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SHC suspends DRAPs freeze on drug prices.

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KARACHI – A ruling was given by a divisional bench of Sindh High Court (SHC) headed by Justice Aqeel Abbasi, to suspend the freeze on drug prices placed by Drug Regulatory Authority Pakistan (DRAP). The ruling came in response to a constitutional petition filed by Pharma Bureau Pakistan Pharmaceutical Manufacturers Association (PPMA) and the Pakistan Chemist and Druggist Association (PCDA).

According to media reports; The Court, termed it unconstitutional and suspended the section 7 of new drug pricing policy formulated by Drug Regulatory Authority of Pakistan (DRAP), which was approved by the Economic Coordination Committee.

The Court termed it an attempt to circumvent an existing adjunction granted by SHC in a related matter. Section 7 is a clause which has attempted to retroactively freeze prices of drugs from October 31, 2013 to July 1, 2016.

Freeze on price increase is a violation of restraining order, passed by SHC and this arbitrary decision by DRAP to include section 7 in new drug policy would cause serious financial losses to manufacturers, as well as the importers of drugs. Therefore SHC has suspended section 7 till the next hearing.

The SHC clubbed the new petition filed by PPMA and PCDA on March 10 with the petition against withdrawal of 15 percent price increase granted by government through SRO-1002 November 27, 2013. Now this petition will be heard by Justice Aqeel Abbasi.

“Our stance has been that; the new drug pricing policy was to make important medicines affordable and available only to the rich, while the poor would suffer and get exposed to only substandard drugs”, said industry sources.

The SHC has rightly taken this decision of suspending clause 7 because DRAP is not honoring its mandate to work for availability of quality medicines to the masses in the country. Besides this freeze till July 2016 DRAP suggested price reduction of around 45 percent in drugs and that would prove highly devastating for people because companies that were already making drugs in loss, would close down their operations, reasoned a pharma official.

Pharmaceutical industry did not get any price increase since 2001. Hence this heavy cut in drug prices in the new drug pricing policy was to leave companies unable to continue with their production in Pakistan.

Drug prices in Pakistan are already the lowest in the region and the world as well, therefore more reduction in prices just for political mileage is incomprehensible and will surely prove dreadful for poor patients.

SRO-1038 in 1994 provided for annual price adjustments, based on a transparent formula (local inflation and exchange rates) and last such inflationary price adjustment, granted by Ministry of Health to manufacturers, was in 2001, while a few commercially un-viable products received a nominal price adjustment during 2001 to 2012.

According to government’s own calculation, industry should receive a price adjustment of 94 percent, an interim relief of 15 percent on a few select products was granted via SRO-1002 on November 27, 2013, with a promise that the balance would be addressed through a fair and transparent policy.

But just 48 hours later the price adjustment was withdrawn, against which the industry filed this petition.

March 28, 2015

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