Pharma sector's woes: 'responsible companies are opting to shut down production'

"Absence of legitimate profits due to rejection of pharmaceutical industry's plea to allow a reasonable price increase against inflation and heavy increase in input costs is scaring further investments from the pharmaceutical sector," Sheheryar Ansari, Co-Chairman Pharma Bureau said while commenting on the pricing of drugs policy.
Ansari, who is also the Chief Executive Officer of Eli Lilly, said that the last formal price increase to the industry was allowed in 2001.
"No doubt, the pharmaceutical sector is the most regulated sector as they cannot even improve packing of their products without prior approval from the authority concerned," he added.
Irrational pricing of drugs gives an opportunity for fake substandard medicines, and smuggled alternatives, which are putting poor patients' lives at risk. The proportionality of drug prices with their quality is the only thing local pharmaceutical companies are left with and no support from the government in this regard is adding to the woes of these companies, according to sources in the pharmaceutical industry.
They said that the "same old inconsistent policies" along with "unethical pricing" by the pricing committee is forcing pharmaceutical companies to either cut costs by compromising on quality or stop manufacturing drugs on which they are unable to recover their input costs.
"Responsible companies, however, are opting to shut down production," they said.
Another flipside of this issue is that some of the drugs are imported and sold at higher price, creating an impression that local drug prices have been increased. The fact is that since 2001 the government revised prices of only a few medicines whose producers had approached the Lahore High Court in 2010.
Sources revealed that due to unethical practices in the pricing committee some of the manufacturers have gone to the courts to seek price increase through normal genuine procedures. "And this is the only thing, in addition to volatile growth patterns of the industry, conducive for disinterestedness of international investors to come invest in Pakistan's pharmaceutical sector," they said.
The industry has numerous examples where companies have actually gone into description of 'hardship' cases on some important drugs commonly used by citizens of Pakistan but since the drug is actually making loss, the manufacturer, be it national or a multinational, discontinued the same.
Sources said that such shortage of drugs created by suspension is often reported by the ministry officials as a blackmailing tactic to get price increase whereas in actual the drugs were discontinued.
Also, the practice of awarding lesser prices to a drug often discourages multinational pharmaceuticals to launch their products in Pakistan, thus inflicting dual blow to the country in terms of depriving patients from quality research-based medicine, and denying local companies to introduce generic products.
Yet, the recent revision in prices of some of the commonly used drugs will not affect the consumer, rather it will shrink the margins of pharmacists, sources said. Out of around 60,000 registered drugs, the recent pricing committee recommended a price revision for just 80 drugs whose manufacturers were actually incurring losses and were about to suspend their production, they said.
Recently, a meeting of the Drug Pricing Committee (DPC) was held following a Lahore High Court order in response to petitions and due authorisation by the Provincial governments to continue the functions of pricing, registration and licensing pending the formation of a Drug Regulatory Authority (DRA). The provinces were represented by their health secretaries or nominees.
In the meeting the prices of about 100 low-priced products have been recommended for adjustment to ensure their continued availability in the market amid continuing inflation. The maximum recommended price adjustment for cough syrup were Rs4 per 60 ml pack and Rs6 for 120 ml pack, sources said, adding that adjustment in the prices of disprin tablets was recommended 20 paisa per tablet.
This recommendation by the DPC which has representatives from Pharmaceutical Manufacturers Association, patient interest groups and Pharma associations, are yet to be notified and it is critical that the notification be issued without further delay enabling companies to ensure availability of primary care medicines in the market, sources added.
"In the absence of any drug regulatory mechanism after the 18th Amendment, some of irresponsible chemists and pharmacists started charging exorbitant amounts on some drugs claiming that the companies have raised the prices," they said.
Inconsistent pricing policies have given way to unscrupulous elements to hoodwink consumers at retail level as well as given too many powers to bureaucrats who whimsically decided on critical Pharma matters.