Opposing the entire price control by Drug Regulatory Authority (DRA), Pharmaceutical industry is seeking across the board increase in drug prices for sustainable growth of industry. Addressing the press conference, newly elected Chairman Pakistan Pharmaceutical Manufacturers Association (PPMA) Jawed Akhai here on Monday said that last across the board price increase was granted in 2001 and since then a massive cost escalation took place to effect the cost of inputs in drug manufacturing.
"Therefore, we are asking DRA for an interim across the board price increase as the industry cannot survive without an immediate relief". He also criticised the role of DRA and said that Pharma industry did not disagree to the prices being controlled by the DRA, however it should be limited to the 70-80 life saving molecules determined as such by the WHO. "The remaining molecules which are not life saving should not be under the purview of price control and even prices of controlled products cannot be frozen for eternity", he demanded.
There are several policy matters pending at DRA level which is a great hindrance in materialising true potential of pharmaceutical industry and these include setting up of pricing mechanism, contract manufacturing, vitamin policy and other related matters, the Chairman said.
Akhai said the industry was yet to get a price mechanism, which could provide an opportunity to adjust prices against cost escalation related to inflation and devaluation of Pak rupee against foreign currencies. Presently, price increase was being awarded on selected basis, which was mitigating very little amount of cost increase and that had very badly affected the sustainable growth of the industry and new investment, he mentioned. There should be a mechanism of periodic predetermined review/revision of prices based on the inflation and currency devaluation.
"Pharmaceutical industry is facing hardship after 18th Amendment, which transferred Health sector from federal to provincial government, though the ordinance for DRA has been promulgated but it has yet to be transformed into an Act by the parliament. We strongly urge the legislators to do so on priority by October 16, 2012 to avoid another crisis", he said.
PPMA Chairman also urged the government to smooth out the working of DRA to streamline the drug registration process in the country and to carry on pharmaceutical business without any obstruction. "We also suggest that there should be a defined response or turnaround time from the DRA for every application, request to create a healthy relationship and better working environment between the Pharma industry and DRA", he said.
He also criticised the Free Trade Agreement (FTA) with India and demand for equal level playing field for domestic industry as well. "The direct import of medicine from India will harm the domestic Pharma industry", he said. Akhai said that low cost of utilities and availability of local manufacturing of active pharmaceutical ingredients (API) reduced the input cost of Pharma products in India, while in Pakistan, utilities were costlier than India and there were huge duties/sales tax on Pharma industry including up to 10 percent import duty on raw material, up to 20 percent import duty on packaging materials, 16 percent sales tax on import of packaging materials, and other services including logistics and insurances.
"Therefore, on behalf of Pharma industry we demand the government to provide a level playing field to local Pharma industry before extending MFN status to India, as we will become uncompetitive against Indian Pharma companies due to high input cost," he demanded.
The government's claim that there was no sales tax on pharmaceutical products was not a fact and ground reality was that the pharmaceutical manufacturing companies were being taxed from various sources and those taxes were built-in in the input cost of products and the consumer was paying the taxes indirectly, he mentioned. The government should create employment opportunities and offer social security, free medical coverage to citizens who were not employed or not earning enough money to address their medical needs, PPMA Chairman said.
Pharma export was a neglected area on the part of government, but on the contrary, showing healthy growth due to lone efforts of the Pharma industry, he said and added "we urge the government to provide special incentives to Pharma industry for boosting exports and also give a subsidy on the certification process from the regulating bodies of the world like FDA, WHO, EU etc". On the occasion member Central Executive Committee PPMA Qaiser Waheed and PPMA Executive Secretary Riaz Hussan were also present.