Pakistan and China sign $850 million in pharmaceutical cooperation deals

The costs of Pakistan's reliance on imported medicines and vaccines are substantial. However, new Chinese investment could help end this dependency.

Landmark Agreements Signed at Islamabad Conference

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 and 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.

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, 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 approximately 85% of its finished medicines locally
• However, it imports around 95% of the API required to produce those medicines
• Dependency also extends to essential vaccines and specialized medicines

This reliance means Pakistan's healthcare system is vulnerable to global shipping delays, currency fluctuations, cuts in foreign aid, and changes in donors' priorities.

Consequences for 240 Million People

For Pakistan's population of 240 million, the impact of vaccine import dependency is enormous:

• Vaccine-preventable diseases — including measles, diphtheria, polio, and rabies — continue to affect people, especially children
• Shortages and delayed shipments force health authorities to ration doses or postpone campaigns
• Thousands of children die every year due to non-vaccination, compounded by lack of awareness and persistent vaccine shortages

These challenges highlight a long-standing weakness within Pakistan's pharmaceutical sector.

Government Reforms and Chinese Support

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

The Chinese investment and technology transfer envisaged under the recent agreements could reshape the pharma sector. This marks the first time such substantial investment pledges and private-sector collaboration are occurring with full support from both governments.

Economic Impact

Pakistan's medicine and vaccine import costs run into hundreds of millions of dollars each year. It is estimated that the annual bill for imported vaccines could reach $1.2 billion by 2030. Planned local production could help Pakistan reduce imports and save foreign exchange.

Additionally, agreements have been reached with Chinese companies to produce raw materials domestically, which would further lower medicine prices and benefit the Pakistani public.

Scope of Agreements

No other country apart from China has shown this level of interest in Pakistan's pharmaceutical sector. 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

If implemented fully, these deals could dramatically transform Pakistan's healthcare sector.

Path Forward

The agreements pave the way for local production and knowledge transfer in the coming years. As part of the deals, Chinese firms are set to:

• Establish plants in Pakistan through joint ventures
• Co-produce raw materials
• Build new industrial capacity that will also create local jobs

Many of these units are expected to be built in special economic zones being developed under the China-Pakistan Economic Corridor (CPEC).