ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has directed Ministry of National Health Services, Regulations and Coordination (MNHSR&C) to take provinces on board for revision of drug prices and conduct an analysis of strengths and weaknesses of DRAP and consider separating its regulatory and administrative functions to suggest fundamental reforms, well informed sources told Business Recorder.
The ECC, in its meeting on November 23, 2023, again rejected the summary of MNHSR&C, like it did on November 15, 2023 as the Ministry had opposed increase in PRPs of drugs as per recommendations of Drug Pricing Committee.
On November 15, 2023 Ministry of National Health Services, Regulations and Coordination briefed the ECC forum that Section 12 of the Drugs Act, 1975 and Section 7 of the Drug Regulatory Authority of Pakistan (DRAP) Act, 2012 empowered the Federal Government to fix Maximum Retail Price (MRP) of drugs to be sold in the market. Further, drugs price fixation mechanism had been detailed in the Drug Pricing Policy-2018 as amended vide Notification on July 15, 2020.
Drugs Pricing Committee (DPC) of DRAP constituted on August 5, 2013 was empowered to fix and review maximum retail prices of drugs subject to the approval by the Federal Government in pursuance of Islamabad High Court Orders of December 20, 2022 passed in W.P. No. 4199/2022 and order of December 19, 2022 passed by the Lahore High Court, Lahore.
DPC in its meeting held on 27th - 29th December, 2022 considered applications for increase in MRPs of drugs under hardship category.
In accordance with provision of Drug Pricing Policy-2018 and recommended increase in MRPs of 119 drugs. These recommendations were considered by the ECC in its meeting held on February 70, 2023 and ECC directed MNHSR&C to resubmit the case after analysis of the pricing and categorization of the medicines on the basis of lifesaving essential or others drugs.
Ministry of National Health Services, Regulations and Coordination further noted that these 119 drugs were analyzed on the basis of core list of World Health Organization(WHO) which represents a list of minimum medicines needed for a basic healthcare system, listing the most efficacious, safe and cost-effective medicines for priority conditions.
Priority conditionswereselectedonthebasisofcurrentandestimatedfuturepublichealth relevance and potential for safe and cost-effective treatment. Comparative statements of recommended prices of 119 drugs (52 essential drugs and 57 other drugs) with the prices in neighbouring countries were also submitted of February 21, 2023. Another summary of March 07, 2023 containing proposal for increase in MRPs of 4 drugs as recommended by the Drug Pricing Committee in its-meeting held on 13 and 14 October, 2O22 was also submitted.
Another summary on April 20, 2023 was submitted before the ECC for consideration of recommendation of Policy Board of DRAP for increase in MRPs of essential and other drugs on the basis of increase in consumer price index (CPI) from July, 2022 to April 7, 2023.
The Policy Board also suggested that hardship cases recommended by the Drug Pricing Committee under submission for approval from the Federal Government should be reviewed for adjustment. Accordingly, ECC approved the proposal April 28, 2023.
The Federal Cabinet in its meeting held on May 15, 2023 ratified the decision of ECC through circulation on May 15, 2023.
The ECC was also informed that DPC had also recommended increase in MRP5 of 90 drugs under hardship category in its 54th meeting held on 15 and 16, March, 2023 which were not submitted for consideration by the ECC in view of decision of the Policy Board.
After notification of increase in MRPs for essential drugs @ 14% and other drugs @20 % on May 19, 2023, DPC re-considered its recommendations of earlier meetings (52nd 53rd and 54th) along with new applications for increase in MRPs in its 56th meeting held on 21 and 22 June,2023.
After considering applications along with evidence submitted by the pharmaceutical companies and decision of Policy Board, DPC recommended increase in MRPs of 209 drugs (158 drugs from drugs recommended earlier in 52nd 53rd and 54th meetings and 51 new drugs) after adjustment for increase in MRPs under SRO 595(1)/2023 of May 19, 2023.
Moreover, under para 7 of the Drug Pricing Policy, 2018 since July, 2018, increases under CPI were @ 2.74% of essential drugs and 3.92 %for other drugs for FY 2018; 5.14 % for essential drugs and 7.34 % for other drugs for FY 2019, 7 % for essential drugs and 10 % for other drugs for FY 2020, 6.23 % for essential drugs and 8.9 % for other drugs for FY 2021 and 7% for essential drugs & 10% for other drugs for FY 2022 and increase inflation vide SR0.34(1)/2019 dated 10.05.2019 have been granted. Furthermore, under para 9 of the Drug Pricing Policy, 2018 price re-fixation under hardship category had also been granted from time to time vide SROs of December 31, 2018 and October 21, 2020 and September 3, 2021.
Ministry of National Health Services, Regulations and Coordination apprised that in the light of directions of ECC, the Drug Pricing Committee in its 56th and 57thmeetings held on 21 and 22June,2023 and 26 and 27 July, 2023 recommended/analysis increase in MRPs of drugs on the basis of core list of World Health Organization and showing percentage increase in MRPs of each were as follows: (i) increase in MRPs of 206 drugs (122 essential drugs and 84 others drugs); and (ii) increase in MRPS of 55 drugs (24 essential drugs and 32 others drugs).
Ministry of National Health Services, Regulations and Coordination also shared comparative statements of recommended MRPS of 122+24 essential and 84+32 other drugs with the pricing in neighbouring countries respectively.
It was noted that the Islamabad High Court, had issued Order on October 25, 2023 in Writ petition tiled M/s Tabros Pharma (Pvt) Ltd, Karachi Vs Federation of Pakistan through Secretary, M/o NHSR&C regarding hardship cases of various pharmaceutical firm wherein the court ordered that “...to the extent that the Policy has to be routed through the ECC.
Let the cabinet Secretary ensure that the matter is placed before the ECC which renders the decision on the same and the matter is then placed before the Federal Government in a matter that the decision is rendered by the Federal Cabinet within a period of two weeks. Let the Federal Government place on record the decision of the Federal Cabinet before the next hearing.
In the event that the order is not complied with and no decision is rendered by the Cabinet before the next date of hearing, let the Secretary, MNHSR&C and the Secretary Cabinet appear in person on the next date of hearing.”
Ministry of National Health Services, Regulations and Coordination argued that in view of prevailing dire economic conditions where cost of living expenses had witnessed steep rise as inflation rate during September, 2023 rose to 31.4% approximately (as per official web site of State Bank of Pakistan) and the increase already granted in drug prices, the proposed increase in MRPs of various drugs was surely to hit the poor hardest. Given the economic reasons and inflationary pressures, it was recommended that the ECC may not accede to the recommendations of Drug Pricing committee for increase in MRPs of drugs.
The ECC discussed the case threadbare. It was observed that no robust technical analysis was offered in the summary by the Ministry.
It was also observed that junior level officers attended the meetings of DPC instead of representation at appropriate level by the notified members. It was pointed out that there was no effective price control mechanism to keep check in the drug price hike in the country. DRAP representative assured the ECC that the issue of prices of the drugs under hardship category had been addressed up to August 2023on first come first serve basis and present cases were not considered before.
The forum observed that there was a dire need to review Drug Pricing Policy in a holistic manner, in consultation with all stakeholders.
It was also observed that although inflation is important consideration in price fixation but there are other important considerations in a professional price review analysis which should be kept in mind in order to make a balanced decision so that the pharmaceutical sector is not dis-incentivized.
It was also pointed out that MNHSRC should consult all the provinces on this important issue and bring a holistic technical analysis before the ECC in support of its recommendation after consultation with the stakeholders.
At the same time, it was also emphasized that there is need for reform in DRAP by analyzing its strengths and weaknesses and suggesting a way forward to make it a regulatory authority in true sense.
After threadbare discussion, the ECC directed Ministry of National Health services, Regulations and Coordination to carry out detailed empirical and fair analysis of the proposed increase of 262 medicines reviewing excessive increase in MRPs and submit viable recommendations thereon to the ECC by November 21, 2023.
The ECC also directed Ministry of National Health services, Regulations and Coordination to involve the Provincial Health Departments regarding increase in MRPS by the concerned DPC and ask them to ensure their representation in the DPCS at the level of Additional Secretary (BS-19) or above.
The ECC further directed that MNHSR&C should also conduct an analysis of strengths and weaknesses of DRAP and consider separating its regulatory and administrative functions to suggest fundamental reforms.
Copyright Business Recorder, 2023