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Export incentive for pharmaceutical industry
EDITORIAL (February 05 2003) : The duty drawback facility that the government has allowed to the pharmaceutical firms in the country can certainly help enhance prospects of selling the country's pharmaceutical products in the world market.
Although described as a major step towards boosting the export of the pharmaceutical products made in Pakistan, it need not be taken as a guarantee without qualifications which are inherent in it.
The facility announced in the Central Board of Revenue (CBR) SRO 112(I)/2003, as based on standardisation, would, of course, provide level playing-field for the country's entire pharmaceutical industry.
Its benefit will depend upon the efficiency with which individual firms avail of the facility in the midst of stiff competition in the world market and at home too.
It will be noted that this strategy has been adopted after consensus among Pakistan Pharmaceutical Manufacturers Association (PPMA) and Input Output Coefficient Organisation (IOCO), which conducted a survey of various pharmaceutical units to standardise the duty drawback rates on the request of the Association.
Effective January 31, 2003, the new facility on export of thousands of medicines in a wide and varied range should certainly help big and small manufacturers alike, and expand the home market base of the local manufacturers.
So far restricted generally to the comparatively low demand within the country, the manufacturers had been virtually running a handicap race with little promise of any sizeable gain even in the longer run.
It goes without saying that all pharmaceutical companies in Pakistan will now have an opportunity to expand its trade base by introducing its products, including veterinary drugs, tablets/capsules, liquids/suspensions, creams/ ointments, injections and intravenous solutions, in the global market.
For, among other measures, the CBR has also withdrawn duty drawback facility from certain individual pharmaceutical companies, as there is no need left to give any specific rebate in the presence of standard SRO.
However, the duty drawback will be allowable only if the imported input raw material of the export goods is in conformity with the contents mentioned on the printed packaging material of the product approved by the Ministry of Health.
It has also been explained that efforts for several past years to issue a standard SRO allowing duty drawback for the whole pharmaceutical industry had remained handicapped due to lengthy list of raw materials and complicated specifications.
By adopting the new approach, the CBR has now managed to issue a general categorisation of input materials to extend the facility to the entire sector.
Many and varied having been the woes of the country's pharmaceutical sector, the solution to its accumulated problems, including those of prices and quality, entailed a great deal of multidirectional effort, especially during the past three years.
Although all the other segments of the manufacturing industries have remained adversely affected due to long unresolved problems of a common nature, this particular industry has an importance of its own from the angle of public health.
With a distinct role in the war against diseases, particularly with reference to life saving medicines, the concern for low enough prices together with assurance of unfailing quality should become quite understandable.
Again, the pharmaceuticals being cost intensive equally understandable should be the clash between the authorities and the manufacturers around which have revolved its problems.
It will, however, be recalled that determined efforts made by the previous government from an objective business-friendly approach, did prove instrumental in the retrieval of the national pharmaceutical industry from a number of deeply troublesome restraints threatening its very existence.
This has reference to the bold and imaginative effort from a holistic approach, with suitable measures to ensure against any difficult situation arising from reluctance to address the problem of prices.
The incentive for export now introduced forming part of that thrust can certainly help healthy growth of the pharmaceutical sector in the years ahead that will require the industry to so organise itself as to meet the challenges of globalisation too.
Source:
Business Recorder
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Pakissan.com;
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