Pakistan, China sign $850M pharmaceutical deals to boost local production

The costs of Pakistan's reliance on imported medicines and vaccines are immense. Chinese investment could help end this dependence.

Landmark Agreements Signed

Last week, Pakistan and Chinese companies signed agreements worth $850 million at the Pakistan-China Pharmaceutical and Healthcare B2B Investment Conference in Islamabad.

Held on July 17–18, the event focused on:

• Vaccine production
• Active pharmaceutical ingredients (API)
• Medical devices
• Clinical trials
• Related pharmaceutical subsectors

The conference brought together 146 Chinese companies with approximately 220 delegates and more than 200 Pakistani firms, marking one of the largest China-Pakistan business engagements in the pharmaceutical, healthcare, and biotechnology sectors.

Key Outcomes

Federal Health Minister Mustafa Kamal announced on July 18 that 16 contracts and 80 memoranda of understanding had been finalized during the event. He described the development as a key economic milestone for bilateral cooperation in the pharmaceutical sector.

The deals signed and the scope of expected cooperation signal a clear shift toward industrial collaboration between the two countries, moving beyond the limited trade exchanges of earlier years.

Pakistan's Critical Import Dependency

Pakistan's dependence on imported vaccines and pharmaceutical inputs remains severe:

• The country administers 13 vaccines under its national immunization program — all imported
• Pakistan manufactures about 85% of its finished medicines locally
• However, it imports approximately 95% of the API required to produce them
• Dependency also extends to essential vaccines and specialized medicines

This reliance leaves Pakistan's healthcare system vulnerable to:

• Global shipping delays
• Currency fluctuations
• Cuts in foreign aid
• Changes in donors' priorities

Human and Economic Consequences

For Pakistan's 240 million people, the consequences of vaccine import dependency are enormous.

Vaccine-preventable diseases — including measles, diphtheria, polio, and rabies — continue to affect people, especially children. At times, shortages and delayed shipments force health authorities to ration doses or postpone campaigns. In other cases, thousands of children die each year simply due to non-vaccination, compounded by a lack of awareness and persistent vaccine shortages.

The economic costs are equally stark. Pakistan's annual medicine and vaccine import bill runs into hundreds of millions of dollars. It is estimated that the annual cost of imported vaccines could reach $1.2 billion by 2030.

A New Policy Direction

The government is now pursuing broader pharmaceutical reforms with Chinese support to open an industry that has remained underdeveloped for a long time.

For the first time, Pakistan has approved a National Local Vaccine Production Policy, which sets the framework for domestic vaccine manufacturing with assistance from Chinese companies. The policy aims to:

• Build local production capacity
• Strengthen health security
• Cut dependence on imported medicines and vaccines

What the Agreements Encompass

The agreements signed at the conference include:

• 2 in API manufacturing
• 8 in vaccine production
• 2 in clinical trials
• 2 in generic formulation injectables
• 8 in medical devices

This is the first time such substantial investment pledges and private-sector collaboration have occurred with full support from both governments.

Path Forward

Chinese firms are set to establish plants in Pakistan through joint ventures, co-produce raw materials, and build new industrial capacity that will also create local jobs. Many of these units are expected to be built in special economic zones under the China-Pakistan Economic Corridor (CPEC).

Agreements have also been reached to produce raw materials domestically, which would further lower medicine prices and benefit the Pakistani public.

No other country apart from China has shown this level of interest in Pakistan's pharmaceutical sector. If fully implemented, these deals could dramatically transform Pakistan's healthcare landscape — paving the way for local production, knowledge transfer, and reduced import dependency in the years ahead.