US DRUG COMPANIES EYE PAKISTANI MARKET

A five-member delegation of leading US-based drugmakers has recently visited Pakistan, amid growing multinational investment in the country. The delegation applauded recent improvements in patent law, but stressed that greater protection for innovative pharmaceutical products was still needed.

Pakistan was scheduled to bring patent law in line with TRIPS by the end of 2005, but this deadline is likely to be missed. Industry sources suggest that even if these measures were introduced, the government would be unlikely to fully enforce the regulations, owing to the Pakistani population's dependence on low-cost copy drugs.

India, which has a large low-income population and a huge generics industry, approved a TRIPS-compliant patent law this year, and should provide a test-case for the region. Pakistan, as well as India's other neighbours, is likely to carefully observe how the country's drug industry develops in the coming years.

Pakistan has improved market conditions beyond patent law, exempting imported APIs from sales tax; 90% of APIs used in drug production in Pakistan are imported from China and India. However, Pakistan has balanced this by increasing customs duty to from 10% to 35% on bulk drug imports from India, leading to harsh criticism from the country's export-focused drug sector.