E-drug: Deregulation of the pharmaceutical sector in Pakistan
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Press Release
Deregulating the pharmaceutical sector in Pakistan: A great
threat to public health
April 23, 2002
TheNetwork for Consumer Protection has shown very serious
concerns on the move by the government, under pressure of the
pharmaceutical industry, to deregulate the pharmaceutical sector.
To begin with, a case for deregulation of medicine prices has been
developed. Multinational pharmaceutical companies working
hand-in-glove with the Ministry of Commerce, Industry and
Production have been lobbying hard for quite some time for
de-regulation of prices. TheNetwork see this as a conspiracy
hatching against the poor and sick citizens of the country. Dr. Zafar
Mirza addressing a press briefing today lashed the government on
not fulfilling its responsibility in providing health care to the needy
on the one hand and on the contrary taking measures which will
bring more miseries to the people.
He alarmed the people and civil society at large in Pakistan about
the coming difficult times if this deregulation policy will be formally
adopted by the government. "People will forget the GST on
medicines as they are going to witness much more price increase
than 15%. We have witnessed the havoc created by partial
deregulation of medicine prices in June 1993 where despite the
'gentleman promise' of pharmaceutical companies not to increase
prices more than 20%, the actual recorded increase in some cases
was more than 200% and then the Government had to freeze the
prices of medicines as a result of the public outcry."
Poor sick people in Pakistan are victims of inefficient, short-sighted
and unaccountable bureaucrats who are the real policy makers and
the profit hungry corporate sector. The meeting on 21st April 2002
in the MoC epitomizes this confluence where officials of the
Ministry agreed with industry representatives on deregulation of
drug prices. Interestingly, this time MoH is almost completely being
bypassed by the Ministry of Commerce although the lame-duck
MoH is trying hard to regain the trough. It is very interesting to note
that the companies which were fighting hard against GST are now
ready to accept it provided they are given free hand in deciding the
prices of medicines. So all their claims about consumers' difficulties
in having access to medicines fall flat on their face.
One should remember that the pharmaceutical sector is a regulated
sector all over the world. The principles of free market economy
cannot be applied blindly on this sector. There are established
market failures and hence the need for intervention. A recent study
in the OECD countries has once again shown how prices of
medicines are directly or indirectly regulated in these countries.
The real issue is the proposed macroeconomic framework and then
its ruthless application in all the sectors.
Dr. Zafar proposed a formulation of national committee with all the
stakeholders, including consumer organizations, represented on it.
The committee should first study in detail the impact of
deregulation policies, look at the system in other countries and
draw lessons from the experience of deregulation in developing
countries and then make recommendations to the government.
He also pointed towards serious problems being faced by the
people because of ill conceived and implemented GST policy. The
list of "life-saving medicines" is fraught with problems; government
has not made public the criteria upon which drugs were included or
excluded from the list; sever shortages are being witnessed in the
market and both sellers and consumers are not sure about the
actual modus operandi of the policy. He urged the government to
rethink about the policy and preferably lift the GST imposition from
all the medicines or at least extend exemption from all the essential
drugs according to the National Essential Drug List.
Azhar Hussain
Project Coordinator Pharmaceuticals
TheNetwork for Consumer Protection
40-A, Ramzan Plaza, G-9 Markaz
Islamabad
Pakistan.
Tel:00-92-51-2261085
Fax:00-92-51-2262495
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