Recently, the news of local pharmaceuticals halting the production of life-saving medicines is flooding the newspapers. This update is serving as an ultimatum to the government and the regulators if a decision is not made soon regarding drug pricing. The sky rocketing fuel prices as well as the devaluation of the local currency have made local pharmaceuticals unable to continue operations at the same rates. As for the multinational companies, where there is significant investment in R&D for advanced patient care and innovative therapies, continuing on the same pricing has become quite challenging as well.

Statistics have also revealed that only 500 local companies are operating against 800 license-holders. Moreover, numerous MNCs have wrapped up their business in Pakistan due to the same reason. Within less than a decade, some 12 MNCs in the sector have entirely ceased their operations and exited Pakistan, while the remaining 24 MNCs have reduced their manufacturing operations to a considerable level owing to inefficient capacity utilization. When government adopts a draconian price control, it defines the market price of a product and forces all, or a large percentage, of transactions to take place at that price instead of the equilibrium price set through the interaction between supply and demand. This means that the government price will be either too high or too low, leading patients to resort to fake or substandard medicines as they seek affordable options.

KIRAN FAROOQ,

Karachi, December 11.