ECC questions DRAP over pricing policies

The Economic Coordination Committee (ECC) has criticised the Drug Regulatory Authority of Pakistan (DRAP) for its lack of robust technical analysis in proposing drug price increases, raising serious concerns about the existing mechanism for determining drug prices. Sources told The Express Tribune that the ECC discussed a proposal to increase the prices of 262 medicines in a recent meeting, prompting a call for a comprehensive review of the drug pricing methodology.

Sources said that economic managers scrutinised DRAP’s poor performance and have instructed the Ministry of National Health Services, Regulations, and Coordination (MNHSR&C) to conduct a holistic review of the price determination methodology provided in the Drug Pricing Policy of 2018. The ECC highlighted the need for consultation with relevant stakeholders, including provinces, and a subsequent report submission to the ECC for consideration. Additionally, the ECC has directed the MNHSR&C to analyse the strengths and weaknesses of DRAP, exploring the possibility of separating its regulatory and administrative functions to propose fundamental reforms.

During the ECC meeting, members expressed dissatisfaction with the DRAP’s inability to provide professional and convincing recommendations, highlighting a lack of robust technical analysis for the proposed price increase of 262 medicines. Observations were made that the proposal lacked clarity, and concerns were raised about the potential burden on economically disadvantaged patients. The ECC stressed the urgency of reviewing the drug pricing methodology outlined in the Drug Pricing Policy of 2018.

According to sources within the health ministry, the MNHSR&C submitted a proposal for increasing Maximum Retail Prices (MRPs) of 262 drugs categorised under hardship. These recommendations were made by the Drug Pricing Committee (DPC) during its 56th and 57th meetings held in June and July 2023. The ECC had directed the MNHSR&C to conduct a detailed analysis of the DPC's recommendations and present clear recommendations by November 21, 2023, for ECC consideration.

Furthermore, the ECC instructed the MNHSR&C to meet with Provincial Health Ministers to gather their viewpoints on the DPC recommendations. Subsequently, the MNHSR&C reviewed the DPC recommendations through a committee, assessing them under the provisions of paragraph 9 of the Drug Pricing Policy-2018. The committee determined that the cases of the 262 drugs fell under the hardship category, as defined in paragraph 9.

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It was found that DPC recommendations adhered to the defined parameters, and the committee rejected cases not meeting policy criteria. Calculations of MRPs for these drugs by the DPC were in line with the formulae provided in the Drug Pricing Policy-2018, and the DPC did not recommend any MRP beyond the calculated/allowed price under the formula.

While massive increases were proposed for some drugs, it was discovered that these drugs were not marketed by pharmaceutical companies due to higher import costs than the approved MRP by the federal government. A meeting with Provincial Health Ministers was held on November 16, 2023, under the chairmanship of Dr Nadeem Jan, Federal Minister for MNHSR&C. Health Ministers from Khyber-Pakhtunkhwa and Balochistan expressed concerns about the unavailability of common-use medicines, attributing it to non-viable prices. They agreed to the proposed increase in MRPs for 262 drugs under the hardship category.

A market survey in provincial capitals revealed that many drugs were either not freely available or entirely absent from the market. Additionally, certain drugs were being sold on the black market at prices higher than the approved MRP. The MNHSR&C highlighted that the last notification for increased MRPs of eight drugs under the hardship category was issued in September 2021. The revised MRPs for the 262 drugs will be applicable prospectively.

While the MNHSR&C acknowledged that the DPC’s recommendations aligned with policy parameters, concerns were raised about the adverse impact on the economically vulnerable due to proposed MRPs amid prevailing inflationary pressures. The recommendations of the DPC in its 56th and 57th meetings regarding increased MRPs for 262 drugs under the hardship category are now being submitted for consideration by the ECC.

Published in The Express Tribune, December 20^th, 2023.

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