Pharmaceutical companies seek ‘inflationary adjustments’ in medicine prices

Around 70 pharmaceutical companies on Monday wrote a letter to the government authorities seeking an increase in the medicine prices in Pakistan owing to significant rupee depreciation and surging inflation in the country.

According to the copy of the letter available with Business Recorder, the companies have urged the government to allow them to make inflationary adjustments in the maximum retail prices of medicines. They also cautioned that if the adjustment is not made, it would result in the inevitable collapse of the domestic pharmaceutical industry.

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Speaking to Business Recorder, former Pakistan Pharmaceutical Manufacturing Association (PPMA) chairman Mansoor Dilawar said “every company is sending separate letters to the relevant authorities.”

“Around 70 companies have already written letters to the leadership to communicate their grievances and a total of nearly 300 letters will reach the government in the next few days.”

The letters are addressed to the federal minister and secretary of Ministry of Health Services, Regulation and Coordination and CEO of Drug Regulatory Authority of Pakistan (DRAP).

The companies have apprised government officials uninterrupted availability of medicines in the country depended on smooth import of raw material.

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They said that the pharmaceutical industry has suffered a devastating blow since the outbreak of Covid-19 because prices of the active pharmaceutical ingredients, including the raw material used in the manufacturing of drugs, increased exponentially in the international market.

“Simultaneously, the cost of fuel, electricity, freight charges and packing material also witnessed unprecedented increase during the same period. It is also to be noted that rupee has devalued by more than 67% against the US dollar since July 2020,” the firms told the government in the letters.

The companies told the leadership that collapse of pharmaceutical sector could trigger non-availability of medicines to the patients and the general public.

To recall, the Consumer Price Index (CPI) rose by 27.6% in January 2023 compared to the same period last year. Moreover, rupee faced sharp depreciation of the last few sessions and the local currency closed at Rs275.3 against the US dollar on Monday.

Dilawar said that owing to the uncertain economic conditions, it has become completely unsustainable for firms to manufacture and ensure the availability of medicines beyond next seven days.

“There has been a consensus between the pharmaceutical companies that they will not be able to continue production if they are not allowed to increase prices.”

He also pointed out that over 100 factories have shut down over the past few months and “if the industry is not allowed to make price adjustments, many more will cease to operate”.