Preparedness of Nepal’s pharmaceutical sector to cope with the challenges of the country’s LDC graduation

SAWTEE implemented the project from July 2020 to November 2020. The project was funded by Third world Network Berhad. Nepal’s domestic pharmaceutical production capacity has grown over the years. However, this has been mostly in the production of off-patent generic medicines. In recent years, a few dominant firms have strengthened their capacities in producing generic versions of on-patent medicines utilizing the TRIPS flexibilities accorded to LDCs, which is encouraging. However, Nepal’s graduation from the LDC group might reverse this trend since domestic production of on-patent medicines will then not be possible without paying royalties to the innovator. Nepal’s pharmaceutical manufacturers are not prepared to compete with foreign pharmaceutical manufacturers in the production of patented medicines. 

Since the current production of on-patent medicines in Nepal is small, the inability to produce such medicines after the country’s graduation from the LDC status might not be too big in financial terms. However, given that production of generic versions of on-patent medicines by domestic manufacturers in Nepal has been for NCDs such as hypertension and diabetes, which have been the major causes of premature deaths in recent years, the impact could be felt in terms of access to these medicines. The need to pay higher prices for patented medicines thereafter will seriously undermine public health outcomes.