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  Hiked drug prices. Who belled the cat?

 Rise in drug prices must to ensure survival of the pharma industry

The rise in drug prices including approved 15% has drawn palpable hue and cry from the masses.

Drug Regulatory Authority of Pakistan through SRO 34(I)/2019 issued in January 2019 notified an increase of 9% over and above maximum retail price (MRP) of medicines in hardship cases i.e. drugs with cost of manufacturing exceeding market price; and 15% on all remaining medicines (excluding medicines included in the former clause) registered with the authority. It is alleged that a few pharmaceutical companies increased drug prices up to 24 per cent, as they considered both 15% as well as 9% increase under hardship cases applicable in their cases, whereas some went overboard in taking undue advantage of the changing situation and hiked the prices at an unbelievable rate, ranging from 40% to a whopping 100% and beyond.

The sudden rise in drug prices caused great distress and drew a lot of flak especially from low- and middle-class patients that were on regular medication. People with budgets set for weekly/monthly medicine supplies are now distraught over being unable to afford a basic necessity and human right ever since the exorbitant rise in drug prices.

The Lahore High Court (LHC) intervened by directing the Drug Regulatory Authority of Pakistan (DRAP) to submit its reply, in a plea challenging any recent increase in medicines’ prices.

It may be pointed out that on January 31st the Peshawar High Court (PHC) stayed the implementation of 15 per cent increase in medicine prices. The two-member PHC bench issued a stay order as it heard a petition challenging the price hike on the basis of Articles 9 and 14 of the Constitution.

According to reports, the price hike would impact the rate of some 24,000 medicines including life-savings drugs, such as medicines for heart ailments, brain diseases, cancer, children’s diseases and post-surgical drugs etc.

In a press conference held recently in order to address the overwhelming protesting remarks over the hike in drug prices, Pakistan Pharmaceutical Manufacturers’ Association (PPMA) informed that the price increase of medicines was in conformity with the directions of apex judiciary on the issue. The PPMA said that they had followed the government’s order to increase the prices of locally produced medicines by 15%, which was a necessary move for the survival of Pakistan’s pharmaceutical industry that had been struggling to produce quality drugs at affordable prices in the face of damaging economic and business influences in Pakistan.

Central Chairman of PPMA Zahid Saeed was addressing the press conference, accompanied by other representatives of the Pakistani Pharma industry.

The PPMA chairman said that the increase in prices of medicines had been ordered after following all the due procedures, formalities, regulatory framework, and in accordance with the latest Drug Pricing Policy of the government. “Pharma is a regulated industry and cannot increase the prices without DRAP’s approval,” he said.

He went on to explain that the 15% hike in locally produced drugs was critically essential for the survival of the industry and subsequently the public healthcare system of the country. He reminded the audience of how several locally manufactured medicines had virtually vanished from the market earlier, culprit being the frozen drug prices for over a decade; the government would not allow review on drug prices, while just parallel to the scenario their cost of production kept on increasing. Eventually, the local production simply became infeasible for the Pharma industry. As a result the population was deprived of many locally made important medicines. He said that in such a situation it had become utterly difficult for local and foreign drugs’ companies to introduce new medicines in the Pakistani market.

Apart from 15% increase in prices of medicines, the Drug Regulatory Authority of Pakistan had ordered 9% increase in prices of 450 medicines, all falling in the category of extreme hardship; these essential drugs required special consideration to ensure their continuous local manufacturing as their cost of production had gone up phenomenally during last 10 years due to various economic and business factors. Chairman PPMA assured that the increase in prices of these hardship medicines had also been well in accordance with Drug Pricing Policy 2018 and earlier directions of the Supreme Court on the issue.

In an attempt to instill understanding and reason among the concerned parties, the chairman shared the fact that with merely 7% indigenous production of pharmaceutical raw material, Pakistan had to import more than 90% of raw material from India, China and Europe, which had become more and more financially exhausting due to the unprecedented growing disparity between rupee and dollar. “Meanwhile, electricity tariff increased by 45 percent since 2018; the natural gas bill increased by 65 percent, while diesel price also increased by 95 percent. All these factors also directly affect the cost of our production,” the PPMA chairman added.

He said one should keep in mind that locally produced drugs in Pakistan had the lowest prices as compared to the rest of the world.

Chairman Zahid Saeed complained about the media’s irresponsible role, wherein the price hike was being mispresented as a villainous act on the pharma industry’s part. In his comment regarding the media’s interference, he said, “Media have done reporting in such a manner as if there has been ordered an unprecedented hike in the prices of medicines. It is our duty to inform you that such negative propaganda could compel the Pakistani Pharma industry to move outside the country as have been the case of multi-national drugs’ manufacturers.

“Before criticizing the recent increase in prices of medicines, the beneficial role being played by the Pakistani pharma industry in terms of saving precious foreign exchange reserves of the country and generating sizeable employment opportunities for qualified youth of Pakistan should be regarded and appreciated.”

The PPMA chairman said that survival of the Pakistani pharmaceutical industry had been equally beneficial for all the concerned stakeholders including the government, the public healthcare system, regulatory authorities, and most importantly ailing citizens of the country who required quality medicines at affordable prices.

PPMA chairman affirmed that there sure were some black sheep in the industry that had illegally increased prices of medicines over and above the recently approved increase.

Federal Health Minister Aamir Kiyani has taken notice of the situation and has assured the effected that he would personally be looking into the matter. He said that strict action would be taken against the unauthorised increase in prices of medicines by pharmaceutical companies, after the Ministry received some complaints that unscrupulous elements in pharma industry have increased prices of their drugs over and above the approved maximum retail prices (MRPs) by the federal government. In case of non-compliance, legal action will be taken against violators under the Drugs Act, 1976, DRAP Act 2012 and other framed rules.

After public’s display of dissent and protest, and notice from the high court, a countrywide crackdown has commenced against any pharmaceutical company involved in selling drugs above the permitted rate. Medicines of TB, diabetes, heart, hepatitis, cancer, gynae and female hormonal medicines, antibiotics, multi-vitamins, and others witnessed a sharp increase of over and above 15 per cent, ranging from 40 to 100.

As a result of DRAP’s activity, production of 226 medicines worth tens of millions of rupees, which include common use medicines to life saving drugs, was seized on account of illegal and unethical retail pricing. A DRAP spokesperson revealed that over 59 pharmaceutical companies have been heavily fined over this issue

Senior Drugs Inspector Islamabad Sardar Shabbir Ahmad seized several medicines with massive price variation from different medical stores in the federal capital.

A DRAP official informed that the authority has advised to monitor MRPs in the market and ensure that MRPs of drugs were not higher than the prices notified in a notification issued by DRAP.

Commenting on the ongoing situation, the Drug Lawyers’ Forum Chairman Noor Muhammad Mehr remarked that the DRAP’s affairs lacked transparency as it had neither displayed the total number of registered drugs nor retail prices of the medicines on its website. “There is no mechanism for drug inspectors to check pharmaceutical companies’ violation in compliance of maximum retail price as notified by DRAP,” he regretted.

As per a spokesperson, DRAP has been working on updating the list of over 75,000 registered drugs along with MRP; the process of which would take its due time.

Young Doctors Association (YDA) Pakistan General Secretary Dr Salman Kazmi said that the inadvertent across-the-board increase in prices of medicines might endanger the lives of poor patients due to either unavailability or availability of drugs at exorbitant rates beyond their buying capacity. The patients with cardiac diseases and diabetes are at risk due to unavailability of lifesaving drugs, which are now beyond the reach of a common man, he added. He urged DRAP to engage IT Ministry and Punjab Information Technology Board (PITB) to develop a Mobile App to make registration and pricing transparent as well as to stop over-the-counter sale of medicines without doctor’s prescription at medical stores.

Speaking on the raised issue, Deputy Director Quality Management System DRAP, Akhtar Abbas, categorically denied 100% increase in drug prices. However, he admitted that some pharmaceutical companies had illegally increased the prices of certain brands. He assured that such culpable act would be strictly dealt with in accordance with the law.

April 10, 2019

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