Non-essential medicines: Deregulation helps boost pharma industry

KARACHI: The deregulation of non-essential medicines in early 2024 has brought significant positive changes to Pakistan’s pharmaceutical industry, enabling companies to set prices for drugs not listed on the National Essential Medicines List (NEML).

The policy aims to create a market-driven approach while addressing longstanding challenges in the sector, said experts.

This shift has provided much-needed flexibility to pharmaceutical firms, allowing them to adjust prices to reflect market conditions. By aligning prices with inflation and currency fluctuations, companies have managed to stabilize production of medicines that were previously at risk of becoming unavailable due to pricing constraints, the experts added.

Key examples included the resumed production of medicines like Paracetamol and Ibuprofen, which are now more readily accessible. However, the overall affordability of non-essential medicines remains tied to broader economic factors, such as inflation, energy costs, and increased corporate taxes.

In the last couple of years, Pakistan saw a shortage of many critical medicines. Patients were seen struggling even for medicines such as Ventolin. People were forced to buy medicines in the black market - at inflated prices. Smuggled and spurious drugs also seeped in the market as patients struggled.

The policy has also brought relief to manufacturers who had been struggling with operational losses. Improved pricing autonomy has allowed firms to better manage costs and explore product diversification, especially in the non-essential medicines segment.

While deregulation is widely regarded as a progressive step, its long-term impact is yet to fully unfold. Industry insiders suggest that additional measures, including reforms to tackle external economic challenges, will be essential to maximise its potential benefits.

“The deregulation of non-essential medicines is a step forward, enabling businesses to operate more effectively and signaling the government’s commitment to supporting the sector,” said Haroon Qassim, former chairman of the Pakistan Pharmaceutical Manufactur-ers’ Association (PPMA).

Smaller players and new entrants have also found opportunities in the more flexible regulatory environment, which encourages innovation and diversification. However, challenges persist, particularly for businesses navigating high production costs and economic instability.

Looking ahead, there are discussions on further deregulation or introducing hybrid pricing models to balance market freedom with public welfare. Industry stakeholders believe that such measures could attract investment, foster growth, and strengthen Pakistan’s position in the global pharmaceutical landscape.

While the reform is still in its early stages, it has set the tone for a more dynamic and self-reliant pharmaceutical sector. As the industry adapts to this new framework, its ability to address economic and operational challenges will determine the extent of its success.

Copyright Business Recorder, 2024