LCI acquires Pfizer's manufacturing facility, products

Abid Lodhi 03:38 PM, 14 May, 2024
LCI acquires Pfizer's manufacturing facility, products

KARACHI: In a significant development in Pakistan’s pharmaceutical sector, the Board of Directors (Bod) of Lucky Core Industries (LCI) Limited has approved the purchase of a manufacturing facility previously owned by Pfizer Pakistan Limited, along with the acquisition of certain pharmaceutical products, and the trademarks associated with them.

LCI shared this development through a notice to the Pakistan Stock Exchange (PSX) in accordance with Sections 96 and 131 of the Securities Act, 2015 and the relevant provisions of the Rule Book of the Pakistan Stock Exchange Limited.

“The Board of Directors of Lucky Core Industries Limited have approved the purchase of a manufacturing facility owned by Pfizer Pakistan Limited located at B2 SITE Karachi, along with the acquisition of certain pharmaceutical products, and the acquisition of trademarks associated with the said pharmaceutical products (either through an outright purchase of the trademarks or a perpetual license to use the relevant trademarks) from relevant Pfizer group entities.”

The BoD has also authorised the finalisation and execution (as necessary) of the definitive transaction documents/agreements, including the Asset Purchase Agreements, Trademark License Agreement and all ancillary documents forming part of the transaction with Pfizer Pakistan Limited and/or its group entities, reads the notice.

Meanwhile, the escalating dollar prices in Pakistan have exacerbated the challenges faced by pharmaceutical companies, leading to a halt in medicine production due to stringent drug laws and the resulting shortage of over a hundred life-saving medicines.

Mian Khalid Misbah, Chairman of the Pharmaceutical Association (PPMA), highlighted the predicament of the local pharma sector during a recent media interaction, attributing it to the surge in dollar value, raw material prices, and inflation rates within Pakistan.

He said that under the Pricing Policy 2018 by the Drug Regulatory Authority of Pakistan (Drap), the prices of life-saving drugs are permitted to increase annually by 7 to 10 percent. However, this has resulted in many Pakistani pharmaceutical companies ceasing production of essential drugs, with only a few of them continuing to manufacture these critical medicines.

The PPMA head warned that the repercussions of this situation extend beyond unemployment among the working class, aggravating the shortage of medicines in the country and potentially leading to the proliferation of non-standard fake drugs in the market.

Mentioning the issue of deregulation of price controls in Pakistan, he said though the country has removed price controls on non-essential drugs to improve quality and encourage market competition, the pricing of life-saving drugs remains under the purview of the government, with 494 such drugs subject to regulation. In comparison, India, Bangladesh, and Sri Lanka control the prices of 384, 117, and 60 life-saving drugs, respectively.

Mr Misbah questioned the sustainability of pharmaceutical companies in producing medicines amidst losses, especially considering operational expenses such as electricity bills, worker salaries, and procurement of raw materials. The current situation has resulted in a shortage of drugs for thyroid, hypertension, insulin, and psychiatric diseases, he regretted.

The PPMA head said that Dr. Mukhtar Bharath, Advisor to the Prime Minister on Health and CEO of Drap, acknowledges the pressing need to address these issues to prevent industry closures, job losses, and worsening medicine shortages, in a recent meeting.

He also pointed out the 262 pending hardship cases of life-saving drugs, because of deregulation, of which 146 were awaiting decisions for two years, demanding their resolution for stabilizing the pharmaceutical sector.

He added that during these two years, the manufacturing costs of these drugs has increased manifold because of a massive increase in the prices of raw materials, dollar rate, electricity prices and labour charges, causing huge losses to the pharmaceutical companies.     

He said the situation has resulted in shortages of several medicines, including those for epilepsy, psychiatry, diabetes, and respiratory diseases in Karachi's wholesale drug markets, causing concern among healthcare providers and patients alike. The availability of medicines is crucial for maintaining public health and preventing the proliferation of counterfeit drugs in the market.