Drug margins put under scrutiny

Minister orders DRAP to tighten pricing framework, shield consumers

ISLAMABAD:

Economic Affairs Minister Ahad Cheema on Friday objected to exorbitant profit margins of dealers of up to 40% in case of essential and life-saving medicines, directing the Health Ministry to urgently revise the drug policy framework that governs the prices of medicines in Pakistan.

The Economic Affairs Ministry released a statement that sought a balance between the rights of the patients and the drug companies.

Cheema chaired a meeting that was attended by Capt (retd) Muhammad Mehmood, the newly-appointed National Health Services Secretary; and Dr Obaidullah, the Chief Executive Officer (CEO) of the Drug Regulatory Authority of Pakistan (DRAP).

Cheema "directed DRAP to examine the existing importer and retailer margins, including margins that may currently be around 40% in relevant cases, and provide for their rationalisation under the revised Hardship Rules", according to the official statement.

When contacted Health Secretary Capt (retd) Muhammad Mehmood, who is also the Housing & Works Secretary and CEO of under-construction Quaid-e-Azam International Hospital, said that it was an informal discussion and no decision was taken.

The economic affairs minister stated that where an importer was already benefiting from tax concessions or any other relief provided by the government under the Hardship Policy, the importer should also be prepared to rationalise its own margin instead of seeking to pass the entire cost on to the consumer.

The Hardship Policy covers the prices of essential and life-saving drugs in Pakistan.

Cheema stressed that the necessary adjustment should be made in importer and retailer margins. "If the government is extending relief under the Hardship Policy, the importer and retailer must also share the burden through reasonable adjustment of their margins", said the minister.

This adjustment should take place within the supply chain and must not, under any circumstances, be passed on to the consumer, he added.

The official statement underlined that Cheema directed the Health Ministry and DRAP to urgently revise the regulatory framework governing drug pricing, including changes to the Hardship Policy. He also asked to change the composition of the DRAP Policy Board, with a clear focus on protecting consumers from unjustified price increases while ensuring the availability of essential medicines.

The minister also directed that the composition of the DRAP Policy Board be strengthened by inclusion of a health economist and a public health expert on the policy board.