The existence of the domestic pharmaceutical industry is in crisis

Nepal Health News, Chitwan: The domestic pharmaceutical industry in Nepal is facing a severe crisis due to the lack of price adjustment for medicines over the past 17 years. Local pharmaceutical companies are struggling to manage rising production costs, while the growing presence of imported medicines has placed intense pressure on domestic manufacturers. According to former president of the Nepal Pharmaceutical Manufacturers Association, Jinarayan Bahadur Kshetri, the prices of more than 30 types of medicines have remained unchanged since 2008 (B.S. 2065).

While prices of locally produced medicines are kept low, imported medicines—particularly from India—are sold at significantly higher prices. This disparity has severely impacted the profit margins of domestic manufacturers, Kshetri said. For example, locally produced paracetamol is sold at just NPR 1 per tablet, while imported alternatives are sold at higher prices. Similarly, the price of Jeevan Jal (oral rehydration solution) is NPR 10 per packet, which is well below its production cost.

The cost of raw materials, packaging, and labor has risen sharply for the pharmaceutical industry, alongside an increase in the exchange rate of the dollar and interest rates. As a result, manufacturers are forced to sell their products below production cost.

Unlike India, where medicine prices are revised periodically, Nepal has seen no such adjustments, further worsening the situation, Kshetri added. A few years ago, the government attempted to restrict the import of 30 types of medicines, but the effort was unsuccessful.

According to Mahesh Pradhan, current president of the Nepal Pharmaceutical Manufacturers Association, the situation threatens the long-term survival of the industry. Some pharmaceutical companies have already shut down, while others are operating at half their production capacity. He noted that domestic products once held a 50% share in the market, but that share is steadily declining.

Nepal’s pharmaceutical industry produces medicines in accordance with World Health Organization (WHO) standards and is capable of competing in terms of quality with international products. However, the government has failed to take any substantial steps to support and promote the sector.

Pradhan further stated that while foreign pharmaceutical companies receive government subsidies when entering Nepal, no such support is available for domestic companies. He added that local manufacturers are ready to produce even the most affordable medicines currently manufactured in India, but the government has yet to pay adequate attention.

Repeated efforts to engage with the relevant ministries have failed to yield any meaningful response. Industry leaders warn that if immediate corrective measures are not taken, the future of Nepal’s domestic pharmaceutical industry could be in jeopardy.