Drug companies warn of increasing medicine prices 'if DRAP continues to ignore plight'

The Pakistan Pharmaceutical Manufacturers’ Association (PPMA), the representative body of pharma companies, has warned that it will increase prices of select medicines if the Drug Regulatory Authority of Pakistan (DRAP) does not hold talks by Monday, October 3.

The prices of medicines in Pakistan are regulated by DRAP, which means pharmaceutical companies cannot increase rates unless the authority gives them a go ahead. At present, the country is facing a shortage of several medicines including the ones used to treat fever.

According to the PPMA, some medicines have become unviable to produce because their cost has exceeded the retail price. Owing to the scarcity, medicines are now being sold in the black market for nearly three times their actual prices.

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“TB (Tuberculosis), fever, epilepsy, malaria, diarrhea and antidepressant drugs are short in the market,” said outgoing PPMA Chairman Qazi Mansoor Dilawar in a press briefing held on Thursday.

“Many companies have stopped producing drugs that were previously made at a low-margin because its no longer viable to produce them,” he said.

Several PPMA officials said the cost of production – import of raw material, electricity price and other expenses – has gone up by a considerable margin but prices have stayed the same.

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“Even the prices of flour and pulses have gone up significantly. Rupee depreciated to Rs230-Rs235 from Rs155 when we last jacked up our prices,” they said. “Around 95% of our raw material is imported.”

He said the auto sector and steel industry have increased prices multiple times while the pharmaceutical sector is the only industry that was forced to keep rates intact despite massive increases in the cost of production.

Former PPMA chairman Zahid Saeed said that the industry was moving towards disaster as around 150 to 200 factories had shut down.

According to him, increasing prices was the only option to ensure availability of essential medicines in the country.

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Meanwhile, PPMA officials said prices of around 100 drugs can be expected to go up in the range of 15-25%.

“The price hike will only match the cost of the medicine and it will help companies break-even,” they argued.

“The industry is not seeking a profit because the country is going through its biggest health challenge in the form of massive outbreak of infectious diseases in flood-affected areas.”

Medicine producers cannot opt to halt production in the current circumstances and PPMA wants to ensure availability of the essential medicines in the market at affordable prices, he said.

“Under the Drug Act-1976, DRAP is obligated to ensure availability of safe, efficacious and potent drugs in the market at reasonable rates that are equally acceptable to the consumers and the industry,” said Dilawar. “It is highly lamentable that DRAP has completely failed to discharge its responsibilities over the past few months.”

He told media persons that the National Drug Pricing Policy 2018 had empowered DRAP to adopt extraordinary steps to overcome unusual economic circumstances in the country for ensuring the availability of essential medicines in the market.

“These extraordinary circumstances have been persistent for our industry for the past many months due to massive depreciation of the rupee and phenomenal increase in cost of producing medicines,” he said.

He said that PPMA had approached DRAP in April this year to convene the meeting of its policy board, but to no avail.

“As a last resort, we moved the Islamabad High Court (IHC) against the government’s indifference towards our pressing issues and IHC gave 15 days to DRAP to consider our extraordinary circumstances for adopting the corrective measures,” he said.

Nearly one-and-half months have passed since the court issued its order and DRAP has yet to take any action to resolve our problems, Dilawar said.

Saeed also claimed that the industry’s refunds to the tune of Rs40 billion were also stuck with the Federal Board of Revenue for the last six to seven months.

An industry source, who has previously been associated with the health ministry, said pharma companies in Pakistan run profitable businesses.

“If you go through their balance sheets, you will see that they have been making hefty profits that are better than many other industries in the country,” said the source, requesting anonymity.

“If DRAP lets them increase prices, their profits will inflate,” the source said.