Industry woes: Drug shortage feared as consignments stuck at ports

Raw material imported not being cleared by Customs

LAHORE:

The pharmaceutical industry is finding it difficult to continue the production of some life-saving drugs, as the raw material required for the process is not being cleared by Customs on different pretexts.

In the absence of a clear drug-pricing policy, the industry is already fighting for survival but still produces life-saving drugs on a no-profit basis to benefit the patients, said officials of the pharmaceutical industry.

“Now, the Customs is trying to further complicate the matter as they have held the raw material for drug manufacturing for both local and foreign firms at ports for investigation on the basis of prices, a task which they are unable to perform for many other imports,” he added.

“The authorities should know that all raw material used in pharmaceutical manufacturing are approved by the Drug Regulatory Authority of Pakistan (DRAP) at the time of registration after thorough investigation of prices and quality of raw materials to be used for drug manufacturing,” the official added.

He said the source and prices for the raw materials are disclosed to DRAP before the regulated selling prices are fixed by the authority and any change in the source of raw materials have to be cleared through stability trials which take nine to 12 months’ time after which the new source is communicated to DRAP.

“The pharmaceutical companies consider many factors in the import of raw materials and do not select the sources on the basis of cost alone,” he added, saying that many pharmaceutical companies imported raw materials from approved sources including the Federal and Drug Administration of the United States, the European Union, and the World Health Organisation. “So, this confiscation of consignments on suspicion of over-invoicing and mis-declaration is only hampering the timely production of drugs,” he added.

“It is strange that the authorities have started intervening in the production of medicines in the country instead of checking with the DRAP about the procedures. This is a unique case when two authorities of the country are at cross-purposes,” he added.

“The customs authorities have accused pharmaceutical players of evading taxes through this import and they have completely failed to understand the realities and procedures in this regard,” added the official.

“We have raised the issue in a meeting with the Customs in December 2013 and it was agreed that to avoid transfer pricing the importer should submit the invoice of exporting company to verify the prices,” said Dr Kaiser Waheed, former chairman of Pakistan Pharmaceutical Manufacturers Association (PPMA). “The companies are submitting evidence of exporter’s invoice as per the agreed procedure but Customs are refusing and delaying the consignment,” Waheed said.

Published in The Express Tribune, October 1^st, 2014.

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