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Executive Summary
In Pakistan, public and private health care systems run in parallel. The public sector, led by the Ministry of Health until recently, has deferred to the provinces for issuance of healthcare to the general population. The administrative and fiscal space of provinces has increased manifold with simultaneous increases in their responsibilities, however they remain deficient in health workforce and facilities, relative to the size of the population.
The private sector plays a vital role in the delivery of healthcare services in Pakistan. Most private hospitals, clinics, and health related facilities are in urban areas and are well-equipped with modern diagnostic facilities. These private healthcare options are in greater demand than healthcare available through the public sector.
The public sector health services are provided at federal, provincial, and district levels through a well-established network of rural health centers, basic health units (BHU), and allied medical professionals. The health profile of Pakistan is characterized by high population growth. The rising population pressure on state health institutions has allowed the private sector to bridge the gap of rising demand and limited public health facilities.
Similarly, expansion in the Government of Pakistan’s universal health coverage insurance program has led to an increase in the demand of healthcare infrastructure as government is providing health care services to general public both from public and private hospitals.
Public health activities have persistently increased in terms of physical infrastructure and workforce, including increased numbers of doctors, dentists, and nurses. National health infrastructure is comprised of 1282 hospitals, 5472 BHUs, 752 Maternity & Child Health Centers, and 412 TB centers. Despite an elaborate and extensive health infrastructure, health care delivery suffers from some key issues such as, high population growth, uneven distribution of health professionals, deficient workforce, insufficient funding, and limited access to quality healthcare services.
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Market Entry
Healthcare services and medical devices are in high demand in Pakistan, particularly in the growing private healthcare market. The Government of Pakistan (GOP) spent about $ 2 billion on healthcare development and infrastructure in the fiscal year ending June 2021. Private hospitals and clinics are expanding rapidly, especially in cities, catering to a rapidly growing middle class. According to a well thought of research study, the medical devices market in Pakistan is estimated at $500 - $600 million USD with an estimated growth rate of 15% CAGR over the next five years (2019-2023).
U.S. medical equipment and products are usually well-received in Pakistan and are known for their quality and durability. One strategy for U.S. manufacturers and suppliers to penetrate the Pakistan market is to utilize the benefits of the network services and programs of the U.S. Department of Commerce’s Export Assistance Centers (USEAC), in association with the U.S. Commercial Service at the U.S. Embassy in Islamabad, Pakistan, and the U.S. Consulates in Karachi and Lahore.
Seeking the assistance of USEACs before exploring opportunities in this market is highly encouraged. It is recommended that U.S. firms from the very outset work with locally-registered firms to help navigate a complex business culture. U.S. firms are encouraged to review the following website: https://www.trade.gov/pakistan
Many foreign manufacturers and suppliers appoint one or more agents/distributors to cover the entire country. At times, foreign principals work through a regional office in Dubai, Singapore, or London. It is comparatively easy to switch agents and distributors in Pakistan, as per agreed terms in contract, without being exposed to legal liability.
Price and after-sales service support are major aspects of a decision-making process. It is always recommended to keep a letter of credit as a mode of payment for imports. Procurement decisions in government follow a tendering process, which is time consuming. Comparatively, it is swifter in private hospitals.
Healthcare services and medical devices are in high demand in Pakistan, particularly in the growing private healthcare market. The Government of Pakistan (GOP) spent about $ 2 billion on healthcare development and infrastructure in the fiscal year ending June 2021. Private hospitals and clinics are expanding rapidly, especially in cities, catering to a rapidly growing middle class. According to a well thought of research study, the medical devices market in Pakistan is estimated at $500 - $600 million USD with an estimated growth rate of 15% CAGR over the next five years (2019-2023).
U.S. medical equipment and products are usually well-received in Pakistan and are known for their quality and durability. One strategy for U.S. manufacturers and suppliers to penetrate the Pakistan market is to utilize the benefits of the network services and programs of the U.S. Department of Commerce’s Export Assistance Centers (USEAC), in association with the U.S. Commercial Service at the U.S. Embassy in Islamabad, Pakistan, and the U.S. Consulates in Karachi and Lahore.
U.S. firms are also encouraged to consider the International Company Profile (ICP) service offered by the U.S. Commercial Service. Through this service, the U.S. Commercial Service office in Pakistan can provide a comprehensive background check on any local firm operating in Karachi, Lahore, Islamabad and Rawalpindi, Peshawar, and beyond. U.S. firms can apply for this service through any of the U.S Export Assistance Centers located in their region. Find your nearest USEAC at https://www.trade.gov/commercial-service-offices-us.
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Current Market Trends
There are various potential public-private partnership projects in the public healthcare sectors that would provide opportunities for U.S. exporters. As Pakistan’s healthcare sector is luring to modernize, the demand for modern, and hi-tech medical devices and treatment is increasing which not only caters the need of Pakistanis but fulfils the demands of patients from Afghanistan. While the growth of the public health sector is limited by budget constraints, the relatively fast-growing private sector health services has provided good opportunities for US suppliers of medical devices.
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Best Prospects
The most promising sub-sectors in the healthcare and medical equipment sector are:
- Respirators
- Cancer Diagnostics
- Medical Imaging
- Electro Medical Equipment
- Orthopedic and Prosthetic Appliances
- Medical and Surgical Instruments
- Ophthalmic Instruments and Appliances
- Orthodontic Equipment’s and Dental Implants
- Point of Care Testing (POCT) Diagnostic devices
The sub-sector of health IT also presents growing opportunities for US suppliers of IT and electronic health record software. Telemedicine and medical tourism are other areas where there is a gap and holds good prospect for the US companies.
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Market Size
Healthcare spending (including investment) |
|
… as percent of GDP: | 1.2% |
Hospitals, Procedures, Healthcare Professionals UN:
Number of hospitals | 1982 |
…Public | 1282 |
…Private | 700 |
Number of hospital beds | 133707 |
… available bed | 1 bed for 1608 persons |
Number of surgical procedures | 454 per 100,000 population per year |
…of which: Alimentary tract |
|
…of which: Urinary tract |
|
Physicians | 1 doctor for 963 persons |
…of which surgeons |
|
Dentists | 1 dentist for 9413 persons |
Demographics
Population | 235.8 million |
Life expectancy men/women | 67.3 years |
Infant mortality | 55.7 deaths/1000 live births |
Percent of population older than 65 | 3.5 percent of the total population |
…projection, 2030 |
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Annual deaths | 7.5deaths/1000 population |
…caused by: Heart disease |
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…caused by: Cancer |
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Prevalence of: Diabetes |
|
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Main Competitors
Main competitors are European, Chinese, Japanese, and South Korean products.
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Current Demand
There is a mushrooming in demand for diagnostic and lab equipment in Pakistan. Due to global pandemic, demand for protective equipment and vaccines have increased tremendously. With the number of hospitals, dispensaries, healthcare units expected to increase due to Government of Pakistan’s plan to expand their healthcare network and face COVID-19 situation, market demand for equipment listed below is expected to grow:
- Diagnostic imaging equipment
- Respirators, ventilators and rapid tests
- Lab equipment, diagnostic point-of-care tests
- Laser surgery devices
- Cyberknife system
- Implantable cardiac devises, neurostimulation systems
- Dental equipment and materials
- Orthopedics and prosthetics
- Mobile hospitals and ambulances
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Registration Process
Pakistan’s Drug Regulatory Authority has issued new medical device and in vitro diagnostic (IVD) regulatory requirements, otherwise known as the Medical Devices Rules of 2017. According to the new rules, role of assessment and evaluation of medical devices would be performed by a Medical Devices Board. The process of registration of medical devices has been relaxed, while the fee structure has also been revised. Technical documentation requirements for registration of medical devices have been minimized, if imported from reference countries including the U.S., European Union, Japan, Canada, and Australia. For more details and guidelines, please visit the Drug Regulatory Authority site: https://dra.gov.pk/Home/DownloadsAllDocs
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Barriers
Pakistan has a long history of government intervention in pharmaceutical pricing. A 17-year freeze on drug prices caused many multinational companies to reduce operations in Pakistan or exit the market entirely. After considerable deliberation with industry, Pakistan passed the Drug Pricing Policy (DPP) in 2018. Industry welcomed several changes that the 2018 DPP made to pharmaceutical regulation in Pakistan, such as granting an automatic yearly price increase for pharmaceutical products that is linked to inflation. Industry continues to have concerns, however, regarding the overall viability of Pakistan’s healthcare market given acute price controls, and there have been several attempts to roll back constructive provisions of the DPP.
Likewise, Pharmaceutical companies experience significant delays in registering new pharmaceutical products in Pakistan. The registration process for pharmaceutical products consists of several distinct steps, including a safety and technical review and a pricing review by DRAP, as well as approval by the Prime Minister’s Office and the Federal Cabinet. International companies note that Pakistan needs a more transparent and consistent drug approval process in order to enable companies to adequately plan their timelines for manufacturing and shipping pharmaceutical products to Pakistan.
In the space of medical device, principal competitors of U.S. businesses in Pakistan are Chinese, European, Japanese, and South Korean suppliers. At times, they offer credit terms that can make it difficult for U.S. suppliers to compete on major projects or government tenders. In particular, state-owned Chinese firms are increasingly expanding into market segments traditionally dominated by Western firms.
Pakistanis generally consider U.S. goods more expensive compared to those of competitors and have a belief that U.S. firms often do not move quickly enough to meet demand. However, American products are well regarded for their perceived quality, and some U.S. firms overcome these challenges by shipping goods to Pakistan from regional operations.
Potential investors in Pakistan face many of the same challenges that exist in other developing economies such as regulatory risk and lack of transparency in public-sector decision-making. Pakistan is a diverse and challenging market, requiring adaptability and persistence. It is often difficult to sell in this market without a reliable local partner, thus choosing the right local partners and careful planning is critical to success. U.S. firms willing to invest time to develop market presence should expect to be rewarded in the long-term.
Corruption and a weak judicial system have been cited as further substantial disincentives for foreign companies. Contract enforcement can be difficult for U.S. and other foreign investors in Pakistan. Parties pursuing legal remedies in the Pakistani judicial system may face significant delays and unpredictable outcomes in the country’s overloaded courts. Lack of enforcement of the court’s rulings is also a significant problem.
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U.S. Commercial Service Contact Information
Name: Ayan Ali Khan
Position: Commercial Specialist
Email: Ayanali.khan@trade.gov
Phone: +92-51-201-4264
