De-regulation of non-essential drugs has helped availability, realise export potential: PPMA chief

KARACHI: The deregulation of non-essential drugs has enabled pharmaceutical companies to resume production, improve accessibility and even curb the sale of smuggled and counterfeit medications, according to Tauqeer-ul-Haq, chairman of the Pakistan Pharmaceutical Manufacturing Association (PPMA).

“When legitimate drugs aren’t available, they are replaced by smuggled and counterfeit alternatives, which are often expensive and of questionable quality or efficacy—and in some cases even dangerous,” Haq told Business Recorder.

He highlighted the critical shortage of essential medications for cancer, tuberculosis, and heart diseases, which had led to a significant health crisis before the policy change. “The government made the right decision by deregulating non-essential drugs. Now, people can easily access necessary medications,” he said.

While addressing concerns about rising drug prices, Haq dismissed the perception that costs had skyrocketed across the board. He cited data from IQVIA, an international pharmaceutical market monitoring agency, indicating that price growth stood at 20% to 21%.

“This includes 4% organic growth due to the availability of previously unavailable drugs and around 2.5% to 3% growth from the introduction of new molecules,” Haq explained. “If these factors are excluded, the average price increase is approximately 15%, which is not much higher than the Consumer Price Index (CPI) of around 10% allowed by the government for price adjustments.”

The PPMA chief also pointed to long-standing hardship cases, where companies ceased production due to unfeasible pricing structures. “There were 162 hardship cases pending for years,” he said. “Companies abandoned manufacturing certain drugs because the production cost was higher than the sale price.”

Citing an example, Haq explained, “If a tablet cost more than Rs2 to produce but was priced at Rs2 or lower, companies simply stopped manufacturing it. Eventually, the government allowed a price increase to Rs6, enabling manufacturers to resume production. Previously, these drugs were being sold on the black market for Rs25.”

He emphasised that isolated instances of steep price hikes presented in media reports look to convey a misleading picture of broader market dynamics. These instances only occur for some hardship cases where the drug pricing committee discusses the merits and de-merits of allowing a price increase. If price increases are allowed on those hardship cases, they are to ensure the availability of medicines.

Haq also underscored that economic pressures, including inflation and currency depreciation, had pushed up production costs. “Over 90% of the raw materials for pharmaceuticals are imported. With the rising costs of electricity, petrol, and gas, medicine prices were bound to increase,” he said. He added that China’s environmental regulations had further disrupted supply chains, leading to operational cost hikes.

Haq added that deregulation was having a positive impact on pharmaceutical exports, which showed phenomenal 31% growth in the first quarter of fiscal year 2025.

He expected market forces to stabilize prices post-deregulation as competition intensifies. “This decision to deregulate non-essential drugs is implemented globally, including in India and Bangladesh. The government still regulates prices of 492 essential drugs, allowing an annual price increase of 70% of the CPI,” Haq explained.

He acknowledged that the price increase might appear problematic in the short term, attributing it to long-standing hardship cases and overdue deregulation.

Rashid Qureshi, a pharmacy owner in Karachi, reflected on the market’s current stability compared to previous shortages. “Prices have increased, and customers who used to buy a 30-tablet box now purchase just one strip due to budget constraints. However, patients are better off now than during the shortages when they had to pay black market prices for essential drugs,” he noted.

He praised major pharmaceutical companies for their disciplined supply chain management, stating, “They only fulfill pharmacy orders in line with actual demand to prevent hoarding.”

Umair Hanif, a pharmacy salesperson, echoed similar sentiments. “Patients have reduced their purchase quantities, but the market feels more stable. For instance, Tegral, which was priced at Rs50, is now Rs100—but during shortages, it was sold at Rs1,000, and even then, it was hard to find,” he recalled.

Despite the challenges, industry experts believe that deregulation and better supply chain practices have laid the foundation for a more stable pharmaceutical market in Pakistan.

Copyright Business Recorder, 2025