Drugs/biologicals: PKR slide, rising inflation led to hike in MRPs, ECC told

ISLAMABAD: An excessive depreciation of the rupee and “hyperinflation” led to an increase in the Maximum Retail Prices (MRPs) of essential drugs/biologicals.

A summary to this effect that was put up to the Economic Coordination Committee (ECC) of the Cabinet last meeting revealed the ECC allowed an increase in the MRPs of drugs after the pharmaceutical industry sought an across-the-board increase due to excessive devaluation of the rupee and the hyper-inflation.

The Ministry of National Health Services summary reveals that the Pakistan Pharmaceutical Manufacturers’ Association (PPMA) filed a writ petition before the IHC and the Court directed for the representation of the association before the Policy Board of the Drug Regulatory Authority of Pakistan (DRAP).

Accordingly, the DRAP Policy Board in its meeting held on 8th December 2022 considered the representation of the PPMA and regretted its request for an across-the-board increase of 38.5 per cent in the MRP of all registered drugs. However, a committee was also constituted by the prime minister dated 25-11-2022 to propose a way forward/report on the price increase request of the PPMA.

The meeting of the committee was held on 17-03-2023 under the chairmanship of the Minister for Finance and Revenue with representatives of the PPMA and the Pharma Bureau.

The PPMA requested an across-the-board increase due to the excessive devaluation of the rupee and hyperinflation.

The committee advised the pharmaceutical industry to approach the Policy Board of the Authority and directed the DRAP and the Ministry of NHSR&C to afford personal hearing.

After the decision of the Policy Board, PPMA filed another writ petition before the IHC with a prayer to declare the decision of the Policy Board illegal, without lawful authority, of no legal effect and to direct the chairman, Policy Board and the CEO, DRAP to decide the representation in accordance with the law and make recommendations in respect of an across-the-board upward adjustment after providing the petitioner an opportunity of hearing.

The ECC meeting was informed that the IHC passed an order dated 21.01.2023 that; (i) the petitioners are aggrieved by decision of the 44th meeting of the Policy Board of Drug Regulatory Authority of Pakistan (DRAP) dated 08.12. 2022; (ii) the learned counsel for the petitioners’ states that the petitioners had filed writ petition to have their representations heard by the policy board of the DRAP. Despite the order passed in such petition, the order was not complied with and contempt petitions were filed after which the Policy Board of the DRAP considered the petitioners’ representation. While doing so the Policy Board of the DRAP considered the consent of a notice issued threatening contempt of court proceedings as opposed to the actual representations and points raised there including the fact of devaluation of currency on MRP. However, the Policy Board of the DRAP decided that it is free to afford the petitioners a hearing and decide any contentions raised by the petitioners during such hearings.

The DRAP also unanimously decided to make recommendations to the federal government that as a one-time dispensation, manufacturers and importers may increase their existing MRPs of essential drugs/biologicals (excluding lower priced) equal to 70 per cent increase in the CPI (with a cap of 14 per cent) and MRPs of all other drugs/biologicals and lower priced drugs up to increase in the CPI (with a cap of 20 per cent) on the basis of average CPI for the current year 1st July 2022 to April 2023 with some conditions including to consider it as an annual increase for the financial year 2023-24 and no increase will be granted in the next financial year, Policy Board would review the situation after three months in July 2023.

Copyright Business Recorder, 2023