Price collusion? References filed against health ministry officials, pharma firms

NAB files references against former Drug Pricing Committee head and members, eight pharma firms.

ISLAMABAD: The country’s top anti-graft body has filed a corruption reference in an accountability court against the health ministry officials for an exorbitant increase in prices of drugs illegally and benefitting some pharmaceutical companies.

According to a press release issued on Tuesday, the National Accountability Bureau (NAB) Rawalpindi region filed the reference against Arshad Farooq Faheem, former chairman of the Drugs Pricing Committee (DPC), former committee secretary Dr Muhammad Ali, and former members from Punjab, Khyber-Pakhtunkhwa, Sindh, Balochistan, Saleem Ishrat Hussain, Ayaz Ali Khan, Sabir Ali, Abdul Salam Mufti, Sultan Ahmed and Rashid Latif Sheikh, respectively.

A reference has also been filed against eight pharmaceutical companies and labs -- Maple Pharmaceuticals, Akhai Agencies, Zam Zam Corporation, Excel Health Care Labs, Saffron Pharmaceutical, Galaxy Pharma, Martin Dow -- and others in the accountability court.

According to the NAB, the officials of the Ministry of National Regulation and Health Services Division and others extended undue financial favours to eight pharmaceutical companies and labs through the pricing committee members by illegally increasing drugs prices between October 2012 and January 2013.

The eight pharmaceutical companies derived Rs1.078 billion till 30-6-2015 from the increases. One company, RG Pharmaceutica, later returned Rs385.12 million through a plea bargain.

The companies gained illegal benefits perpetually by submitting inflated invoices, incorrect and incomplete costing data and sold their drugs on increased prices.

During the process of investigation, it revealed that the pharmaceutical companies in connivance with officials submitted incomplete, incorrect and inflated invoices to Drug Regulatory Authority (DRAP) for fixation of drugs prices at exorbitant rates causing an unbearable burden on the general public. The bureau arrested Tariq Haider and Mian Khalid Mehmood, directors of RG Pharmaceutica but released them after payment of their liability through the plea bargain.

So far NAB Rawalpindi has recovered Rs385.11 million from them and the investigation against officials of national regulations and services, beneficiaries and others through plea bargain whereas reference against accused persons for the remaining wrongful gain of Rs692.96 million has been filed in an accountability court in Islamabad.

NAB has recommended in the reference that the accused persons be punished and drugs prices reduced to previous levels so that the public may benefit, as was done in the RG Pharmaceutica case.

Published in The Express Tribune, June 22^nd, 2016.