As Pakistan strives to enhance exports for long-term economic stability, the pharmaceutical sector is calling on the government to permit companies to invest 1% of their net profit in in-house research and development (R&D) rather than contributing to a centralized government-controlled fund.

According to Tauqeer Ul Haq, Chairman of the Pakistan Pharmaceutical Manufacturers Association (PPMA), the Central Research Fund (CRF) has largely been diverted toward administrative expenses instead of driving real innovation. The sector insists this policy shift is crucial for developing competitive products and strengthening international market presence.

Despite minimal government support, Pakistan’s pharmaceutical exports have been expanding to regions such as Africa, the Middle East, South East Asia, and the CIS. However, industry leaders believe targeted R&D investment would significantly enhance this momentum.

Currently, all pharma companies must contribute 1% of their net profits to the CRF. While initially intended to promote sector-wide research, much of the fund is used for laboratory infrastructure, digital records, and surveillance systems. While these are valuable for compliance, they do not directly support product innovation or export potential.

The pharma industry proposes redirecting this mandatory contribution toward internal R&D. This change, they argue, would:

  • Drive innovation in drug formulation and technology adoption.
  • Enable local production of advanced medicines, reducing dependency on imports.
  • Foster collaborations with universities and academic institutions.
  • Support the development of WHO-accredited laboratories and Contract Research Organisations (CROs) for local clinical trials.
  • Help companies achieve global certifications like US-FDA, EMA, MHRA, and WHO-GMP, critical for entering premium markets.

With rising export figures and growing domestic demand, the pharma sector believes that empowering firms to manage their own R&D spending can position Pakistan as a competitive hub for pharmaceutical manufacturing.