LAHORE - In the wake of withdrawal of increase in prices of drugs, pharmaceutical companies fear stoppage of manufacturing due to high exchange rate, inflated prices of inputs and utilities.

Some manufacturers, however, dispelled ‘any difficulty’ in continuing business, saying hefty increase for brands was uncalled for and withdrawal of the decision was a step in the right direction.

Drug Regulatory Authority of Pakistan (DRAP) had allowed 9 percent increase in medicine prices in January. Considerable increase in prices of 625 important drugs caused public uproar that ultimately led to removal of Minister for National Health Services and Regulations Amer Kiyani. After assuming charge as Special Assistant to Prime Minister on Health, Dr Zafar Mirza announced the withdrawal. He hoped that the decision would help saving consumers more than Rs7 billion annually. The Health Ministry has given May 20 deadline to the pharmaceutical companies to decrease prices. After the given date, the cases will be forwarded to drug courts.

Price focused strategy will result in discontinuation of production of low priced drugs, putting enormous burden on low income segment of society, said executive of a pharmaceutical company.

“Pakistan has one of the harshest drug price control regime in the world as all 1400 molecules are determined by price determination factor.

Government has set 20th as deadline for pharmaceutical companies to decrease prices

“In India price of only 124 products is controlled out of 1,400. In Bangladesh, number is only 92. And the rest of the products are left for market forces to decide,” he said.

Besides, he added, price of medicines is bench marked with India and Bangladesh to ensure prices do not exceed Saarc region in apple to apple comparison.

And local pharmaceutical industry has continued to agree on regional benchmarking of price in this difficult situation where Indian, Bangladesh, and even Afghan currencies are valued much higher than Pak rupee.

“Local pharmaceutical industry is providing medicines, whose quality is second to none by the international standards,” he added.

He said that conversion cost is still the most economical due to efficiencies and introduction of latest technologies.

In a presser earlier, PPMA Chairman, Zahid Saeed said the cost of production of the local pharmaceutical industry has increased manifold since 2018.

“This is due to an unprecedented increase in the value of the dollar while keeping in view the fact that up to 90 percent raw material of the industry is imported,” he reasoned.

In the meanwhile, he added, electricity tariff was increased by 45%, gas 65%, and diesel 95% as all these factors also directly affect the industry’s cost of production.

Recently the government allowed the increase in prices of around 45,000 medicines by 15% following a suo motu notice taken by the Supreme Court. But in some hardship cases, prices of 464 medicines were increased by over 15% because their cost of production had become unbearable for the industry and production of many of them had already been stopped.

“Maintaining these prices was possible if the dollar remained stable, utilities prices were maintained and the government was able to control inflation as prices of drugs could not remain isolated from these factors,” he said. He said the pharmaceutical industry will not demand any price adjustment if the situation prevailing in January 2018 is brought back.

Some manufacturers, however, welcomed the decision while stressing the need for introduction of one molecule one price mechanism.

“Prices should be given to molecules and not brands. Prices should be uniform on the basis of one molecule one price. DRAP Act 2012 is applicable on all manufacturers. The question is why not the same price. For this purpose, previous practice of uniform prices as per SRO471 and SRO100 should be reinstated,” said Amjad Ali Jawa, former Chairman PPMA.