April 8: With the rise in investments, the market of medicines produced in Nepal is also growing. As per the present trend, Nepali pharmaceutical industry is fetching additional Rs one billion investment annually. According to the Department of Drug Administration (DDA), two to five new pharmaceutical companies start operation every year.

A 2005 survey conducted by South Asia Watch on Trade, Economic and Environment (SAWTEE) found the market share of Nepali medicine at 30 percent of total domestic market. However, the market share has increased to 45 percent recently as informed by DDA.

At present, more than 250 pharmaceutical companies are registered in DDA. Among them, 98 companies comprising 45 Allopathic, 42 Ayurvedic and 7 Veterinary companies are in operation.  

The DDA statistics shows that registration of new pharmaceutical companies is also growing. As per the drug market regulator, every year 8-10 pharmaceutical companies are registered. Data produced by DDA and Association of Pharmaceutical Producers of Nepal (APPON) reveals that Rs 30 billion has been invested in the domestic pharmaceutical industry so far, in which, total investment in allopathic pharmaceutical companies is Rs 18 billion.

According to industrialists, investment of Rs 200-400 million is required in Nepal to operate a pharmaceutical company. Deepak Pradhan, General Secretary of APPON says, “Significant increase in investments in pharmaceutical industry is resulting higher production.”

“Although Nepal has become self-reliant in general medicines, it still needs to import essential ones,” says Bal Krishna Khakurel, Director General of DDA. “Nevertheless, increase in domestic productions in the recent years is indicating a possibility of replacing imported medicines.” At present, Nepal requires medicines worth Rs 46 billion annually in which medicines worth Rs 21 billion are supplied by domestic companies.

Shankar Ghimire, President of APPON says, “Nepali pharmaceutical companies can share 80 percent of domestic market by 2025 if the government provides favourable environment to promote domestic medicine industry. Industrialists alone cannot promote the industry. Government should also extend its support through tax concessions and special relief packages.” “Government of some countries provides land free of cost to pharmaceutical companies for 10-15 years. With the support from the government, investments and production would rise and the country will become self-reliant in medicines.”

However, there is still dispute between pharmaceutical industrialists and the government regarding the implementation of maximum retail prices (MRPs) of medicines.  The cabinet on July 6 approved MRPs of 96 medicines. But pharmaceutical producers have rejected the government fixed rates claiming the prices to be unreasonable in the present context.