Many pharma companies increase drug prices against assurance of applying from September

ISLAMABAD: Majority of pharmaceutical companies have increased drug prices against the assurance that the annual drug prices will be applied with effect from September 2020, drug dealers and traders told Business Recorder during an antidotal survey.

According to drug dealers, the pharma companies have increased the price of Nilstat drops used for mouth diseases by Rs40 per pack from Rs74 to Rs114, which reflects an increase of 46 percent.

Price of injection, Levemir used for sugar treatment has been increased by Rs770 per pack from Rs5,046 to Rs5,816, which reflects an increase of 15.15 percent, injection Lantus used for sugar treatment price jumped by Rs667 per pack from Rs3,191 to Rs3,858 per pack, which shows an increase of 20.9 percent.

Similarly, price of tablet Daflon used for piles treatment has been increased by Rs30 per pack from Rs407 to Rs437 per pack, which shows an increase of 7.37 percent, injection Epival price increased by Rs70 per pack from Rs82 per pack to Rs152 per pack, which reflects an increase of 85 percent, tablet Galvas met increased by Rs100 per pack from Rs1,554 to Rs1,654 reflecting an increase of 6.43 percent.

Tab neurobion price jumped from Rs555 per pack to Rs750 per pack reflecting an increase of 35.13 percent, tab polybion Z price increased by Rs90 per pack from Rs75 per pack to Rs165 per pack, which reflects over two times increase, Seretide inhaler price jumped from Rs1,050 to Rs1,090 per pack and Tablet airtal price went up from Rs200 per pack to Rs283, reflecting an increase of 41.5 percent.

Traders told this correspondent that that was the first phase of increase in medicine prices, while second phase would come after Eidul Azha. The Drug Pricing Policy 2018 granted the pharma manufacturer with an annual right to automatically increase prices by seven to 10 percent without government's right to intervene. Drug Pricing Policy 2018 has been revised by the Federal Government with an amendment that the government can exclude any category of drugs from annual increase of price and also lowered timeline for decisions on hardship cases to 120 days from 180 days.

Most of the companies had already submitted their price increase calculations to the Drug Regulatory Authority of Pakistan (DRAP) prior to these amendments. The DRAP has asked all companies to (re) submit their calculations as per a new format, which may result in 15-20 days delay in price increase, a Topline Securities Research report stated.

The companies will continue to calculate price increase in minimum retail price (MRP) of essential drugs (excluding lower priced) equal to 70 percent increase in the CPI (with a cap of seven percent) and MRPs of non-essential drugs up to full CPI (with a cap of 10 percent). The CPI for FY20 clocked in at 10.74 percent.

We believe companies will be able to claim price hike of seven percent on portfolio of their essential drugs and 10 percent on portfolio of non-essential drugs. A spokesperson of the National Health Services told Business Recorder that the government had not approved any increase in price of essential drugs as incorrectly reported in media. All this was done in the backdrop of assurance given by pharmaceutical industry that it will not apply for annual raise of drug prices at least till September 2020, he added.

It has been observed that the industry has gone back on its words, and about 100 drug companies have applied for annual increase in prices. The government has the right to step in to freeze any or all drug prices to safeguard public interest in view of the COVID-19 situation.

On June 29, the apex court had ordered the federal government to decide new drug prices within four weeks as it expressed dissatisfaction over operation of the DRAP, which, it said, works under pharmaceutical companies.

A division bench comprising Chief Justice Gulzar Ahmed and Justice Ijazul Ahsan issued the order, while hearing a petition filed by a private pharmaceutical firm against reduction in prices of medicines. The Ministry of Health on December 31, 2018 issued a Statutory Regulatory Order (SRO) to fix the maximum retail price (MRP) of 889 medicines.

The ministry had reduced prices of 395 medicines; increased prices of 464 medicines and kept prices of 30 medicines unchanged. However, the pharmaceutical industry increased prices of some medicines by up to 100 percent to 500 percent. The government on May 4, 2019 announced to reverse the increase in medicine prices after a backlash. During the hearing of the petition on Monday, the counsel for the private pharmaceutical firm had said the government, while reducing the medicine prices had violated a Supreme Court order.

According to the council, the SC had ordered government to freeze prices at the level of year 2013. The government has received recommendations of the task force but it has not yet made a decision on the recommendations as Drug Pricing Committee (DPC) has no authority to determine drug prices. Prime Minister Imran Khan also holds the portfolio of Ministry of National Health Services, Regulations and Coordination.

The amendments in the policy now allow the DRAP to review the calculated price increase of the manufacturers within the 30 days of its submission by the manufacturers. The pharmaceutical companies will take heart from the fact that if the DRAP does not intervene within 30 days of the submission, the price increase as submitted by the manufacturers will be made effective.

Now the DRAP is time bound to review the price changes and given that there are more than 100,000 medicines, it seems practically very difficult to do so within the 30 days period. The holder of "Sehat Insaf Card" will be forced to pay additional amount from their own pockets as result of increase in drug prices, if they are suffering from a fatal disease such as cancer or any other of serious nature as the maximum limit of the cards is Rs600,000 per annum. A family having "Sehat Insaf Card" can use up to Rs300,000 for priority healthcare services and Rs60,000 for secondary healthcare services.

Copyright Business Recorder, 2020