Shams ul Nisa

The removal of price controls on drugs not included in the National Essential Medicines List (NEML) has created new opportunities for pharmaceutical companies, allowing them to align their pricing strategies with current market trends, reports WealthPK.

This change goes beyond regulatory adjustments and marks a significant turning point for companies like AGP, which has seen remarkable financial growth in 2024. AGP, a public limited company incorporated in May 2014, engages in the import, marketing, export, distribution and manufacturing of various pharmaceutical products. According to the financial results available with the Pakistan Stock Exchange, AGP's financial performance for the nine months ended September 30, 2024, shows a remarkable 34% revenue increase, totalling Rs13 billion.

The growth was especially notable in the third quarter, during which AGP achieved its highest quarterly sales ever, totalling Rs4.5 billion. Additionally, strong market penetration of core brands led to a 27% rise in domestic sales, while exports to Afghanistan surged by 59%. The Nutra segment also thrived, growing 55% thanks to three new product launches, enhancing AGP's product range and reducing market risk. Furthermore, the deregulation of drug prices has enabled AGP to adopt strategic pricing models tailored to individual products through thorough market research and competitive analysis.

This flexibility in pricing has helped AGP improve its gross margins, even amidst rising production and operational costs driven by escalating energy prices. As a result, the company achieved a standalone net profit of Rs1.28 billion, with earnings per share of Rs4.57, marking a 50% increase from the previous year. AGP's ability to adjust prices to market demands boosts profitability and strengthens its competitive position in a crowded market. Its focus on cost control and efficient sales strategies further support its strong financial performance.

Despite AGP's successes, it faces challenges, including rising finance costs from long-term debt and increased short-term borrowings, which have impacted profitability. However, the company remains optimistic, as Pakistan's economy shows signs of recovery, with expectations of improved exchange rates and reduced inflation. The company plans to capitalise on these favourable conditions by expanding its manufacturing capacity and product range, both domestically and internationally.

AGP's dedication to excellence has been recognised with top honours, including the first place in the Pharmaceutical Category at the 2023 Best Corporate & Sustainability Reports Awards, and recognition as a 'Top Exporter' at the 2024 Pharma Export Summit & Awards. Looking ahead, AGP is positioned for continued growth, leveraging flexible pricing strategies and expanding its product offerings. The company plans to strengthen its domestic market presence while exploring new international markets with innovative medications to meet both current and future therapeutic needs.

AGP's investments in manufacturing capacity position the company to quickly adapt to market shifts and maintain its competitive advantage. By diversifying its supplier base and emphasising local sourcing when possible, AGP aims to improve operational efficiency while upholding quality standards. As Pakistan's pharmaceutical sector evolves, AGP is at the forefront, utilising flexible pricing strategies to boost profitability and expand its market reach. Despite challenges, the company remains committed to enhancing healthcare access and quality, both locally and internationally. AGP's strategic adaptability showcases its ability to thrive in the pharmaceutical industry and underscores its commitment to excellence in healthcare solutions.

Credit: INP-WealthPk