Pakistan

Drugs price hike: Another bitter pill in the making

Health ministry pushes for 7 per cent increase in prices of various medicines.

Rauf Klasra January 22, 2011

ISLAMABAD: People are likely to be jolted anew: the health ministry is seeking a one-time seven per cent hike in prices of various medicines as part of its new drug policy, knowledgeable sources told The Express Tribune on Friday.

A proposal has already been sent to Economic Coordination Committee (ECC) of the cabinet for formal approval.

The summary in this regard was moved by the former federal health secretary, Khushnood Lashari, just before he was shifted to the Prime Minister’s Secretariat.

Sources believe that the government might try to overcome the reluctance of ECC members despite the recent fierce public and political backlash it encountered after a recent increase in prices of oil products. The government, they say, may succumb to the pressure of a “very strong lobby of pharmaceutical industry…and persuade them to approve the proposal”.

They said that if the government delayed the decision, the multinationals would simply resort to creating artificial shortages, making it almost impossible for the government not to comply with their demands.

According to official documents available with The Express Tribune, the price hike is primarily being attributed to deterioration in the parity of Pakistani currency against the US dollar and the euro.

The ministry of industries and production has, however, raised serious objections in the matter of non-existent regulatory control over the pharmaceutical sector.

In its comments on the proposal, the ministry for industries pointed out that to-date, there was no independent authority to oversee the structural development of the pharmaceutical sector, including pricing and maintaining a level playing field for domestic and foreign manufacturers.

The health ministry also tried to justify the price hike by maintaining that no across-the-board increase had been allowed after 2001. It contended that during this period, the manufacturing cost had increased manifold because of the increase in the raw material costs and the cost of imported items had gone up because of the devaluation of rupee against the US dollar and euro.

According to the health ministry, the pharmaceutical industry had been demanding of the government to allow it to make adjustments in prices in “hardship cases” which, in their opinion, had become “necessary” to ensure the continuous availability of drugs.

The ministry also pointed out “discrepancies and disparities” in prices of drugs manufactured by domestic and multinational firms in Pakistan and across the region.

“It has, therefore, become imperative that the prices of drugs are revisited in a policy framework,” the ministry said.

The federal government, it said, had formed a board for formulating the drug policy on the orders of Prime Minister Yousaf Raza Gilani in December 2008.

The board has so far held five meetings and the ministry of health’s draft drug policy is based on the outcome of these deliberations.

The policy has been circulated among ministries of industries and production, finance, commerce and planning development division for formal consultation.

The documents also showed that the health ministry also called for increasing the price of other drugs, except for new chemical entities registered after December 2007, and expensive drugs for the treatment of hepatitis, cancer, HIV, organ transplants or whose price increase “is not justified”.

The health ministry also pointed out that the proposed increase would not be applicable on drugs whose prices have been increased under the ‘hardship category’ since January 2010.

What the ministry has proposed

1 A 20-paisa per unit increase in prices of drugs which are priced less than Rs2 per tablet/capsule

2 A 20-paisa per 1gm increase for creams, ointments and gels which are priced less than Rs2per gram

3 A 20-paisa per 5ml for syrups/suspensions or drops which are priced at less than Rs2per 5ml

4 A 40-paisa per sachet increase for drugs whose prices are less than Rs4per piece or in specialised dosage form

5 Rs1 per injection increase for injections priced less than Rs10 per ampoule

6 Rs1 per piece of medical devices which are priced below Rs10 a unit.

Published in The Express Tribune, January 22^nd, 2011.

COMMENTS (11)

Syed A. Mateen | 13 years ago | Reply The corruption in the society is mainly due to the price hike in every count. The present government has failed to deliver in view of the tall claims made by PPP government before the elections were held. The government could not increase the earning of a common man and after taking over the charge has inflated prices of every thing which includes prices of medicines. The drugs prices have already increased in the open market before the proposal was sent to ECC of the cabinet for consideration. The country is passing through a total chaos as not a single Pakistani is satisfied by the measures taken by the government. Increasing drug prices and of other commodities, utility bills are tantamount to taking back the right to live in this world. What would an average Pakistani do, except to wait the death angle to come to take back the person to his Creator.

The Only Normal Person Here. | 13 years ago | Reply So now we need to think hard and REALLY hard before we decide to get ill.

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Nadeem Ahmed | 13 years ago | Reply The medicine prices in India and China are far more cheaper than Pakistan and they use the same material to manufacture these medicines. Its pitty that Pharma companies and corrupt government offiicals have joined hands to rob Pakistani people and there is no end in sight. My personal experience regarding one medicine, Its price in Canada was one dollar per tablet, In Pakistan its price was 80 rupees per tablet (original), there was cheaper version too for half price, but its quality was not guaranteed by medical store staff and in India, its price was only 5 rupees, and there was no other version with cheaper price. Mr. Rauf Klasara shows so much courage to uncover misdeeds of some people and stangely general public turn their guns on him, instead of corrupt elements of society.

frizz | 13 years ago | Reply yup thats true pharma has hardly raised the prices of medicines in past few years, i am in ministry of health and know all so there is no need to blame rauf klasra coz he has filed the true facts.

Meekal Ahmed | 13 years ago | Reply I agree with Zuhair. If there has been no increase since 2001 any one can simply look at CPI inflation since then and also factor in exchange rate depreciation. In that light, a 7% increase is minuscule.

Sara | 13 years ago | Reply M waiting for the time like teunisia for our Rulers, when they dont get time for even to ESCAPE SAUDIA.

assad | 13 years ago | Reply @sadia plz consider the inflation rate and many other factor of that time with today...rupee dep ,petrol prices ,recession and many other factors if accounted than the rise is fair...klasra is putting up articles with no facts in it...

Zuhair | 13 years ago | Reply @ Sadia - The retail prices at pharmacies should not be confused with the one that the pharma companies charge. And the reason why the local and MNCs differ in profit margins is quality and standards. Hardly any local company manages Good Manufacturing Practices which has a huge cost associated with it - which is why the local companies shave better margins because of the sub standard products. Out of 1400 molecules, the prices of only 50 molecules have been revised upwards which does not even cover the cost of inflation.

Sadia | 13 years ago | Reply Raud Klasra has merely reported what Health Ministry has proposed; and its incorrect that prices of medicines have not risen since 2001. The pharma companies have enhanced the prices a number of times 'unofficially' and this can be verified by anyone who compares 2001 prices with what are prevalent today. The sector is supposedly a regulated one and should be regulated; however it is regulated by the Government no better than what one can witness in other sectors. Pharma companies would have wound up their operations by now had they been operating at loss for the past few years. Only foreign companies have been showing loss due to transfer pricing policies on purchase of raw materials from associated companies whereas local companies are posting fabulous profits. Anyone doubting this is advised to peruse their financial statements for 2010.

abdullah | 13 years ago | Reply very true zuhair....klasra should do some research b4 bringing up such articles ..though express tribune is now a days trying to put their credibility in question......

Zuhair | 13 years ago | Reply Can we ever have objective journalism please? Why does not a reporter of Klasra's stature do the primary research before filing a story? the pharma industry has not been granted price increase since 2001. It is a regulated industry and the drugs here are way cheaper than anywhere else in Pakistan. a 7 percent increase in drug prices will not cost the customers heavy on their pocket. If anything needs to be regulated is the treatment fee itself which the doctors charge which constitutes to 85 percent of the total medication cost.

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