The government has increased the prices of medicines, saying their rates are still the lowest in the neighborhood. Pakistan faced shortage of medicines due to high cost of raw material that forced manufacturers to stop production.
The government fulfilled a major demand of pharmaceutical companies in Pakistan by increasing the rates of essential lifesaving drugs to ensure their market availability amid a rapid depreciation of national currency against the US dollar.
The country has been facing an acute shortage of medicines for about a year, as their manufacturers decided to stop their production due to the rising cost of raw material in the international market, further exacerbated by the devaluation of Pakistani rupee.
The Economic Coordination Committee (ECC) of the Cabinet considered a summary from the Ministry of National Health Services, Regulations and Coordination and allowed the fixation of Maximum Retail Prices (MRPs) of 18 new drugs as recommended by the Drug Pricing Committee (DPC).
The committee also approved an increase in the prices of paracetamol products. It also reduced the prices of another 20 drugs. An official of the ministry said these medicines are for treatment of typhoid, malaria, depression, fever, kidney diseases, infertility, tuberculosis and ulcer.
Pharmaceutical companies wrote a letter urging the government to increase the prices of medicines in Pakistan due to the rising inflation and significant rupee depreciation in the country.
The medicinal companies called the government to adjust the maximum retail prices of medicines according to inflation. They also indicated that failure to make such adjustments could lead to the collapse of the domestic pharmaceutical industry in Pakistan.
Every company sent a separate letter to the relevant authority. Around 70 companies wrote letters to the leadership to communicate their grievances and nearly 300 letters reached the government.
The companies reminded the government officials that the abundant availability of medicines in Pakistan was dependent on the uninterrupted import of raw material. However, the pharmaceutical industry had suffered significantly due to the outbreak of COVID-19.
The pandemic led to an exponential increase in the prices of pharmaceutical ingredients including the raw materials used in drug manufacturing in the international markets.
Eighty percent of the raw material for the manufacturing of pharmaceuticals is imported. The persistent exchange rate fluctuations has created a situation wherein the pharmaceutical companies cannot sustain their operations in Pakistan. The imposition of duties and tariffs on imported raw material have compounded the problem.
The cost of fuel, electricity, freight charges and packing material also witnessed unprecedented increase. Simultaneously, the rupee devalued against the US dollar.
The production of pharmaceuticals in Pakistan requires significant energy. Boilers and chillers need to operate on a massive scale to ensure the smooth manufacturing of pharmaceuticals. However, the energy costs have risen beyond sustainable levels.
This means that many pharmaceutical companies will cease their operations in Pakistan. The collapse of the pharmaceutical sector could result in the non-availability of medicines to the patients and the public at large, the companies cautioned the government.
The consequential unavailability of medicines could inevitably trigger a national health emergency. Health professionals were concerned about the potential scarcity of medicine.
To ensure the smooth availability and accessibility of medicines in the country, the only apparent solution was to increase the prices of medicines available in the market. The government could not sustain the pharmaceutical industry from its own pockets. The only possible solutions were deregulation and price adjustments according to inflation and rupee devaluation.
Due to the uncertain economic situation, it had become entirely unsustainable for firms to manufacture and ensure the availability of medicines. The pharmaceutical companies had reached a consensus that they would not be able to continue production if they were not allowed to increase prices.
