

• Strategize for the future with global Vision.



Results obtained from “REPORT ON CONSUMPTION AND QUANTIFICATION OF MODERN DRUGS FOR HUMAN USE IN NEPAL”

Conclusion of 2001: The study shows the consumption of allopathic drugs in the fiscal year 2056/057 (1999/2000) has been Rs. 5907 millions. The annual increment of consumption has been 18.8%. Twenty six percent of the consumption is met by national industries.



Conclusion of 2006: The study shows the consumption of allopathic drugs in the fiscal year 2061/62 (2004/05) has been Rs. 10659 millions. The annual increment of allopathic drugs consumption has been 16.1%. Thirty-two percent of allopathic drugs consumption is met by national industries. Considering the commercial sector only, 64.6% is the share of import and 35.4% is the share of domestic production of the allopathic medicine.



Considerations:- Average 5 % of total budget of Nepal has been provided as an expenditure in Health Sector, it will be definitely increase in the future , which will in turn increase the percentage on the Drug Consumption by the population.



Considerations: Few Health Insurance Models have been practicing in Nepal, which could/may be elaborated in future. Also, Health Insurance Scheme from private sectors is also being implemented in these days. It will increase the total amount of Drug Consumption on the population in the future days.



Source: STRATEGIC PLAN FOR HUMAN RESOURCES FOR HEALTH; 2003 to 2017

MINISTRY OF HEALTH KATHMANDU; April 2003

Considerations: As per the Chart the percentage change for the occupational requirement for Pharmacists is 1234% on the health care system, which is in the greater side than other occupation.



Projection and Its Requirement: Planned economic development requires data about various aspects of socioeconomic conditions at different levels. Indicators of development are directly or indirectly related to the size and structure of the population. It is, therefore, of paramount importance to know various aspects of the size and structure of population at different points of time. Another important requirement of educational planning is enrolment projections which forms the basis for many of the investment decisions. For example, new schools to be opened or upgraded and the number of teachers required are decided on the basis of the number of children to be enrolled. None of these tasks can be accomplished efficiently unless the planner has an adequate idea of how many students will enter the system, how they will proceed through various grades, and what number will graduate.

Projections are conditional statements about the future. They refer mostly to the exercises of extrapolation of the past trends into the future; and they do not take into account changes in the policy parameters. For example, a projection of the future population growth may not be taking into account changes in the government health policies, family health programs, etc. Projections are based on the assumption that the past trends will continue to operate in the future. The reliability and usefulness of projections depend on the assumptions and their closeness to reality. In the long run, the policy parameters are to be incorporated in the projections. The likely effects of policy changes are to be judged and projections are to be made accordingly. Thus, when an element of judgment is added to the projections, it becomes a forecast. Forecasts enjoy the advantage of being based upon the assumption or a set of assumptions which are likely to be realized in the near future and can yield a relatively more realistic picture of the future. In general, population projections are treated as predictions and are never to be termed as final population. They should be reviewed frequently in order to determine the degree to which they agree with recent demographic changes. If the discrepancies between the projections and the ultimate events are significant, it should be found out whether it is due to the quality of input data or due to the methodology adopted.

POPULATION PROJECTION TECHNIQUES:

There are various methods of projecting population (mathematical, economic and component methods). Some are very sophisticated and rigorous while others are simple and less sophisticated. Normally, population in future is governed by the following equation:

Pn = Po + Number of Births (B) - Number of Deaths (D) + Net Migration (Nm)

For the projection of population in 2011 (Pn), base year population (Po) in 2001, the number of births and deaths between 2001 and 2011 and net migration is required. Keeping in view the in-migration and out-migration, net migration may be either positive or negative. Though population in the base year (2001) is available, number of births, deaths and migration in future needs to be projected which is not an easy task.



Calculation and Consideration:-

Table 1: Required No. of Pharmacist for a WHO-GMP standard company of Nepal



As per the report of DDA (Quantification of Drug), the Drug Consumption rate has been increased by 80% in 5 years and if we extra-plot the data up-to 2030, the value will be increased up-to 203656.90 Million Rupees. The market coverage of Nepalese Industries in Nepal, at 2030 should reach beyond 90% of total value to make a business of above mentioned value.

Graph -1: X – axis: Years from 2000 to 2030 (1 point = 5 years), Y – axis: Drug Consumption.

Growth rate Calculations of Nepalese Pharma Industries:-

0

50000

100000

150000

200000

250000

1 2 3 4 5 6 7

YEAR

DRUG CONSUMPTION*



The growth rate of Pharmaceutical Companies, considering the data of last 37 years is 7.17%, however, considering data of last 13 years, it is only 5%. As per the considerations of growth in the consumption level and market occupation in future, the data has to be plotted from both growth rates, which will provide us the maximum and minimum numbers of Pharmaceutical Companies going to be opened in the future. As our main aim is calculation of number of pharmacist required for the industrial section only, the growth rate of Nepalese Pharma Industries and the minimum / maximum numbers per year will provide us a clear vision for the future.



Final Conclusion:

The minimum number of Pharmaceutical Companies in next 20 years will be 125 and maximum number will be 193. The Pharmacists required to work, in the Quality Control, Production, R&D, QA, etc areas of inside Pharma Industries of Nepal (@ 15 per factory) will be in the range of 1881 persons to 2890 persons.

The average number of Pharmaceutical industries in next 20 years will be 159 companies. The numbers of Pharmacists required for next 20 years in the Industrial sector is 2385 numbers.



Graphical Representations of the Interpreted data:

Graph 1: No. of Industries in next 20 years.

Graph 2: Data Showing Increment in the no. of Pharmacists required for next 20 years.



References:-

• Pharmaceutical Industry Growth: By Collin Fitzsimmons

• PROJECTIONS OF POPULATION, ENROLMENT AND TEACHERS ; ARUN C. MEHTA

• FAOSTAT, year 2005 : http://faostat.fao.org/faostat/help-copyright/copyright-e.htm

• HEALTH INSURANCE MODELS IN NEPAL: SOME DISCUSSIONS ON THE STATUS OF SOCIAL HEALTH INSURANCE

• Changing trends in pharma markets: Impact of WTO policies in developing countries; Arvind M B, C S Shastry, G K Kadikudi, Kole P L, Nagappa A N

• REPORT ON CONSUMPTION AND QUANTIFICATION OF MODERN DRUGS FOR HUMAN USE IN NEPAL, Pharmaceutical Horizon of Nepal (PHON) Kathmandu , July, 2001

• REPORT ON QUANTIFICATION OF DRUG CONSUMPTION IN NEPAL, Pharmaceutical Horizon of Nepal (PHON), Kathmandu, July 2006

Special Thanks to:

• Department of Drug Administration (DDA) Bijulibazzar, Kathmandu, Nepal. www.dda.gov.np • Association of Pharmaceuticals Producers of Nepal (APPON)

Contact Details:-

Bibek Singh Mahat, M. Pharm. 1st Year, 1st Semester, Batch of 2009; Kathmandu University,

School of Science, Department of Pharmacy, www.ku.edu.np/pharmacy

Email: [email protected]

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