Pakistan once led India in pharma investment. What changed?

Six leading multinational pharmaceutical companies, including Glaxo, Abbott, and Bench French, chose Pakistan over India in 1952, according to Getz Pharma CEO Khalid Mahmood.

Speaking in a podcast with Kamran Khan, he said Pakistan was once seen as a preferred investment destination due to its progressive regulatory policies and close alignment with the United States.

“Pakistan was viewed with great respect globally,” Mahmood said. “Our foreign and industrial policies were always aligned with the U.S., which made our regulations more liberal and progressive than those of other countries.”

Today, however, the landscape has shifted. India now boasts nearly 1,000 U.S. Food and Drug Administration (FDA)-approved pharmaceutical firms, while Pakistan has none. Mahmood attributes this to the country’s failure to invest in research and development (R&D) and the lack of a vertically integrated supply chain.

Pakistan’s missed opportunity

Mahmood explained that producing FDA-approved drugs requires significant investment, with costs ranging from $1 million to $10 million per product. Unlike India, which has built a strong R&D ecosystem, Pakistan has failed to develop universities and research centers that collaborate with the private sector.

“India and China produce even the raw materials for pharmaceutical ingredients, while we remain dependent on imports,” he said. “When India-China relations soured, India injected $20 billion into its pharmaceutical industry to boost domestic production. Pakistan has no such strategic plan.”

Mahmood pointed out that Pakistan’s higher education institutions, like the H.E.J. Research Institute of Chemistry, could have played a role in pharmaceutical R&D but failed to do so.

The Getz Pharma approach

Despite these challenges, Getz Pharma has carved out its own path. Mahmood said the company operates Pakistan’s only WHO-approved in-house R&D facility, developing all its products independently rather than relying on licensed formulas.

“We reinvested our earnings into manufacturing, improving quality, and innovating,” he said. “Today, we have 8,000 employees, 260 products, and our vials of insulin are among the six biggest brands worldwide.”

The company has expanded its facilities over the years, setting up an insulin manufacturing plant in 2006 and an inhaler plant in 2010. Until recently, it was the only firm in Pakistan producing these critical medicines.

Why Pakistan still can’t manufacture vaccines

Mahmood also addressed Pakistan’s inability to produce vaccines, blaming government policies. While private companies import vaccines, local production remains nonexistent.

“How can I invest in a vaccine plant when I don’t even know who will buy my product?” he said. “A vaccine plant requires an investment of $50 million to $100 million, but the government doesn’t have a clear procurement strategy.”

China, he added, is willing to transfer vaccine technology to Pakistan, but without government support, private-sector investment alone is not enough.

Why multinational firms are leaving Pakistan

In recent years, multinational pharmaceutical firms have exited Pakistan, redirecting their investments to Vietnam, India, and other emerging markets. Mahmood attributed this to Pakistan’s stagnant economic indicators and burdensome tax policies.

“Countries like Bangladesh, India, and Malaysia have structured tax policies that favor industry growth,” he said. “In Pakistan, manufacturing is taxed heavily, while 40% of the economy remains untaxed. No one even talks about fixing this.”

Mahmood warned that if Pakistan does not revamp its industrial policies and invest in R&D, its pharmaceutical sector will continue to shrink while regional competitors surge ahead.