Market forces should not fix drug prices, declares SHC

Pharma companies censured for criticising pricing policy

formulated with their support

Questioning the wisdom of leaving drug prices to be determined by market forces, the Sindh High Court (SHC) said on Monday that medicines were considered essential commodities and would always be subject to regulations.

Disposing of lawsuits and applications of pharmaceutical companies regarding fixation of maximum retail price (MRP) with reference to drugs under the Pakistan Drug Pricing Policy 2015, the court observed that the policy would apply to all pending hardship cases before a notification was issued.

Under hardship cases, companies can submit a request for increasing medicine prices if it is not viable for them to manufacture drugs at the price fixed by the Drug Regulatory Authority of Pakistan (DRAP).

Counsels representing the companies argued that the pricing policy was not retrospective and could not apply to the applications filed before its enactment on March 5 last year.

They said the government had not devised a transparent mechanism and it could not be applied with uniformity to determine the prices of the hardship drugs.

The additional attorney general contended that the policy was framed with active contribution of all pharmaceutical companies and their associations, adding that at this stage they could not criticise the policy framed with their assistance.

He submitted that the drug regulatory authority retained exclusive power to classify different drugs for determining which of the respective mechanisms for price fixation under the policy would be applicable in relation to pending or fresh applications.

The SHC’s single bench of Justice Mohammad Shafi Siddiqui observed that pharmaceutical companies might be aggrieved that the present policy was under par or did not live up to their expectations as far as fixing or increasing prices was concerned, but it was beneficial otherwise.

The court observed that if the pharmaceutical companies did not wish to enjoy the benefits of the notification, then it was their choice as they were not forced to do so; however, a mechanism was available in case they wished to have their prices reconsidered by the drug pricing committee.

The judged also observed that the policy was not alien to the system of either the Drug Act 1976 or the DRAP Act 2012, as the MRP of different drugs was set through notifications, but none of the companies objected since they were beneficial and issued in pursuance of the act.

The court said the federal government had already conceded to the jurisdiction of the appellate forum and everyone aggrieved over the pricing committee’s decision could approach the appellate board.

Justice Siddiqui added that reasonable restrictions were protected under the constitution, as cartels were often formed to manipulate the situation of the essential commodities and, hence, were always subject to reasonable restrictions.

He said that as far as orphan drugs and intravenous infusion were concerned, no coercive action would be taken until the centre and cabinet’s economic coordination committee reach a decision, following which the parties, including the plaintiffs and the drug pricing committee, could act accordingly.

The court observed that all hardship cases that were either dismissed or deferred on account of non-availability or lack of documents could be heard and decided after notices to the respective companies with specific instructions in relation to particular documents required by the committee.

The SHC also observed that for pending hardship cases the maximum increase that could be considered was 8% per annum on the existing approved MRP, which for the present controversy be considered as the MRP in terms of last notification issued on November 27, 2013, while all hardship cases filed subsequent to the issuance of the drug policy notification should be dealt under the drug policy. The court added that until such a time that a decision was made, no adverse action should be taken against pharmaceutical companies.