Thursday May 30, 2024

A spoonful of sugar helps the ‘medicine’ go down

By Mansoor Ahmad
April 11, 2019

LAHORE: Neither the government nor the Drug Regulatory Authority of Pakistan (DRAP) is taking the responsibility of price increases duly approved by the state in order to ensure that manufacturing of essential drugs that discontinued because of price issues may start again.

This is a delicate issue and should be dealt with professionally. We have already sunk the pharmaceutical industry through public appeasing policies. The rate of petroleum products has quadrupled in the last two decades, the sugar prices have also increased four times, mutton rates have gone up by 8 times from their rates at the start of this century. Doctors’ consultation fee has increased five times from Rs500 to Rs2500 in past two decades. The clinical tests are now four times as expensive as they were two decades back.

So much so the room charges of some private hospitals are now higher than room charges of some top-class hotels. The government should own the increase in prices if they were in line with the state and its regulatory policy. The drugs that vanished from the market are now freely available to the patients.

Drug pricing remains a very sensitive issue around the world. State regulates the drug prices to ensure that manufacturers charge consumers fairly. At the same time it is imperative that the interests of manufacturers are not compromised otherwise they would stop producing those drugs.

Since drug manufacturing is a commercial process; prudent governments ensure that the manufacturers also earn fair profits and continue producing drugs for the patients.

The DRAP however went too far in price regulation that strangulated many manufacturers. When commercially viable prices were not approved many manufacturers stopped producing those medicines.

It resulted in acute shortage of many essential drugs. The paucity of supplies resulted in abnormal increase in prices of those medicines. Shortage was also overcome through smuggling through our porous borders. The rates charged for these drugs were much higher than the hike requested by the pharmaceutical manufacturers.

The persistent shortage of drugs was noticed by the Supreme Court as well. During the court proceedings it was revealed that no increase in drug rates has been allowed for several years except in hardship cases requested by the manufacturers.

It was also found that even the hardship cases were taken up by the regulator on the whims of its officials.

The Supreme Court then directed the DRAP to decide all hardship cases within a stipulated time and come up with a transparent and viable drug pricing policy as soon as possible.

Some of these events took place during the tenure of the last government but the drug pricing policy was announced during the interim government period in June 2018. The drug pricing policy was more transparent then the previous price fixing mechanism. The policy allowed the manufacturers to fix the retail price of each drug on the basis of the average price of the same drug with same dose in Bangladesh and India. It was a fair regulation and in line with the guideline provided by the World Health Organization.

The manufacturer was however bound to inform the regulator about the price increase according to the given formula of the regulator before implementing them.

All this is clearly mentioned in the new drug policy. On the top of that the drug regulator issued two regulatory orders (SROs) allowing companies to increase the prices accordingly. DRAP issued an SRO 34 (I) / 2019 on 10 January 2019 with the approval of the federal government to increase maximum retail prices by 9 percent for the drugs the prices of which were increased under the hardship cases category in 2018, and 15 percent for the rest of the formulations.

Earlier on 31 December 2018, the DRAP issued SRO 1608(I)/2018, SRO 1609(I)/2018, and SRO 1610(I)/2018 to notify price increase of 128, 67, and 889 medicines respectively under the hardship cases for which the manufacturers were demanding price increase since long as they were unable to continue the production of those drugs due to increasing unviability. High inflation rate, rupee depreciation, and increase in raw material cost were making it hard for the companies to keep manufacturing the drugs at loss.

The regulator should take strict action if any company has crossed the limits set on prices. It would in fact be sane to deregulate the rates of all drugs that are not classified as life saving essential drugs. India did it and the prices of most of those drugs have come down.