Govt swings into action, takes away pharmaceutical companies' power to raise drug prices

ISLAMABAD: The government on Wednesday decided to abolish all sections of Drugs Pricing Policy taking away the powers of pharmaceutical companies to increase drug prices on their own, reported The News.

In line with the directives from Prime Minister Imran Khan, the government abolished all the sections of Drugs Pricing Policy, which clearly negates the Drugs Act 1976.

PM Imran had ordered a review of the Drugs Pricing Policy after the prices swelled in the last 10 months.

Under Para 7 of existing Drugs Pricing Policy, pharmaceutical companies had the powers to increase the prices of the drugs based on the consumer price index without approval from the ministry and to this effect ,they had to only inform the health ministry 30 days before about their decision with regard to increasing the price. 

Under the previous policy, it was mandatory to get approval from the ministry prior to issuance of the notification with regards to an increase in the prices of the drugs.

In a meeting of the federal cabinet on July 7, two cabinet members – Adviser to PM on Commerce, Textile and Investment Abdul Razak Dawood and Special Assistant to PM on Health Dr Zafar Mirza advocated saying that the powers should stay with pharmaceutical companies for increasing the prices of the medicines on their own, however, Secretary Heath Aamer Ashraf Khawaja vehemently opposed the cabinet members.

He endorsed the abolishing of the powers earlier vested with the pharmaceutical companies to increase prices, saying the powers to increase prices of drugs should remain with the DRAP (Drug Regulatory Authority of Pakistan) and the Ministry of Health. Khawaja also pleaded that the notification with regard to the increase in prices should be issued by the government of Pakistan.

According to the official documents, Mirza and Dawood opposed the move for doing away with the powers of pharmaceutical companies to increase prices of medicines, but on behalf of Ministry of Health, a summary was moved seeking omission of Para-7 of Drugs Pricing Policy 2018, but Mirza managed to get the summary dropped from the agenda of the federal cabinet meeting took up on June 24.

However, PM Imran on July 2, 2020, summoned an exclusive meeting with regard to fixing the prices of the drugs. In that particular meeting, the Ministry of Health had declared the powers of pharmaceutical companies to increase the prices as mentioned in the Para 7 of Drugs pricing policy as against the section 12 of Drugs Act 1976 saying that the Ministry of Health has the legal right to issue the notification for any raise in the prices of the drugs.

The two said cabinet members opposed the Health Ministry’s summary arguing that with the removal of the powers to increase prices, pharmaceutical companies would be left on the mercy of bureaucracy in the ministry.