ECC allows medicine prices to be hiked by up to 20pc

ISLAMABAD: The Economic Coordination Committee (ECC) of the federal cabinet Friday approved a 20 per cent increase in the prices of essential drugs for a second time in less than three months, making them out of the reach of poor amid soaring inflation.

The decision was made during the ECC meeting, held with Federal Minister for Finance and Revenue Senator Ishaq Dar in the chair, according to a statement issued by the Finance Division. Earlier on February 10, the ECC had approved an increase in the prices of 20 medicines, including paracetamol.

“To ensure continuous availability of drugs in the market, the ECC, as a one-time dispensation, allowed manufacturers and importers to increase their existing MRPs [maximum retail prices] of essential drugs equal to 70pc increase in CPI [consumer price index] (with a cap of 14pc) and MRPs of all other drugs and lower priced drugs an increase up to 70pc in CPI (with a cap of 20pc) on the basis of average CPI for the current year i.e. July 1, 2022 to 1st April 2023. It has been allowed under the condition that it should be considered as an annual increase for the financial year 2023-24 and no further increase under this category would be granted in the next financial year,” the statement said.

The Ministry of National Health Services, Regulations and Coordination presented a summary for an increase in maximum retail prices of drugs, based on the recommendations of the Policy Board of the Drug Regulatory Authority of Pakistan (DRAP) in the wake of devaluation of the Pak Rupee and inflation. The forum further advised the Policy Board to review the situation after three months — in July 2023 and recommend reducing the prices to the federal government, if the rupee appreciates.

The ECC also considered and approved a summary of the Ministry of National Food Security and Research on the fixation of wheat procurement targets for Sindh, Punjab, and Balochistan for wheat crop 2022-23 along with cash credit limit.

The Govt of Sindh assigned a procurement target of 1.400 MMT with a procurement price of Rs40,00/40 Kg. The Govt of Punjab assigned a procurement target of 3.500 MMT with a procurement price Rs3,900/40 Kg. The Govt of Balochistan assigned a procurement target of 0.100 MMT with a procurement price of Rs3,900/40 Kg.

It also considered and approved Rs35 million additional funds as a technical supplementary grant for the establishment of Passport Processing Centres at the tehsil level in 30 administrative units and creation of 30 posts of MRP operational officers in the Department of Immigration and Passports, subject to the approval of the Austerity Committee. The ECC also approved Rs450 million for the Ministry of Interior as a Technical Supplementary Grant to meet the operational requirements of the ICT Police regarding its liabilities and training of recruits.

The Ministry of Aviation submitted a summary and informed that PIA Investment Limited (PIA-IL) has come across an opportunity offered by the New York City Government to utilise the Roosevelt Hotel (1,025 rooms) over a period of three years for housing immigrants at the rate of US$200 per room per day. The ECC approved the recommendations of the ministry and also approved a four-member negotiating committee, led by the secretary Aviation Division, to negotiate with the New York City Government and the Hotel Union. It also allowed PIA-IL/ RHC to utilise $1.145 million from the available balance as bridge financing to commence the re-opening work at the Roosevelt Hotel. The decision was taken in the wake of a predicted drop of 40 per cent in prices of real estate in New York.

The Ministry of Aviation supported the recommendations of the PIA-IL Board of Directors. The four-member negotiating committee was fully empowered to execute a settlement with the New York City Government and the Hotel Union. If the settlement with the Union is achieved, and New York City decides to terminate the contract after 14 months it would give a four months notice in advance. It is estimated that funding for the Union’s remaining settlement amount of $27.5 million would be underwritten by the government. The payment to the Union is envisaged would be made on a weekly basis for three years. This plan should be made part of the final agreement with the Union and shall apply to the remainder of the payment, if any, due to loss of business with New York City. The PIAIL/RHC is permitted to utilise the funds of $1.145 million from the available balance as part of the GOP grant to commence the reopening works at the Hotel.

Meanwhile, Minister of State for Petroleum Dr Musadik Malik announced that the government had decided to stop giving gas to power plants getting gas at cheaper rates but supplying very costly electricity to people. Speaking at a news conference, he said the government would provide 50 million cubic feet per day (MMCFD) of gas to poor households. “We will take back cheap gas from the rich and provide it to the poor,” he announced.

“Gas has been taken back from those who used it to produce and sell expensive electricity. The monopoly of some people has been abolished,” he said without elaborating on which entities he was talking about. Landlords and building owners would also no longer be able to exploit tenants by forcing them to pay high energy bills for privately supplied energy resources.