Medicine importers face huge losses due to rupee devaluation

KARACHI: Pharmaceutical sector is expecting a severe shortage of lifesaving medicines in the country as the importers of finished pharmaceutical products suffer losses to the tune of billions due to uncertain rupee-dollar parity, pharmaceutical importers told Business Recorder on Tuesday.

The importers of finished pharmaceutical products have suffered a devastating blow due to the massive devaluation of the PKR, which is to the tune of 78% from July 2020 till date.

They said that moreover the prices of products in the international market have also gone up due to various reasons, the main causes of which have been the Covid 19 pandemic, the Ukraine war, and an unprecedented rise in global inflation.

In a letter written to Drugs Regulatory Authority of Pakistan (DRAP), the Pakistan Chemists and Druggists Association (PCDA) highlighted the factors emerged due to ailing economy like cost of fuel, electricity, freight charges, cold chain maintenance, packing material, and the imposition of a cumulative 4 percent non-adjustable sales tax at the import stage. These factors are disastrous for sustainability of business, when the ceiling prices have been fixed by the DRAP, they said.

The letter reads: “The Cap of three years on hardship cases, as per the amended 2018 pricing policy, needs to be readdressed”.

The letter further said the devaluation of the PKR has been extremely critical, and there is no set formula or prediction how the PKR will behave. Historically, once a new high is reached, the PKR has never retreated. Imported products, especially, general anaesthesia, plasma derived products, vaccines, oncology products, specialty hormones, and cardiac enzymes/ heparin, have been greatly impacted. In absence of these products, which is now a ground reality, there would be a definite medical disaster. These products are not locally manufactured, and they are 100% impacted by devaluation.

Based on documentary evidence, the pharma dealers demanded they should be allowed to apply for hardship, as and when required. “As there is a Force Majeure situation that the importers are presently facing, there needs to be an across the board price allowed as an interim relief. Products that have become unviable today cannot be imported as they are not viable. The losses being borne by our members in public and private sector tenders is another factor why they are unable to continue supplies”, the letter said.

Copyright Business Recorder, 2023