US DRUGMAKERS TO AGREE TO PAKISTAN INVESTMENT TERMS

A delegation of leading US drugmakers -- which has been in negotiations with Pakistani officials for a number of weeks -- has announced a basic agreement on investment in the country's drug sector.

One factor that has previously discouraged investment has been the lengthy registration periods for new drugs. Also, foreign drugmakers have called for a pricing mechanism to be introduced to protect innovative drugs. Assuming such measures are implemented, US manufacturers have pledged to increase investment in the country, bringing in much needed technology and expertise.

However, intellectual property still remains an issue. Although Pakistan is committed to bringing patent law in line with TRIPS by the end of 2005, industry sources believe that the government will be unlikely to strictly enforce the new rules, owing to the population's dependence on low-cost copy drugs.

Despite these issues, Pakistan is a potentially lucrative market. Drug consumption in the country remains low, but this potential could drive drug market value to US$4.6bn by 2009. Some encouragement is offered by the fact that, in contrast to some of its South Asian and Middle Eastern neighbours, Pakistan permits 100% full foreign ownership permitted in both the manufacturing and infrastructure sectors.