
Deregulation boosts pharma profits by 210% YoY
Listen to article
Owing to deregulated prices, Pakistan's pharmaceutical sector witnessed a remarkable surge in profitability, posting a 210% year-on-year (YoY) increase to Rs13.5 billion in the calendar year 2024, according to data compiled by Arif Habib Limited (AHL).
The sector's net revenue increased by 21.1% YoY, reaching Rs196.8 billion, with leading contributions from AGP (+33.8% YoY), Glaxo (+23.2% YoY), and Abbott (+22.9% YoY), according to data gathered by AHL.
"This 210% (or 3.1 times) YoY growth was driven by higher sales volumes and price adjustments following deregulation of drug prices," AHL analyst Menka Kirpalani told The Express Tribune.
Gross profits also saw a significant increase of 64.9% YoY, reaching Rs68.6 billion, supported by better pricing strategies, currency stability, and lower active pharmaceutical ingredient (API) costs. Companies such as Glaxo (+339.2% YoY), Abbott (+67% YoY), and AGP (+44.4% YoY) played a key role in this expansion. The overall gross margin for the sector improved to 34.9%, with Hinoon (51.4%) and AGP (47.8%) leading the way. Net margins also increased to 6.9%, reflecting improved operational efficiency.
The demand-side impact was negligible. Demand for pharmaceuticals and medicines naturally increases as the population grows, said Kirpalani. However, the main issue for the pharmaceutical sector was that their prices were regulated. Essential medicines were subject to a price cap linked to 70% of the Consumer Price Index (CPI) and non-essential medicines to 100% of CPI, meaning companies could only increase prices up to that limit.
In February 2024, the government deregulated prices for the non-essential segment, allowing companies to adjust prices based on their own cost structures and profitability needs. As a result, gross margins improved, and volumes also increased.
Previously, some products had stalled sales due to low marginsfor instance, Panadol was temporarily unavailable because companies were unable to maintain profitability under regulated pricing. With deregulation, both margins and sales have now increased, benefiting the industry.
Despite the positive performance, finance costs grew by 4.7% YoY to Rs4.7 billion, mainly due to higher interest rates. Additionally, other income dropped by 44.4% YoY, impacting companies like Glaxo (-50.8% YoY) and Abbott (-51.6% YoY).
Among individual companies, Glaxo reported a profit of Rs6.5 billion (+12.2 times YoY) with an EPS of Rs20.52, while Abbott recorded Rs5.2 billion (+20 times YoY) with an EPS of Rs53.46. Hinoon posted Rs3.2 billion in profit (+35.4% YoY) with an EPS of Rs61.41, and AGP reported Rs2.08 billion (+75.1% YoY) with an EPS of Rs7.44. However, Searl suffered a loss of Rs3.6 billion, facing operational challenges.
Several companies, including Glaxo, Abbott, and Hinoon, announced dividends of Rs10, Rs10, and Rs40 per share, respectively, rewarding shareholders for the strong financial results.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Business Recorder
8 hours ago
- Business Recorder
Australia, NZ dollars underpinned as trade deals buff sentiment
SYDNEY: The Australian and New Zealand dollars held firm on Wednesday as news of a potential U.S. trade deal with Japan salved risk sentiment, but also lessened some of the uncertainty that has been plaguing the greenback. President Donald Trump said on Tuesday the U.S. and Japan had struck a trade deal that included a 15% tariff, below the 25% threatened, though a lack of detail limited the overall reaction. 'The deals are providing some boost to market sentiment on the grounds that worst case tariff rates have been avoided,' said Shane Oliver, chief economist at AMP. 'That said, the rates so far are way up on levels at the start of the year and still pose the threat of a significant negative impact on U.S. economic growth and global trade disruption.' The reaction in currency markets was cautious, leaving the Aussie a fraction firmer at $0.6562, having bounced 0.5% overnight as the U.S. dollar eased broadly. That put a buffer between last week's low of $0.6454 and refocused attention on the recent eight-month peak of $0.6595. The kiwi dollar held at $0.6006, after rallying almost 0.6% overnight and away from a recent trough of $0.5906. Resistance now lies around $0.6043. There was no domestic data of note, though Australia's statistician did release more details of the upcoming switch to a full monthly consumer price series that could speed up the pace of interest rate changes. Australia is one of the few developed world countries to report CPI quarterly, making it hard for policymakers to read inflation trends in a timely manner. The Reserve Bank of Australia skipped a rate cut this month in large part to wait for a reading on second quarter CPI due on July 30. The steady decision badly wrong-footed markets, an outcome that might well have been avoided if a full monthly CPI had been in place. Indeed, the RBA has a long history of waiting for quarterly CPI readings before changing rates, suggesting the start of the new series in November could accelerate the whole process. The head of the central bank, Michele Bullock, is due to speak on inflation and employment on Thursday and is likely to be asked the importance of the data shift. Markets currently imply a near 100% chance the RBA will cut the 3.85% cash rate at its next meeting in August, and lower it to 3.10% by the end of the year.


Express Tribune
9 hours ago
- Express Tribune
Did Ozzy Osbourne travel to Switzerland for assisted death? Speculation grows after singer's passing
Following the death of legendary musician Ozzy Osbourne, speculation has surfaced online suggesting he may have travelled to Switzerland to undergo assisted end-of-life care. The theory, which has gained traction on social media, remains unconfirmed, but it stems from remarks made by Sharon Osbourne in 2023 during The Osbournes podcast. At the time, she shared that both she and Ozzy had discussed turning to euthanasia should either face unbearable suffering from illness. Their preferred option, she noted, was the Dignitas clinic in Switzerland. This mention has led some to wonder whether the Black Sabbath frontman made the journey before his death. However, his daughter Kelly Osbourne has publicly denied the claim, stating that her father neither requested nor pursued euthanasia. No official cause of death has been disclosed. The Osbourne family confirmed only that Ozzy, aged 76, died peacefully and was surrounded by love. In recent years, he had battled multiple health challenges, including Parkinson's disease, complications from neck injuries, and a COVID-19 infection. Ozzy Osbourne was a pioneer of heavy metal and sold more than 100 million records during his career. From founding Black Sabbath to launching a solo career and becoming a reality TV icon, his influence reached far beyond music. He was inducted into the Rock and Roll Hall of Fame and honoured with multiple awards. While the details surrounding his death remain private, Ozzy's legacy continues to be celebrated around the world.


Business Recorder
14 hours ago
- Business Recorder
Sindh Auqaf Dept: AGP ‘uncovers' Rs423m irregularities
KARACHI: The Auditor General of Pakistan has detected serious financial irregularities totalling over Rs 423 million during audit of the Sindh Auqaf department for the financial year 2023-24, indicating a troubling pattern of fiscal mismanagement that has persisted for years. The audit report revealed that approximately Rs 75.941 million was illegally retained across various bank accounts rather than being deposited into the government treasury as required under Sindh Financial Rules 41 and 41(a). Of Rs 287.356 million collected from contracts, rent, and religious offerings known as Nazrana, the department improperly maintained over a quarter of these funds in three separate bank accounts located in Sehwan, Hyderabad, and Bhitshah branches. AGP unearths irregularities in old-age pension Despite assurances made during a Departmental Accounts Committee meeting in December 2024, where management pledged to deposit receipts by the fifth of each month, no measurable progress has been documented. This failure to comply with basic financial protocols represents a significant breach of government fiscal discipline and accountability standards, the report said. The audit findings extended beyond fund retention issues to encompass Rs 347.539 million in questionable expenditures related to maintenance, repair works, and development schemes. Auditors identified multiple procedural violations that fundamentally undermine the legitimacy of these substantial financial outlays, raising serious questions about the department's operational integrity. Critical procedural failures included the absence of mandatory pre-audit procedures for contractor payments, the department's failure to appoint a professionally qualified Divisional Accountant, and the execution of repair works without proper cost estimates, the report said. Additionally, AGP found no work completion certificates and inadequate record-keeping practices in measurement books, suggesting a systemic breakdown in financial oversight mechanisms. The financial breakdown showed that Rs 322.633 million was allocated to Public Sector Development Program original works, while Rs 24.905 million was designated for maintenance and repairs, highlighting the substantial public resources at stake in these irregularities. The audit report further indicated that similar irregularities were identified in previous years' reports for 2022-23 and 2023-24, involving a staggering combined financial impact of Rs 1.696 billion. The retention of government funds was previously reported with impacts reaching Rs 717.209 million, while construction-related irregularities had earlier involved Rs 979.027 million, establishing a clear pattern of persistent financial mismanagement within the Sindh Auqaf department. When confronted during Departmental Accounts Committee meetings held in December 2024 and January 2025, department management provided verbal assurances but consistently failed to produce the required documentation or demonstrate concrete corrective measures, the report said and added that officials claimed to have issued instructions for timely fund deposits but could not provide evidence of compliance, while management insisted that proper construction procedures were followed despite being unable to furnish supporting records within a given deadline. The audit report called for conducting thorough inquiries to determine accountability for construction irregularities, implementing robust preventive mechanisms to avert future violations, and issuing formal warnings to concerned officials for their negligence in handling public resources. Copyright Business Recorder, 2025