Price decision delay keeps 400 medicines out of public reach

KARACHI: The government has been clueless about a price decision on medicines awaiting approval for almost two years, keeping more than 400 medicines out from public reach, industry officials complained on Monday.

“We have applied for pricing determination of more than 400 drugs with the DPC (Drug Pricing Committee) in February 2019,” an official said. “All the technical testing and assessments have been done by the Drug Regulatory Authority of Pakistan (DRAP), but the cabinet approval lingers on.”

Pharmaceutical manufacturers meet 70 percent demand of finished medicines in Pakistan. The industry has a large market to serve.

Analysts believe uncertain drug pricing mechanism will push the pharmaceutical industry into another crisis. The industry is already suffering, and posted a negative growth of 5.38 percent in April amid the lockdown associated with coronavirus outbreak.

There are about 760 pharmaceutical manufacturing units including those operated by 25 multinationals present in the country. Latest estimates are not available, but an estimated $1.4 billion worth of medicines were sold in the country a decade back and then the market was expected to double in five years. Industry officials said the hurdle created disappointment within the pharmaceutical industry.

“Can we expect an organisation to review and approve requests for price adjustments for around 90,000 drugs, when it couldn’t even approve 400 drugs in 18 months,” the official said.

A pharmaceutical industry official said all the industries, including pharmaceutical industry, need long-term policies to plan their investment and production. “Continuous tinkering with the policies only shakes the confidence of investors.”

The government approved a proposal to amend the Drug Pricing Policy 2018 to change the existing mechanism, which would allow pharmaceutical manufacturers to adjust their prices as per inflation and fluctuation in foreign exchange.

This system allowed companies to make limited annual adjustments to offset the impact of inflation and devaluation. Industry officials said the change would force manufacturers to look towards DRAP to finalise prices of thousands of products on a case to case basis.

The existing drug pricing policy, which the government intends to change, was formulated on the orders of the Supreme Court in 2018. “Now, the manufacturers may again face bureaucratic difficulties and it may open another long streak of cases, wasting the time and resources of not only the government and manufacturers but our judicial system also,” the official said.

In Pakistan, private spending accounts for 65 percent of total healthcare expenditure sourced through out-of pocket payments, international aid and religious or charitable institutions.

“Pharmaceutical spending accounts for less than 1 percent of the country’s GDP, comparable to levels in some neighboring countries but above that in some of the South Asian countries,” Pakistan Pharmaceutical Manufacturers Association said on its website.