The incumbent government appears unable to come to grips with the escalating price spiral and is unwisely contributing to it getting wider. While people are hard-pressed about rising prices and are mortified about the impending price hike that will hit them in Ramzan, the government has approved increase in prices of medicines by 15% that will cause further hardship to people. The most harmful blow is the increase in prices of 463 hardship medicines that have gone up by nearly 200 per cent. This increase is rated as the highest in four decades and is surely going to affect a large number of people. The dealing agency, Drug Regularity of Pakistan (DRAP), has lamely justified the increase by citing a decision of the Supreme Court of Pakistan delivered in November 2018.
It is surprising to observe the antics of DRAP that initially announced adjustment of prices of 889 medicines in December 2018 in which it reduced prices of 395 brands but increased prices of 463 medicines that fall into hardship categories to 200 per cent based on their cost of production and formula prices. Besides, DRAP also allowed to further increase the prices of these 463 medicines up to 9 per cent due to the increasing dollar rate. This method means that DRAP gave approval to increase the prices of 463 medicines twice in one go.
DRAP perfectly knew that its action will encourage the pharmaceutical sector to increase prices and it will do it arbitrarily not abiding by the 15% moratorium agreed officially. This is precisely what happened as pharmaceutical companies increased the prices by extra 15 per cent without approval of the regulatory body. There is something seriously wrong with the pricing mechanism of DRAP whose head was recently sacked for being very dubious in character.
There are 65,000 medicines registered with DRAP out of which 45,000 medicines are available in the Pakistani market. Though the notification of surge in prices is for all the 45,000 medicines, however, it could be around 2,000 to 3,000 whose prices have been increased until now. The rest of the medicines may increase their prices at the time of production of new batch. This is the catch because the pharmaceutical sector would blame the increase on depreciated rupee although the orders for a new batch were processed earlier than the depreciation.
DRAP has already passed the buck on to the apex court and has stated that it parleyed with medicine companies on the judicial instructions. It was described that initially the medicine companies and DRAP finalised the pricing formula for the medicines that fall in the hardship category. Since each medicine’s case was discussed separately, therefore, the ratio of increase is also different for each medicine. DRAP claimed that pharmaceutical companies were demanding increase in medicine prices since last many years prompting the apex court directing DRAP to formulate a pricing mechanism after which the decision of increase in medicine prices was taken.
DRAP tried to claim credit for holding on to public interest by not agreeing to the demands of the pharmaceutical sector to increase prices by 34% and allowed them to increase the prices by 15 per cent only. The claims of DRAP were confronted by seasoned chemists who expressed astonishment at such an abrupt decision regarding increase in process and mentioned that they had not experienced such a measure in the last 40 years. They confirm that the average increase ranges close to 100% despite DRAP claims of allowing only 15%.
It is also mentioned that 70% of the medicines whose prices have been increased up to 200 per cent are being manufactured by multinational companies and it is predicted that the remaining companies will increase the prices gradually and this will further worsen the situation. The inflated prices of essential medicines have been increased due to which it has become more difficult for regular individuals to purchase medicines for heart and diabetes patients.
Aware of the mounting criticism, DRAP, federal minister for National Health Services, Regulation and Coordination Aamir Mehmood Kiyani has announced to take action against the pharmaceutical companies who have increased the medicine prices illegally. He mentioned that a crackdown has already been launched against profiteers and in this connection 226 medicines worth tens of millions of rupees, manufactured by 59 companies, have been confiscated by the government over the last few days. These companies were selling medicines at prices higher than the maximum retail prices (MRPs) due to which the DRAP was directed to act against these firms. The minister confirmed that operation against profiteers have been launched in Karachi, Lahore and Peshawar. TW
Muhammad Rafiq is associated with trade and industry