Pharma Sector Booms Amid Deregulation and Cheaper Imports

Pakistan’s pharmaceutical industry is experiencing an unprecedented surge in profits, driven by deregulated pricing policies and the availability of low-cost Chinese active pharmaceutical ingredients (APIs). According to recent research, sector profits have more than quadrupled between FY23 and FY25, marking one of the strongest growth phases in recent history.

The deregulation of prices on non-essential drugs has given companies greater flexibility, allowing them to adjust to market dynamics and improve margins. At the same time, a 35% drop in Chinese API costs has significantly reduced production expenses, boosting profitability across the board.

Industry experts highlight that the sector’s valuations have risen 3.3 times since 2024, reflecting investor confidence and a robust product pipeline. With exports climbing and new products entering the market, pharmaceutical companies are recovering from previous losses and low baselines, setting the stage for sustained expansion.

Looking ahead, the sector is projected to grow by 35% year-on-year in 2026. Analysts believe that the combination of deregulated pricing, stable exchange rates, and affordable imports will continue to fuel growth, positioning Pakistan’s pharma industry as a key player in the region.

This remarkable turnaround underscores how policy shifts and global supply chain dynamics can reshape entire industries, offering both challenges and opportunities for local businesses.