The Pakistan Pharmaceutical Manufacturers’ Association (PPMA) has refuted recent reports which claimed that medicine prices in Pakistan had increased by 15 times in just five years.
“This is absolutely an incorrect news,” PPMA chairman Tauqeer Ul Haq said while speaking to Business Recorder.
“The government increased essential medicine prices only one time in the past three years,” he maintained.
The development comes after the Pakistan Medical Association (PMA) launched a report titled ‘Health of the Nation 2024’, which led to reports that drug prices had been increased 15 times by successive goverments in just five years.
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The PMA represents doctors, and healthcare professionals in Pakistan, while the PPMA is a representative body for the pharmaceutical industry in the country.
Tauqeer Ul Haq elaborated that the medicine prices in the pharmaceutical industry had been fully controlled by the government till February 2024 and were not being increased unilaterally by the industry.
He said the government recently increased prices of 162 essential medicines after a gap of three years, adjusting the high inflation reading and exorbitant rupee devaluation of the three-year in one go.
“The three-year adjustments in one go gave impression the prices were increased exorbitantly, which is incorrect,” Haq explained.
He was of the view that the government increased prices of the essential drugs under the “hardship cases” after their cost of production surpassed the market prices, giving “serious losses” to the manufacturers and marketers.
“The then lower price of medicines, compared to their production cost, had caused shortage of medicines, created a parallel black market (enabling mafias to sell drugs at exorbitantly high prices), encouraged smuggling and increased sufferings by the patients.”
The drugs went out of stocks at pharmacies or available in black at significant higher prices were including for heart, anti-cancer, TB, insulin, epilepsy and other essential medicines.
The inflation and devaluation adjustments in the drug prices helped increasing production and supply of essential pharmaceuticals to the required level in the country, overcoming shortage of drugs in the markets and lessening sufferings of the people in Pakistan, according to PPMA chairman.
Haq further said the government deregulated prices of non-essential medicines, but has continued to regulate prices of essential drugs.
“The deregulation of non-essential medicines has created competition among their manufacturers, disallowing them to increase prices beyond true levels.”
The then full control of the government over pricing of both essential and non-essential drugs, high inflation reading, and exorbitant rupee devaluation agreed many foreign pharmaceutical firms to close their businesses in Pakistan.
Experts from the pharma have argued that deregulation of non-essential medicines in early 2024 brought positive changes to Pakistan’s pharmaceutical industry, enabling companies to set prices for drugs not listed on the National Essential Medicines List (NEML).
The policy aims to create a market-driven approach while addressing longstanding challenges in the sector, according to the experts.
Key examples may include the resumed production of medicines like Paracetamol and Ibuprofen, which are now more readily accessible.
However, the overall affordability of non-essential medicines remains tied to broader economic factors, such as inflation, energy costs, and increased corporate taxes.
Pakistan pharma sector has potential to boost medicine exports to $5 billion over the next few years, the United Business Group (UBG) – an alliance of businessmen belonging to the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) – said in a statement earlier this month.
The pharmaceutical sector’s value was estimated at $3.29 billion in the fiscal year 2023-24, with the actual exports totaling at $341 million in the year. The sector contributes over 1% to Pakistan’s gross domestic product (GDP) and saves around $2 billion annually through import substitution, according to UBG the statement.
“To realise the potential, the government should extend incentives to the pharma sector, ensure ease of doing business, and focus on increasing pharmaceutical exports through tariff rationalisation, trade-related investment, and institutional reforms,” it said.
