The recommendation came from the SBP in its recently released annual report of 2013-14.
The report said that there is a need to prioritise life-saving medicines in the list of drugs awaiting registration (and renewal of licences), so that the influx of illegal medicines can be stopped in the country.
Apart from removing anomalies in imports to protect the domestic industry and consumers, the Drug Regulatory Authority of Pakistan (DRAP) needs to effectively handle issues related to manufacturing; export; import; storage; distribution; and sale of pharmaceuticals in the country, it added.
While mentioning the problems that the pharmaceutical industry faces, the report stated that the rupee depreciation has taken its toll on the sector as it posted a 0.2% decline in fiscal year 2014, compared to a growth 6.3% in fiscal 2013 and 7% in fiscal year 2012.
Taking a similar position of the local pharmaceutical industry, the SBP report pointed out the increase in raw material prices in the first half of fiscal year 2014 following the depreciation in the rupee and delays in announcing drug pricing policy in fiscal year 2014 badly hit the industry’s growth.
The report also mentioned that the profitability of listed pharmaceutical companies presented a mixed picture in 2013. The gross profit margins of six out of nine listed companies shrunk in 2013 because of an increase in the cost of production.
DRAP woes
DRAP, which was constituted in November 2012 after the functions of the Ministry of Health were transferred to the provinces in June 2011, is an autonomous body that comes under the ambit of Ministry of Health Services Regulations and Coordination.
DRAP regulates drug prices, issue licences to manufacture drugs after verification of plants and register drugs for local manufacturing or imported medicines.
However, pricing of medicines has become a contentious issue because the drug prices are controlled by the government and a numbers of medicines are on a price-freeze since 2001.
The pharmaceutical industry is agitating and demanding an across the board revision in prices to cover the impact of rupee depreciation and the increase in taxes and power tariffs in the past many years. However, the government seems to disagree with the industry.
The formal pricing policy, however, further delayed after the fiscal devolution in June 2011.
Market observers say the pharmaceutical companies increased prices of a number of drugs unilaterally in fiscal year 2012, after the transfer of Health Ministry to the provinces.
DRAP formulated a Drug Pricing Committee (DPC) in August 2013 to review matters related to the pricing of drugs. However, just after announcing, the DPC withdrew the price increases for a number of drugs in November 2013 which irked the local industry.
The pharmaceutical companies went to Sindh High Court against the DPC’s action, which restituted DPC’s decision to increase drug prices.
“We believe an early resolution of this issue, through formulation of a formal drug pricing policy, is required to eliminate uncertainty pertaining to pricing of drugs in the country,” the report stressed.
Local pharmaceutical industry has also been demanding the government to streamline the registration of new drugs but the situation is still the same.
At present, a large number of applications are awaiting approval for registration of new drugs and the renewal of licences. The report also acknowledged that the delays in registration and licencing of drugs have resulted in the entry of illegal medicines into the market.
Published in The Express Tribune, December 15th, 2014.
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Seriously, Islamabad need to address these price issues. Lets not be late in tackling genuine issue as well a dialogue to come to a compromise. Registration of new drugs is in interest of public at large as well as renewal of old registrations, it must be treated as a formality for pharma companies.Lets put Certain back which will create confidence working in Pakistan.