Invoking force majeure, drugmaker stops production of all Panadol products

ISLAMABAD: Medicine crisis is likely to worsen in Pakistan after GlaxoSmithKline (GSK) Consumer Healthcare Pakistan on Friday announced to stop production of Panadol Tablets, Panadol Extra Tablets and Children’s Panadol Liquid Range by declaring ‘force majeure’, arguing they were incurring heavy financial losses on the production of Panadol range due to an increase in the price of paracetamol raw ingredients.

“We are incurring heavy financial losses on the production of entire Panadol range due to an increase in the price of their raw ingredients and in the absence of due approval by the federal government on the recommendation of Drug Pricing Committee of Drug Regulatory Committee of Pakistan. Due to these challenges, manufacturing of Panadol range on negative margins is unsustainable and despite exhaustive efforts of the company to mitigate the issue through dialogue, the situation is now beyond our control, compelling us to declare force majeure,” Chief Executive Officer (CEO) of GSK Consumer Healthcare Pakistan, Farhan Haroon, said in a letter to PM’s Principal Secretary Syed Tauqir Shah.

Officials of the DRAP and Ministry of National Health Services, Regulations and Coordination (NHS,R&C) refused to comment on the new development, arguing they had not received any such letter or intimation from the pharmaceutical firm. Pakistan is facing a serious medication crisis at the moment as many pharmaceutical companies are not manufacturing several essential drugs, including various brands of oral and injectable paracetamol, anti-psychotic and anticonvulsants due to increase in cost of production. But the government is unwilling to increase the prices of medicines on the demand of pharmaceutical industry.

According to Pakistan Pharmaceutical Manufacturers Association (PPMA), cost of medicines has increased by 38 per cent due to an increase in the cost of raw materials, rupee devaluation, increase in cost of utilities as well as transportation charges and are demanding an immediate 40 per cent increase in the prices of medicines across the board.

In his letter to the PM’s Principal Secretary, GSK Consumer Healthcare Pakistan’s CEO said they have repeatedly drawn the attention of various government stakeholders regarding the critical issue of extraordinary and rapid increase in paracetamol (raw material) prices in Pakistan, and their appeals to the federal government to accord approvals for the adjustments to the selling price(s) of the captioned Panadol range of products, all of which are Paracetamol based.

“We obtained the approval in the DPC of DRAP, held on 12 January 2022 which was recommended by the DPC for the approval of cabinet. But, according to media reports, the same has been rejected after a prolonged delay by the latter without any intimation of reason(s) given to the company”, Farhan Haroon said.

Also, he maintained, although the company has received a routine Consumer Price Inflation (CPI) adjustment for the year 2022 from DRAP on 25 August 2022, the same is not commensurate with the debilitating increase in the prices of the raw material of Paracetamol.

During the last 12 months, the company produced nearly 5,400 million tablets of Panadol 500mg and Panadol Extra to serve its customers, consumers and patients in need. The company has played a critical, consumer/patient-focused and responsible role during the Covid 19 pandemic, dengue fever crisis and floods across Pakistan, by ensuring continuous supplies of the Panadol range. “We did all this despite incurring heavy financial losses on the production of said Panadol range due to an increase in the price of Paracetamol raw ingredients and in the absence of due approval by the federal government of the recommendation of the DPC / DRAP,” he said.

“Despite exhaustive efforts of the company to mitigate this matter through dialogue, the situation is now beyond our control”, Farhan Haroon said adding that in these circumstances, they are forced to declare force majeure regarding the production of Panadol Tablets, Panadol Extra Tablets and Children’s Panadol Liquid Range.

“But we remain keen to meet you to resolve the situation so that we can continue to deliver everyday healthcare to Pakistani people. We urge the federal government to take urgent action to rationalise the prices of impacted Panadol range commensurate with the increase in price of impacted raw material and as recommended by the DPC of DRAP, so as to enable the company to continue supporting the government to ensure an ongoing supply to all patients and consumers in need,” he added.