ISLAMABAD - The Health Ministry Friday revoked its decision of 15 per cent hike in drug prices on the directions of Prime Minister Nawaz Sharif who has also rejected the recommendations of Oil and Gas Regulatory Authority (OGRA) for an increase in petroleum prices.

According to a statement of Ministry of Finance and Economic Affairs Division, the government will now have to bear a subsidy of Rs 2.8 billion as the present oil prices will be maintained.

Taking notice of the increase in drug prices‚ Prime Minister Nawaz Sharif directed the authorities concerned to bring the medicine prices back to the previous level. On which the drug regulatory authority of Pakistan (Drap), Ministry of National Health Services, Regulations and Coordination withdrew its notification with an immediate effect.  The Oil and Gas Regulatory Authority (Ogra) had worked out a hike in oil prices, and dispatched the summary to the Ministry of Petroleum and Natural Resources for approval.

Sources said the OGRA had worked out a hike by 85 paisas per litre for petrol for the next month, Rs1.34/litre for high-speed diesel (HSD), Rs1.18/litre for kerosene, 82 paisas for light diesel oil (LDO) and Rs5.22/litre for high-octane blended component (HOBC).

On the other hand, the revocation of decision on drug prices comes only a day after the Health Ministry notified 15 per cent hike. The ministry officials had claimed that the pharmaceutical sector had been demanding a 97 per cent increase, since it was struggling to absorb a 100 per cent surge in production costs but 15 per cent price raise was given in the medicines whose prices had not been increased since 2001 to sustain the industry.

The pharmaceutical industry representatives, later in the day, in their letters to the Prime Minister urged him to review the decision regarding cancellation of long awaited price revision of pharmaceutical industry, which came after 11 years.

In a letter to Prime Minister, the Pakistan pharmaceutical manufacturers’ association (PPMA) said, “This increase was long awaited and will just give some breathing space to the industry in order to sustain itself. The Pharma Industry employs millions of people all across the country and is the fastest growing segment in exports from Pakistan and was looking forward to this minimum increase for the last 12 years. Cancellation of the SRO will have an extremely negative effect and may lead to severe consequences as regards non-availability of lifesaving medicines and commonly used drugs.”

Chairman Pharma Bureau Tariq Wajid in his letter said that the prices of all commodities and services have increased by well over 100 per cent in past 13 years, making it impossible to produce many drugs at the regulators price. “We are aware of the terrible difficulties faced by patients who are unable to get certain lifesaving drugs that have been discontinued by both the multinational and domestic pharmaceutical industry because of poor policy decisions.” As a result these drugs are smuggled into the country and are sold at two to three times higher than the controlled price allowed by drug regulatory authority. It is important to note that because they are smuggled there is no guarantee as to their quality or whether they are genuine.”

There is also a misconception that medicine costs are the highest in Pakistan. “We would be very happy to sell all medicines produced in Pakistan at average prices of the same drug in India, Sri Lanka and Bangladesh. In fact both domestic and multinational pharmaceutical companies have been requesting the government either to put back the mechanism for drug pricing linked to currency and inflation or allow the sector to sell their medicines at average prices prevailing in the region,” said the letter.

The SRO aimed to provide interim relief of only 1.25 per cent per annum on those pharmaceutical products whose prices have remained unjustifiably frozen for the past 13 years. Reversing even this small positive move which was communicated to and welcomed by our members head offices only a day ago, will send a very negative signal, and retard the efforts to encourage investment in Pakistan and build a positive image of the economic potential of the country, said Pharam Bureau chairman who represents multinational pharmaceutical industry.

According to information, the representatives of PPMA and Pharma Bureau also held a meeting and decided to meet the PM personally to tell their side of the story and if the PM stands by his decision they ‘may move the court for relief’. Sources say though the decision was taken by the Drap taking all provinces on board and with majority yet the Punjab government was not in favour of the increase and revocation of the notification has followed after the intervention of Punjab government.