The federal government has decided to amend Drugs Pricing Policy 2015 to link increase in drug prices with Consumer Price Index (CPI) and allow cumulative effect in case of court cases, sources close to Minister for National Health Services, Regulations and Co-ordination told Business Recorder.
The cabinet was informed that the Drugs Act, 1976 and the Drug Regulatory Authority of Pakistan Act, 2012 empower the federal government to fix maximum retail price of a drug to be sold in the market. The Economic Co-ordination Committee (ECC) of the Cabinet approved a Drug Pricing Policy in 2015 which provides detailed mechanism for the purpose of fixation of Maximum Retail Prices (MRPs) of drugs under various scenarios. Para 8 the Drug Pricing Policy-2015 stipulates that with effect from July 1, 2016, annual increase in prices of drugs will be linked with Consumer Price Index (CPI) of the immediately preceding financial year.
The sources said that after the announcement of CPI @ 4.16 per cent for the year 2016-17 by the Bureau of Statistics in first week of July 2017, some pharmaceutical companies intimated increase in MRPs of their drugs according to CPI. The companies were advised not to increase prices of their drugs unless approved by the federal government. Two of these companies filed suits in the Sindh High Court which in its order of August 24, 2017 directed that a meeting be convened of the Drug Pricing Committee (DPC) within 20 days from the date of court's order to consider the annual increase availed under the Drug Policy 2015.
According to sources, in compliance with order of the court, meeting of the DPC was held on September 8, 2017 which recommended annual increase in MRPs of drugs in accordance with provisions of the Drugs Pricing Policy-2015 which is as follows: (i) scheduled drugs up to 5 per cent of CPI- 2.08 per cent; (ii) non-scheduled drugs up to 70 per cent of CPI - 2.09 per cent; and (iii) lower priced drugs (equal to CPI) - 4.16 per cent.
The sources further stated that DPC also considered increase in threshold limits of lower priced drugs under para 11(1) 0 of the Drug Pricing Policy-2015 and noted that these limits were not increased during last year when increase in MRPs of drugs was allowed on the basis of CPI of financial year 2015-16 @ 2.86 per cent as announced increase in threshold limits @ 1.43 per cent for financial year 2015-16 and @ 2.08 per cent for 2016-17.
The Ministry of National Health Services, Regulations and Co-ordination proposed that draft notifications in respect of annual increase in MRPs of drugs and draft notification in respect of increase in threshold limits of lower priced drugs may be approved by the cabinet.
The cabinet deliberated the issue and observed that the increase in the prices of drugs should be automatic after the announcement of CPI and in case of some difficulties ie court cases etc the cumulative effect should be given.