The pharmaceutical industry in Pakistan is facing an acute shortage of critical medicines due to a simmering price dispute with the Health Ministry. In addition, the industry is grappling with rising production costs resulting from skyrocketing inflation and the devaluation of the local currency in recent years.
Pharmaceutical companies are demanding a 38% increase, which the government has rejected, prompting them to either stop or go into a limited-scale production of scores of essential and non-essential medicines. Importers have also stopped or drastically reduced the imports of about 100 crucial medicines, including those related to general anesthesia, plasma-derived products, vaccines, oncology products, and biological products, causing a shortage of medicines nationwide.
According to Abdul Samad, an office-bearer of the Pakistan Chemist and Drugs Association, some medicines are either not being imported or are available on a limited scale due to legal bindings that prevent importers from completely stopping the importation of medicine for which they have been granted a license. Therefore, most importers import a minimum quantity of essential and non-essential medicines to keep their licenses intact. However, it is no longer profitable due to the huge devaluation of the rupee against the dollar.
The rising prices of products on the international market, primarily because of the coronavirus pandemic and the Russia-Ukraine war, have also contributed to the problem, mainly due to an unprecedented rise in global inflation. Additionally, increasing costs of fuel, electricity, freight charges, cold chain maintenance, packing material, and a cumulative 4% non-adjustable sales tax at the import stage have seriously jeopardized the sustainability of the medicine business.
Farooq Bukhari, chairman of the Pakistan Pharmaceutical Manufacturers Association, has defended the demand for an inflationary price adjustment, which he claims is a must due to a dollar-rupee disparity and skyrocketing inflation. However, if the government does not bow to the manufacturers’ “logical” demand, he warns that pharmaceutical companies would be compelled to shut down their units, risking more than 1 million jobs.
However, the government has set up a committee led by Finance Minister Ishaq Dar to address the issue. Health Ministry spokesman Sajid Shah says the government is fully aware of the situation and will decide to keep the masses and the pharmaceutical industry’s interests in view.
The Pakistan Medical Association (PMA) opposes the idea of inflating prices, though it acknowledges the problems the pharmaceutical industry is grappling with. Instead, PMA President Dr. Usman Mako suggests that the government and the pharmaceutical industry share the burden of inflation and rupee devaluation.
