GlaxoSmithKline Consumer Healthcare, a subsidiary of GlaxoSmithKline Consumer Healthcare B.V, has declared a force majeure in the production of Panadol Tablets, Panadol Extra Tablets, and the Children’s Panadol Liquid Range.
According to a company filing on PSX today, the hit comes after the consumer healthcare giant sent letters to various government stakeholders regarding the critical issue of an extraordinary and rapid increase in paracetamol (raw material) prices in Pakistan.
The company, a member of the Haleon group, has appealed to the federal government “to accord approvals for the adjustments to the selling price(s) of the captioned Panadol range of products, all of which are Paracetamol based”.
The company statement read, “We had obtained the approval in the 50th Drug Pricing Committee (DPC) of the Drug Regulatory Authority of Pakistan (DRAP), held on 12 January 2022 which were recommended by the DPC for the approval of the Cabinet. But, according to media reports, the same have been rejected after a prolonged delay by the latter without any intimation of reason(s) given to the Company”.
“Also, although the company has received a routine Consumer Price Inflation (CPI) adjustment for the year 2022 from DRAP on 25 August 2022, the same is not commensurate with the debilitating increase in the prices of the raw material of Paracetamol,” it explained.
Clarifying further ambiguities related to it in the space, the company said it “has been an integral part of the pharmaceutical/industrial sector and has made substantial contributions to the economic growth and stability of Pakistan. We have created thousands of jobs, pay taxes, and save Pakistan foreign exchange through import substitution or earned for Pakistan as a result of the exports of its products”.
The Company says it is proud to supply reliable, efficacious, and high-quality products with an established safety profile, which have become household names, with the captioned Panadol range being no exception. “As a responsible corporate citizen, the Company holds the trust of its patients, consumers, healthcare practitioners, shareholders, and all other stakeholders in the highest of regard,” it added.
During the last twelve (12) months, the Company produced nearly 5,400 million tablets of Panadol 500mg and Panadol Extra to serve its customers, consumers, and patients in need. The statement mentioned how GSK played a critical consumer/patient-focused and responsible role during the COVID-19 pandemic, dengue fever crisis, and floods across Pakistan by ensuring continuous supplies of the Panadol range despite incurring heavy financial losses due to a surge in the price of Paracetamol raw ingredients and in the absence of due approval by the federal government of the recommendation of the DPC/DRAP.
“We are one of the few multinational companies left operating in the country. However, due to the challenges stated above, manufacturing of the Panadol range on negative margins is unsustainable, and despite exhaustive efforts of the Company to mitigate this matter through dialogue, the situation is now beyond our control. We are thus forced to declare force majeure regarding the production of Panadol Tablets, Panadol Extra Tablets and Children’s Panadol Liquid Range,” the company declared.
The company remains keen to meet stakeholders in order to resolve the situation. “We urge the Federal Government to take urgent action to rationalize the prices of the impacted Panadol range commensurate with the increase in the price of the impacted raw material and as recommended by the Drug Pricing Committee of the Drug Regulatory Authority of Pakistan, so as to enable the Company to continue supporting the government to ensure an ongoing supply to all patients and consumers in need,” it concluded.
