ISLAMABAD - First-ever Drug Pricing Policy unveiled Wednesday proposes to freeze prices of drugs till June 30, 2016, at current approved level. However, hardship cases will be considered within 9 months for increase/decrease in prices to keep the drugs available in the market.  

The policy also recommends 30 per cent reduction in prices gradually in three years according to drugs prices in India and Bangladesh.

Minister of State for National Health Services, Regulations & Coordination Saira Afzal Tarar announced the policy at a press conference here. The policy board of Drug Regulatory Authority of Pakistan had finalised the policy after approval of the Economic Coordination Committee (ECC) of the Cabinet and Prime Minister.   

She said that prices of drugs shall remain frozen till 30th June, 2016, at the current approved level. Thereafter, they will be regulated by automatic price indexing based on Consumer Price Index (CPI) and open hardship option. Annual increase in prices of scheduled drugs will be restricted to 50 per cent of CPI (with a cap of 4 per cent) and of non-scheduled drugs to 70 per cent of CPI (with a cap of 6 per cent).

"For the first time a concept of price reduction upto 30 per cent on originator brands has been introduced with staggered annual reduction upto 10 percent every year if the drugs are costlier than India/ Bangladesh. This will help reduce prices of many drugs of common use for patients in the country," she said.

On the occasion, Federal Secretary Ayub Sheikh explained that drugs for human use will be divided in two categories in terms of pricing in the country. Drugs on essential medicines list, top 50 of most common use and drugs for treatment of Cancer, TB, Hepatitis, HIV, Thalassamia and Organ Transplant, biologicals and new chemical entities will be categorised as scheduled drugs and rest of the drugs will be categorised as non-scheduled.

The prices of new drugs will be fixed on the basis of average prices in India and Bangladesh and if a new drug is not available in these countries' prices shall be fixed at lowest level of the developing countries which regulate drugs prices or wholesale prices in UK, Australia and New Zealand. Prices of generics will be fixed 30 percent less than the originator brand of new drug which will provide economic option to patients in Pakistan, he informed.

The Secretary said that prices of originator brands of new drugs would be reduced after 4 years or when minimum 3 generics are available in the market, whichever is later. Total reduction shall be 10 percent every year over a period of 3 consecutive years. Prices of generis of these drugs will be reduced correspondingly and minimum price difference between prices of originator brands and generic will be maintained at 15 per cent."

According to the policy, production of lower priced drugs will be encouraged and annual increase in their prices shall be automatic subject to the condition that it does not exceed Consumer Price Index. Production of orphan drugs shall be encouraged. Export of high quality drugs to developed world shall be encouraged.

"No policy had existed in Pakistan to regulate price before. First time ever any policy has been introduced according to which reduction in prices has been accepted by the pharma industry. And they have promised to withdraw all court cases" the minister remarked.

The policy will ensure availability of drugs, transparency, predictability to help companies plan business and encourage exports, she maintained.

"This is the first comprehensive Drug Pricing Policy which has laid down a transparent mechanism for fixation and price adjustment. It will help increase availability of drugs at rational prices and discourage hoarding. It shall reduce the discretion of functionaries and facilitate the industry in predictability for business planning".

A monitoring mechanism will also be devised with the coordination of the provincial health authorities to ensure that drugs are not sold in market on prices higher than fixed prices, she said.