Business Research

Methods

Term Report

SHRINKING MARKET OF
HERBAL PHARMACOPOEIA
MEDICINES IN PAKISTAN

Submitted to

Professor Akhtar Ehsan Mirza

Submitted by

Syed Asad Mehmood (MEN-2200475)

Mohammed Furqanuddin (MEN-2200462)

Qazi Noman Imtiaz (MEN-2200471)

 TABLE OF CONTENTS

1. Preface …
1
2. Problem: Shrinking Market of Herbal Pharmacopoeia
Medicines in Pakistan
… 2
3. Unani Tibb an overview
… 3
4. Status of Unani Tibbi Medicines Practices and Medicines
in Pakistan… 3
5. Causes of market shrinkage
… 5
a. Current Status of Unani Tibb
… 5
i. Rivalry Factor
… 5
ii. Role of Herbal Medicine manufacture
… 5
iii. Role of Quacks
…6
iv. Spurious medicines
… 6
v. Herbal medicines not always safe
… 6
vi. Counterfeit Medicines
… 6
b. Marketing Practices
… 7
i. Selling Tactics
… 7
ii. Competition Avoiding Tactics
… 7
c. Lack of Intuitive Research and development
activities. … 7
i. Backward packaging style
… 7
ii. Lack of Market Development oriented
research … 8

ii
 iii. No Technological Improvement
… 8
d. Role of Regulatory Bodies
…8
i. Ineffective enforcement of relevant
legislation …8
ii. Lesser coordination between regulator and
Manufacturers
…8
iii. Lesser role of ministry of health
…9
6. The way forward
…9
a. Manufacturers Responsibilities
… 9
b. Authorities Responsibilities
…10
7. Conclusion …
10
8. Bibliography …
13
9. Acknowledgement
… 14

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 PREFACE

In this report, we try to evaluate the under discussion issue in

the perspective of modern days businesses hyper competition
that forces to businesses to thinned its margins considerably.
That also shows the clear power shifting to customers, who
are increasingly telling companies what product features they
want, what communications they will tolerate, what incentives
they expect, and what prices they will pay.

This research report is by method a Causal-Comparative

study, in which we have identified an effect that is
“Shrinkage of Herbal Pharmacopoeia Medicines Market
Size” and dig out possible causes. We have tried our best
possible efforts to explore, and discuss cause-effect
relationships.

In preparation of subject research report, we have conducted

survey of Medicines wholesaler and retailers of Nazimabad,
Joriabazar, and Liaqatabad, and representatives of Herbal
Medicines manufacturers in order to get the reliable
information; hence these peoples are our source of primary
data.

In preparation of that report, we want to give special

acknowledgement to our course facilitator Professor Akhtar
Ehsan Mirza, who had a great influence on our thinking
towards subject of Business Research.

Syed Asad Mehmood

MEN-2200475

Mohammed Furqanuddin
MEN-2200462
Qazi Noman Imtiaz
MEN-2200471

Problem : Shrinking Market of Herbal Medicine in

Pakistan

Over the year we have witnessed a great worldwide revival of

interest in the use of herbal medicines both in developed as
well as developing countries, according to WHO, 80% of the
world population rely chiefly on plant based traditional
medicines specially for their primary health care needs. The
international scenario is:
America: Herbal medicines continue to grow enormously
over the years and continue to be a major market in US
pharmacies and constitute a multi billion dollar industry
selling approximately 1500 botanicals and dietary
supplements or ethnic traditional medicines.
United Kingdom: Sale of herbal medicines in the UK
increased at the ratio of 5% per since 1990.
Germany: Over 70% of German physicians either prescribes
medicinal herbs or refer their patients to traditional
practitioners.
China: Herbal medicines represented 33.10% of the total
drug market in 2000s.
Japan: Herbal medicines constituting about 4% of the total
market for pharmaceutical products in 2000s.
India: 70% population is reported using traditional medicine
for primary health care.

Although in Pakistan situation is not so worsen for whole

herbal medicines market, but for pharmacopoeia medicines
(Hamdard Pharmacopeia of Eastern Medicines lists 186 single
vegetable drugs used exclusively as unani medicines in

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various forms i.e. majons, khamiras, jawarish, oils, arqiat,
syrups etc) situation is alarming. As per our survey, the sale
trend of 10 major dawakhanas (herbal medicine
manufactures) are on decline side year-by-year.

The Market shrinkage of Herbal Products (Pharmacopoeia

Medicines – Majons, Khamiras, Syrups) is evident from the fact
that, both major players of the market are comprehensively
on middle men disposal, which market player gave them
better financial incentive middle men sell their products. Both
manufacturers are year-by-year deploying and employing
Trade (Middle Man) Beneficial Marketing Strategies.

Intermediaries focus strategy pushing end-user/consumer

away from manufacturers. Companies at market decline
stages use to ask consumers what benefits they would like
added to the product, that benefits could be added at any
level, it will particularly proved useful at Augmented and
Potential product levels

Major manufacturers are keen to avoid competition, because

it is very well understood that, any effort to reduce the share
of competitor, will lead towards further shrinkage of the
market. They are happy and well satisfied with cold war like
strategies. Unavailability of ideal and healthy competition
further leading the whole market towards the decline,
because competition produces a continuous round of new
product attributes. If a new attributes succeeds, competitors
soon follow and then offer it.

Unani Tibbi an overview

From centuries, man has used self-coined traditional means

for treating for ailments, and continues to use them along side
modern medicine even today. Despite all the marvelous
advancements in modern medicine, traditional medicine has
always been practiced. Traditional medicine refers to health
practices, approaches, knowledge and beliefs incorporating
plant-, animal- and mineral-based medicines, spiritual
therapies, manual techniques and exercises, applied singly or
in combination to treat, diagnose and prevent illnesses or
maintain well-being.

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The herbal or ‘Unani’ or Greco–arab system of medicine is a
growing industry worldwide. Global sales of herbal products
now exceed a staggering US$40 billion a year. Pakistan has a
very rich tradition in the use of medicinal plants for the
treatment of various ailments, based predominantly on the
Unani system of medicine, which dates back to the Indus
valley civilization.

Status of Unani Medicinal practitioners and Medicines

in Pakistan

Pakistan has current population of 162 million growing at a

rate of over 2% per annum making it the fifth largest country
in the world. With the low literacy rate of around 30% and with
over one-third of the population falling below the official
poverty line it is not surprising that Pakistan has one of the
highest infant mortality rates in the world. The life expectancy
at birth is around 63 years. Fortunately, the economic
recovery in Pakistan is robust with around 6% real GDP growth
and per capita income of around $2,200 [CIA World Factbook].
The annual GDP of Pakistan stands at around $370B of which
less than one billion is spent on pharmaceutical purchases
(not included traditional medicines) that account for
expenditure of less than one-third of one percent of GDP, one
of the lowest in the world. This is contrasted with the highest
expenditure made in the US where full 2.5% of GDP goes
toward pharmaceutical purchases (around $300B). The
average per capita yearly expenditure in Pakistan is around
$5.50 or Rs. 350/yr. However, these numbers could not be
extrapolated as generalized because of the great dichotomy
in the distribution of per capita GDP, high cost of treatment of
diseases in the poverty-ridden populations, irrational
prescribing trends, etc., As a result, even though the total
expenditure on drugs is not large, the affordability of safe and
effective medications remains one of the most serious
problems facing the country.

In addition to other Complementary and Alternative Medicines

systems such as Ayurvedic and homeopathic, the Unani
system has been accepted and integrated into the national
health system. Pakistan is the only country in the eastern

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Mediterranean region where formal Unani teaching institutions
are recognized. There has been significant movement at the
policy level in terms of CAM regulation. There are 45000
traditional healers, of who about three-quarters are practicing
in rural areas. The presence of these practitioners in rural
areas may be regarded as a source of health care delivery for
the rural majority of Pakistan. Approximately 52600 registered
Unani Medicnial practitioners are practicing in both the public
and private sector in urban and rural areas. About 360 tibb
dispensaries and clinics provide free medication to the public
under the control of the health departments of provincial
governments.

In Pakistan, over half the population (66%) lives in the rural

part of the country. Poverty, compounded by illiteracy, low
status of women, and inadequate water and sanitation
facilities, has had a deep impact on health indicators. Limited
knowledge of health and disease, cultural and household
remedies, perceptions of a health service and provider and
social barriers, and the cost related to the provision of an
effective health service have been the major barriers.

The health care system in Pakistan has two main divisions: the
public domain and the private domain. The public sector,
which is regulated and recognized but mainly composed of an
allopathic system of health care, is severely under-utilized due
to certain weaknesses including insufficient focus on
prevention and promotion of health, excessive centralization
of management, political interference, lack of openness, weak
human resource development, lack of integration and lack of
a public health policy. In the private sector, there are very few
accredited outlets and hospitals, but many unregulated
hospitals, medical general practitioners, homeopaths,
hakeems, traditional/spiritual healers, Unani (Greco–arab)
healers, herbalists, bonesetters and quacks.

In Pakistan herbal medicines are fall in following overlapping

categories, which established by Drug Regulatory Authorities:

1. Non-Essential Drugs, all those molecules that do not

fall under the WHO Essential Drugs List. A price

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 control mechanism for these drugs will be based on
competition wherein a substantial price reduction
will be required upon expiry of patents on new
molecular entity.
2. Medicines that do not require a prescription— (it is
important to know that being it does not mean a
medicine is safe or its price uncontrolled)
3. Medicines which are best taken out of drugs
category registration such as food supplements,
vitamins and other such products. Unnecessarily
classifying non-drugs as drugs allows drug
companies to promote them through professional
means.

Causes of Market Shrinkage

a. Current Status of Unani Tibb

i) Rivalry Factor: The relationship between

the conventional allopathic physician and
the Unani Tibb practitioners is of rivalry
and animosity, just as happens in any other
part of the world. Orthodox medicine has
never been in favor of traditional
medicines, these practices are denounced
vigorously by restricting their access,
labeling them as antiscientific and
imposing penalties on their practice. Some
understandable factor for this rejection
includes lack of education, training,
regulation and the evidence base of Unani
practitioners.

Strong, sophisticated, research based and

pin-pointed (Segmented) marketing efforts
of national and multinational
pharmaceutical firms slowly pushes the
market of herbal medicines into declining
stage and gradually decreasing the total
need level for Herbal Products

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ii) Role of herbal medicine
manufacturers: The part of herbal
medicine manufacture in revitalization of
unani tibb is very limited. From past
several years major herbal medicines
manufacturers are not doing enough to
improve the status of “Unani Tibb”, and
“Unani Tibb Practitioners” in order to
develop them as a strategic business
partner, as various Multinational and
National Pharmaceuticals firms doing with
allopathic physicians, they supports closely
associated profession to support their
business.

Herbal medicine manufactures, due to the

nature of business, usage of brand building
tools are restricted then other business.
They cannot openly publicize pure unani
pharmacopoeia medicines, the channel
they are forced to use to expand of
maintain the size of market is only and only
the practitioners that is the true and most
important significance of herbal
practitioners.

iii) Role of Quacks: Due to unavailability of

proper check and balance mechanism,
Quacks are openly playing with lives of
innocent peoples in suburban and rural
areas of Pakistan, and giving unani tibbb
practitioners a bad name and lowering
respect for them and their medicines in the
community.

iv) Spurious medicines: A massive influx of

spurious / unregistered medicines in the
market with lustful advertisement is
another major reason which is giving bad
name to Unani Tibb and its medicines.
These drugs are also building the wrong
(Only specialized in sex oriented

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 medicines) perception about Unani Tibb
amongst the mind of consumers.

v) Herbal medicines not always safe:

There is a general belief amongst the
consumers that the herbal medicines are
always safe, because they are natural but
evidence suggests some medicines like
kushtas, syrups, majons can create health
hazards and developed side effects,
reactions if not properly produced or
prescribed.

vi) Counterfeit Medicines: These medicines

are produced with out following safety and
pharmacopeias standard and then
deliberately and fraudulently mislabeled
with respect to identity and/or source. It
may contain wrong active ingredients,
wrong amounts of the ingredients or no
active ingredients at all. These medicines
can cause death or disability as result.
There are gaps in the herbal medicines
trade cycle from the manufacturer to
wholesalers, distributors and retailers and
then to end users, which give the way to
slip in or to proliferate, counterfeit
medicines. Particularly, in the case of
herbal medicines, counterfeit medicines
emerging as a dilemma, which is
threatening the leading manufacturers’
reputation.

a. Marketing Practices

i) Selling Tactics: As we discussed earlier

major players of market are strongly
emphasizing on selling tactics, not
pursuing brand-building and consumer
oriented measures even though they are
dragging their products into FMCGs
products category. It’s quite clear that, in

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 the selling tactics they are using, every
thing for intermediaries and nothing for
end users (Customers). Herbal medicines
manufactures are utilizing their resources
and to some extend succeeded to convert
some of their very herbal medicines into
more like FMCGs (Fast moving consumer
goods), the best examples of these star
products are ROOH AFZA, CINKARA,
GAISTOFIL, CARMNIA, and JOHAR
JOSHANDA, i.e. Medicines that can be taken
with out prescription for primary health
care needs.

ii) Competition Avoiding Tactics: As we

mentioned earlier, there is no idle
competition exists between major
manufactures, consumer are least
concerned with brand or name of
manufacturers, their buying decision is
totally based on availability of product no
matter who produced it. Due to that factor,
manufacturers are free to enhance prices,
which will lead to a chain reaction; “one-
after-other”, vice versa prices will hardly
vary manufacturer-to-manufacturer. It
makes the fact proven here that; the most
effective price control mechanism is indeed
a healthy competition.

Our study suggest that, whenever, due to

the increase in cost of doing business,
manufacturer force to rise price, they loss
substantial part of their consumer-ship.

b. Lack of Intuitive Research and development

activities

i) Backward packaging style: From past

several years Major manufacturers of
herbal products have not undertaken any
significant intuitive product development

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 process. Lack of market development
oriented research is shows from the SKU’s
(Stock Keeping Units) outlook and style
that remains more or less as it was 20-30
years back.

ii) Lack of Market Development oriented

research: There is a lack of Market
Development oriented research, both
market players strongly focusing on
segments like Lower Middles class and
nonprofessional’s class, with deep
emphasis on intermediaries based
marketing planning.

iii) No Technological Improvement: One of

the most dramatic force shaping people
lives is technology that released wonders.
Every new technology is a force for
“creative destruction” for others; the
vibrant movement of western
pharmaceutical industry hurt the herbal
medicine industry, like many old industries
herbal medicine manufacturer striving very
hard to survive. They are not involving any
significant technology based innovation in
order to improve their portfolio of brands.

c. Role of Regulatory bodies

i) Ineffective enforcement of relevant

legislation: Presently, the drug regulation
finds a place in the Concurrent Legislative
List Section 20 given in the further
schedule of the 1973 Constitution of
Islamic Republic of Pakistan. In exercise of
powers conferred upon the Federal
Government by the aforesaid provision of
Constitution, and Act entitled “Drugs Act,
1976” was promulgated to regulate the
import, export, manufacture, storage,

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 distribution and sale of drugs. The mission
of the regulatory bodies, should be “To
protect and promote public health by
ensuring equitable access to safe,
efficacious, quality and affordable
medicines and other selected health
products and their rational use through
implementation of available regulation and
effective enforcement of relevant
legislation.”

ii) Lesser coordination between

regulator and manufacturers:
Although, the government of Pakistan has
in place a number of organizations and
initiatives aimed at strengthening and
coordinating various aspects of the
Alternative Medicines Sector,
supplemented by non-government and
private sector initiatives. However,
stronger coordination of the sector at the
national level under a strategic plan is
imperative, which will produce offshoots
into research and development.

iii) Lesser role of ministry of health. Much

has been said and even some has been
done to take herbal medicines under the
full fledge control of Ministry of Health,
unfortunately, this has not materialized
because of multitude of factors, mostly
political but also scientific such as the
means of definitive testing of these
products. When the health of majority of
Pakistanis is at stake, it is unconscionable
not to take herbal medicines into full
control.

There are so many gray and lacunas areas

in the regulations which are availed by the
fake herbal medicines producers, sellers

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 and Quacks to escape from the grip of law
under the thirst of money.

The way forward

a. Manufactures responsibilities

i) There is a definite need to design training

and capacity-building and supportive
programs for the unani practitioners who
need such continuing education, hence
bringing them into the mainstream and
elevating their status in society, that
programs should be supported by the
Government and sponsored by the herbal
manufacturers.

ii) Effective and systematic marketing and

public awareness campaigns are needed to
support the base i.e. unani tibb, its system
of healing.

iii) The medicines are being used have not

been thoroughly researched, and by and
large there is only evidence from 100-50
years old documents, therefore, more
financial allocation towards the research
and product improvement and
development required.

b. Authorities
Responsibilities

i) The state regulatory authorities have crucial

role to play in this scenario, in terms of
recognition of unani tibb, financing and
appreciating training and research in the filed.

ii) A positive interaction between all cadres of

health providers, academicians, policy

12
 makers, and researchers has to be
harnessed to work for a common goal.

iii) The inclusion of some introductory modules

of unani tibb into the medical curriculum of
allopathic medical schools should be
considered.

iv) Close monitoring of the medicines

distribution channels are needed and
various law enforcing agencies can play a
pivotal role. Stricter penalties and laws
must impose on those who found
convicted. All the data about sale or
purchase of the medicines are properly
monitored and medicine supply chain must
be transparent.

v) Consumer education is also important

and the public should know basic way of
identifying the quarks, spurious and
counterfeit medicines. The Ministry of
Health should start the campaigns,
continuing education, and refresher
courses for those who are involved in the
medicine trade with the help of herbal
medicines manufactures.

Conclusion

The unani tibb and its pharmacopeias medicines is an

important source of health care, business activities, it is the
responsibility of herbal medicines manufacturing firms to
make some extra efforts, by involving more finance in
technological research and development expenditure and
participating and implementing standards and codes of
practice for the industry, in order to avoid the decline stage
pharmacopeias medicines market.

It is also the responsibility of government to provide relaxation

to herbal medicine manufacturers so that they can stand
firmly on their feet in order to gain strength and promote their

13
potentials to compete generally in local market and
particularly in international market in the wake of WTO regime
to bring more foreign exchange.

The revitalization of herbal pharmacopeias medicines is purely

in the interest of poor patients who need cheep and their very
own source of treatment. Effective utilization of these
medicines will enhance the health of nation; unani tibb has
the potential to provide more employment opportunities.

14
 BIBLIOGRAPHY (SECONDARY DATA)

Philip Kotler. Marketing Review Article Pakistan J.

Management: 11th ed., Med. Res. Vol. 43 No.4,
Prentice-Hall of India 2004
2002 Inamul Haq. Safety of
medicinal plants

IN THE SUPREME COURT Babar T. Shaikh and

OF PAKISTAN (Appellate Juanita Hatcher :
Jurisdiction) Criminal Complementary and
Misc. Application No. Alternative Medicine in
_______/2006 Pakistan:
In Criminal Misc. Prospects and Limitations
Application No. 66 of Health Systems Division
2006 Written reply on and Community Health
behalf of Secretary Sciences Research
Health, Ministry of Health, Development Office,
Islamabad. Department of
Community Health
Sciences, Aga Khan
University, Karachi,
Pakistan
A Framework for Drug
Regulatory Authority Financial Reports of three
Submitted to major herbal medicines
Ministry of Health manufacturer
Government of Pakistan
By Sarfaraz K. Niazi,
Ph.D. Consultant to the
Ministry of Health, Marketing Research
Government of Pakistan Reports

15
 ACKNOWLEDGMENT (PRIMARY SOURCES)

1. Mr. Naseeumuddin of Naseem Store, Nazimabad

Karachi.
2. Mr. Haseeb Taqi of Taqi & Sons, Jodia Bazar, Karachi.
3. Mr. Hakeem Shakeel Ahmed, Liaqabatabad, Karachi.
4. Mr. Jameel Akhtar (Managers Sales Planning, Hamdard)
5. Mr. Asif Ali Zaidi (Manager Accounts, Hamdard)
6. Mr. Noman Rizvi (Coordinator Matab Sale, Qarshi)

3
The assignments perform by the group members:

Primary Data Collection through interview and questioners, by

Mr. Asad Mehmood and Mr. Furqanuddin, Secondary data
collected by Mr. Qazi Noman Imtiaz. Report formatting,
compiling, and proof reading is done by Mr. Asad Mehmood.

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