Labeling the situation a consequence of "extreme state neglect," the Association of Pharmaceutical Producers of Nepal (APON) confirmed that three major domestic manufacturers—Unimed, Sumed, and Vijay Pharm—have completely halted production. Furthermore, 50 out of the 84 registered drug industries in Nepal are now categorized as "sick" and face imminent closure.
APON President Biplav Adhikari formally presented the industry's grievances to the Minister for Industry, Commerce and Supplies, Gauri Kumari Khatri on Tuesday, May 26, warning that the crisis could ripple into a major banking failure. Over 60% (Rs 24 billion) of the sector’s total investments are backed by bank loans, which are now at risk of defaulting.
Adhikari said one of the key factors driving the crisis is Unimplemented Policies. A historic 2074 BS government had planned to ban the import of 30 types of medicines for which Nepal is entirely self-reliant. However, the plan was quietly shelved due to pressure from foreign importers.
Similarly, state procurement neglect is another factor. The government bypasses domestic drugs in its state purchasing, failing to prioritize local brands even within its own national health insurance program.
Moreover, our tax structure heavily favors foreign competitors. Ready-made foreign drug imports enjoy low customs duties, while domestic producers are penalized with high customs duties and VAT on imported raw materials, packaging, and machinery.
Prescription trends & red tape is another reason for the crisis. Local industries complain that doctors overwhelmingly favor foreign brands despite domestic medicines meeting international standards. Bureaucratic hurdles from licensing to production further stifle growth.
Though local manufacturers possess the capacity to fulfill 80% of Nepal's total medicine demand, they are currently restricted to running at just 30% to 40% capacity.
APON has stressed that the industry does not require financial grants or donations. Instead, manufacturers are demanding a fair playing field, urging the government to restrict the import of self-sufficient drugs and mandate domestic products in state procurement to save thousands of jobs and secure national drug self-reliance.
