Government has given in to pharmaceutical companies’ demands and approved a new policy which will result in increased prices of life saving drugs.
Previously, life-saving drugs were priced according to the Drugs Pricing Policy of 2015. However, due to several reasons the policy has been amended.
The main purpose behind the surge in prices is that the government wants to avoid court cases by pharmaceutical companies at the expense of consumers.
As part of its new drug policy, the government has linked the hike in prices of drugs to Consumer Price Index (CPI). Pakistan Bureau of Statistics (PBS) calculates CPI based on which the increase in prices is calculated.
In short, the prices of the drugs will be subject to change based on the inflation rate in the country.
Background of the Case
After the policy that prices will be adjusted based on CPI of previous fiscal year was announced, some companies increased the prices of life saving drugs.
The Drug Regulatory Authority of Pakistan Act 2012 allows federal government to regulate retail prices of drugs in the market. Based on this, last year, the government advised pharma companies not to increase the prices for now as some companies increased prices based on 4.16% CPI in July of 2017.
This led to a difference of opinion between the government and pharma companies. As a result, two companies decided to take the case to Sindh High Court and settle matters there. The court ordered Drug Pricing Committee to conduct a meeting within 20 days. The court’s decision came out on 24th Aug’ 2017.
The committee held the meeting on 8th September and recommended that Drug Pricing Policy 2015 be followed to increase drug prices.
The Increase in Prices
The cabinet in its meeting decided that drug price hikes will be automatic from now on based on CPI. If any confusions or difficulties arise, the cumulative effect of prices will be passed on to the consumer. Hence, the government has avoided going to court with the pharmaceutical companies.
According to the Committee’s recommendations, prices of drugs will be increased:
- Scheduled drugs prices to be increased by 2.08%
- Non-scheduled drug prices to be increased by 2.09% and
- A huge increase on 4.16% in the price of low-priced drugs.
- Increase in threshold limit of low-priced drugs by 1.43% for 2015-16 and 2.08% for the year 2016-17.