Govt orders review of existing drug pricing formula to ensure medicines are priced fairly

Govt orders review of existing drug pricing formula to ensure medicines are priced fairly

ISLAMABAD: The government on Monday warned that drug prices must not be increased without valid justification and ordered a review of the existing pricing formula to ensure medicines are priced fairly without creating unnecessary hurdles for patients, importers or the pharmaceutical industry. Economic Affairs Minister Ahad Cheema, who chaired a meeting of the Drug Regulatory Authority of Pakistan (Drap), directed officials to expedite the processing of pending drug-pricing cases after being briefed that their case-by-case evaluation was almost complete. The minister appreciated the progress and acknowledged the efforts of Climate Change Minister Dr Musadik Malik and Drap officials in completing the evaluation. Health Secretary Momin Agha, Drap Chief Executive Officer Dr Obaidullah Malik and other senior officials also attended the meeting. The meeting was also informed that sufficient quantities of the trivalent influenza vaccine recommended by the World Health Organisation (WHO) were available in the market. Drap had withdrawn the hardship case relating to the vaccine as its prices were controlled in the international market. Officials told the meeting that Drap was reviewing the existing drug-pricing formula and examining provisions that could hinder the determination of fair and accurate prices. Cheema suggested that Drap consider subscribing to specialised international databases on drug prices to strengthen independent assessment and provide more reliable benchmarks for pricing decisions. “Public facilitation should remain the government’s top priority,” he emphasised, adding that any increase in medicine prices without valid justification was unacceptable. The minister said price comparisons with other countries could provide useful benchmarks, but stressed the need for independent checks and balances in the pricing process. Cheema ordered that the pricing mechanism should remain people-centred while avoiding unnecessary barriers for importers and pharmaceutical companies. Pharma industry’s perspective Meanwhile, the Pakistan Pharmaceutical Manufacturers Association (PPMA) urged the government to engage industry in the formula review so that the outcome could be workable and sustainable. PPMA Vice Chairman Usman Shaukat told Dawn that the pharmaceutical industry fully shared the government’s objective that medicines must remain affordable and accessible to every Pakistani. “No responsible manufacturer seeks an unjustified price increase, and we welcome Senator Ahad Cheema’s direction to expedite pending pricing cases and to review the pricing formula. A fair, transparent and predictable mechanism serves patients and industry alike,” he said. “However, affordability and availability go hand in hand. The real threat to patients is not a justified price adjustment but a medicine disappearing from the shelf.” Shaukat noted that products become unviable when the cost of active ingredients, packaging, energy, freight and compliance rises — most of which is imported and relies on the dollar — and prices remain frozen for years. “Manufacturers are then forced to stop production, which creates shortages and pushes patients towards costlier imported alternatives, smuggled stock or spurious medicines,“ he explained. Shaukat said that the industry supports the use of international benchmarks and independent databases, provided comparisons account for the cost of doing business within Pakistan, high financing costs, exchange-rate exposure and the fact that Pakistani medicine prices are already among the lowest in the region. “Benchmarks should be a tool for fairness, not a ceiling that ignores input costs,” he highlighted. “PPMA proposes that the revised formula include a clear, time-bound and rules-based mechanism, including periodic CPI and cost-linked adjustments, so that hardship cases do not pile up and decisions are not delayed for years,” Shaukat added.