Raw materials, PKR, inflation: pharma industry urges govt to help resolve issues

LAHORE: In the wake of increase in the prices of raw material, devaluation of Pakistani rupee and unprecedented inflationary trend, the country’s pharmaceutical industry has sought immediate intervention of the federal government to avoid any catastrophe.

“Due to massive increase in the price of raw material compounded by the continuous devaluation of Pakistani rupee and unprecedented inflationary trend, the companies are facing extreme difficulty in ensuring availability of drugs in the market,” Ayesha T Haq, Executive Director Pharma Bureau, said adding: “Cost of production has increased by 60 percent.”

It may be noted that various manufacturers have already stopped manufacturing most commonly used drugs which will severely aggravate the suffering of patients and public. Clearly, Ayesha added, no industry can grow if it is compelled to sell its product at an unreasonable, unjust price which is fixed in absence of a fair assessment of price based on just considerations of increase in the total cost of production, devaluation of currency and rate of inflation.

“Unfortunately, the pharmaceutical industry suffered a devastating blow as prices of the Active Pharmaceutical Ingredients i.e., raw material used in the manufacturing of drugs increased exponentially in the international market since the outbreak of Covid-19 Coronavirus pandemic.

“Simultaneously, factors of production like cost of fuel, electricity, freight charges and packing material witnessed unprecedented increase during this period,” said Ayesha.

“The Pakistani rupee has devalued by more than 50 percent against the US dollar within the last one year and due to the volatile economic situation presently prevalent in the country, it is projected that the rupee will continue to further devalue.”

Pharma industry sources claimed that the exchange rate of the US dollar against Pakistani rupee back in July 2019 was 158 which went up to 239.11 by July 2022, registering 51.34% increase. Similarly, the packaging material for medicine also increased substantially as one glass bottle’s cost was Rs5.67 in 2019 and now it is available in Rs10.45 with 84.30% increase.

One carton was available in Rs54 in 2019 which now costs Rs82 after the increase of 51.85%. Likewise, the cost of one unit of gas was Rs74.03 in 2019 and today one unit is available in Rs167.34 with the increase of 126.04%.

The price of one litre petrol was Rs113.20 in 2019 and it went up to Rs234.42 in 2022 with the increase of 107.08%. The industry is also bearing the brunt of high freight cost as per carton freight cost has gone up to 77% from 2019 while the minimum wages also witnessed around 55% increase since 2019.

In the present circumstances, Ayesha said the impediment of growth in the pharmaceutical industry would deny the access of patients and the public at large to safe, effective, potent, and economical drugs.

Copyright Business Recorder, 2023