KARACHI, Pakistan – Issues surrounding drug pricing and government policies are challenges for not only Pakistan's domestic pharmaceutical companies, but also multinational corporations, providing further evidence the current pricing debate is not just a Western problem.

Speaking to BioWorld in Karachi, Zahid Saeed, president of the Pakistan Pharma Manufacturers Association (PPMA), said the country's $3.2 billion pharma manufacturing industry is growing at 15% annually, while its exports, now at $200 million, are continually on the rise. That is impressive, he said, given the bleak situation of the country's exports generally.

For the last two years, the industry has faced issues over pricing, working environment and strict government policies, Saeed said.

Pressures on Pakistan pharma manufacturers and the government were beefed up with the release earlier this year by the Drug Regulatory Authority of Pakistan (DRAP) of a new prices list covering more than 880 essential drugs. The government allowed pharmaceutical companies to increase the drugs' prices from 9% to 15%.

However, some drug companies are accused of taking advantage of that and raising their prices by more than the allowed amount – some by up to 50%. The cost of raw materials has also risen alongside government-driven increases in electricity prices (up 45%), gas prices (up 65%) and diesel prices (up 75%).

The drug pricing increase was made with the permission of Pakinstan's Supreme Court following a long decision-making process with the health ministry. If not for the increment, Saeed said, the pharma industry would go into deep losses, a majority of companies would close their manufacturing, and eventually the public would not get cheaper drugs at all.

New policy

Qaiser Waheed, another drugmaker, said Pakistan is among the most fortunate countries in the world when it comes to cheaper drug prices.

Waheed explained that prices of medicines in Pakistan had been frozen since 2002. That was the year in which the federal government allowed a 3% price increase on 821 molecules. After 13 years of dialogue and negotiations, the government in 2015 decided to allow the PPMA to increase prices by up to 15%. "It was the transitional increase, which was allowed till the policy level agreement," Waheed said.

On Nov. 14, 2018, the Chief Justice of the Supreme Court of Pakistan directed the federal government and the DRAP to constitute the board to evaluate the dollar/rupee devolution. It also established a Health Task Force for the drafting of the new pricing policy. On Jan. 10, a 15% price revision was approved for all medicines.

The Pharma Bureau of Pakistan is the alliance of international pharma companies. According to its spokesperson, Aysha Tammy Haq, "[In 2002], we had 38 multinational pharma companies, but due to lack of policy and other facilities, 18 have completely shut down their business in Pakistan and now we have only 20 multinational pharma companies."

She said that in 2013 the government announced an interim price adjustment on the basis of inflation, deciding on a 1.25% increase per annum. "But within 48 hours the then-prime minister of Pakistan had withdrawn the policy. Then we went to court and got the stay order [on the prime minister's decision]," she said. "With the passage of time and detailed research and analysis with government and all the stakeholders of pharma manufacturers, all are agreed on the policy, which we called Drug Value Policy 2018," Haq added.

Crackdown

Meanwhile, Minister for National Health Services Aamer Mehmood Kiani said that a crackdown has begun. So far, 226 medicines, manufactured by 59 companies and worth tens of millions of rupees, have been seized.

Pakistan's prime minister issued a 72-hour deadline to the PPMA for the withdrawal of medicine prices increased by more than 15%.

"The authority has also written to its provincial offices regarding this action and also [is] conducting a survey of medicine prices across the country," Kiani told BioWorld.

Further, he said the government had decided to introduce an online system through which people will be able to verify the prices of medicines. A spokesman for DRAP said that during a countrywide action against unauthorized and illegal price hikes on medicines, "we have registered cases against 28 pharmaceutical [companies and over] 300 medicines."