# E-DRUG: Drug Prices in Pakistan **URL:** \ **Category:** e-drug\ **Created:** [November 22, 1998, 11:15am UTC](https://talk.edrugplus.org/t/e-drug-drug-prices-in-pakistan/3889 "1998-11-22T11:15:54Z")\ **Posts on this page:** 1\ **Page:** 1
**Author:** ![zafar](https://avatars.discourse-cdn.com/v4/letter/z/dc4da7/32.png) [@zafar](https://talk.edrugplus.org/u/zafar)\ **Post date:** [November 22, 1998, 11:15am UTC](https://talk.edrugplus.org/t/e-drug-drug-prices-in-pakistan/3889/1 "1998-11-22T11:15:54Z")
E-DRUG: Drug Prices in Pakistan (cont) -------------------------------------- This is with reference to Mr. Keith Watson's defense to the pharmaceutical industry's demand for rise in medicine prices in Pakistan. TheNetwork appreciates Mr. Watson joining the discussion and putting across the industry's views on the issue. However, TheNetwork, would like to clarify certain points Mr. Watson has raised. The pharmaceutical companies' case for rise in drug prices in Pakistan sounds quite convincing as it is being presented. Yes, there had been currency devaluation, inflation etc. and as the economic turmoil continues there may be more difficulties in the future. Since around 80-90% of the people in Pakistan buy medicines out-of-their pockets and public health sector serves mainly the urban middle classes, the question of any increase in drug prices is a question of further shrinking of the people's access to medicines, a fact admitted to by Mr. Watson when he said "no one in the industry wants to raise the price for the sake of, because it inevitably affects the [sale] volume..." Since private sector is not sensitive to essential drug concept, I would not go into the issues of breakdown of types of "high quality" research products, the high price on which they are marketed and the way they are pushed in Pakistan. Rather, I would limit myself to clarifying certain facts put forward by Mr. Watson. He has made certain statements which are factually not correct and few others with which we have conceptual difference. In 1993 when the government, without having any infrastructure to monitor the prices in the marketplace, partially deregulated the prices by developing "controlled" and decontrolled" categories, it was not that the government wanted to control the prices of the "so-called essential drugs". It is yet not fully clear to us that what criterion the MoH used to categorize the drugs. It is clear from the following details about the controlled list: 1. More than 200 generics out of 821 dosage formulations (controlled list) are not mentioned in WHO Model List of Essential Drugs. 2. More than 100 generics out of 821 dosage formulations are not mentioned in Ministry's of Health's own National Essential Drug List. 3. Non-essential drugs like Terfenadine, Halofantrine, Lincocine, Enflurane, Metamizole, Acarbase, Brain Tonics, etc. are included in this list. 4. Essential drugs like Chlorpheneramine, Quinine, Aspirin, Ferrous Sulphate, Paracetamol Syrup, Indomethacine, Atropin, Prmethazine, Naloxone, Aminophyline, Ephedrine, Sucraltafe, etc. are surprisingly not included in the list. Mr Watson claims that the cost of production over the last five years increased by 90% due to 76% rise in inflation, 85% devaluation of rupee against USD and 10 per cent Customs Duty levied in 1996. Against this backdrop, he says that companies have only been allowed 21% and 29 % increase in the prices of controlled and decontrolled medicines, respectively, over the last five years. Despite such adverse economic factors, the MNCs recorded 2.6% after-tax-profit in 1997 (Pharma Bureau Fact Book). One really wonders how much profit these companies were earning five years ago? Mr Watson is simply covering up increases in prices beyond the raises given by the government over the last five years. TheNetwork is possession of a list of medicines with price increases as high as 468% since June 1993. We also have the list of medicines with price increases after November 1996, when the government froze prices. TheNetwork is currently carrying out an extensive price study for a period 1993-todate of Essential Drugs in Pakistan. The results will be made public soon. We have serious differences with Mr Watson's claim of drug prices "on average" lower in Pakistan than in India. But would he deny that 15 out of 21 most commonly used medicines in the world are cheaper in India than in Pakistan. This survey was conducted by Consumer International Asia-Pacific in 39 countries. TheNetwork believes that the government needs to address some fundamental issues in the health sector before even considering any price increase to the industry. We have time and again urged the government to: 1. Stick to Essential Drug Concept in the public sector and promote it in private sector to enhance people's access to the needed medicines. 2. Implement the National Drug Policy to have long-term reforms in the system. 3. Formulate a comprehensive Drug Pricing Policy with inputs from consumer groups 4. Check transfer pricing by MNCs. (Imports at competitive prices is also a requirement in Pakistan). And lastly, Mr. Watson calls stringent pricing controls by the government of Pakistan as "unfair, discriminatory and unconstitutional". We have serious objection to the usage of word "unconstitutional" as the price controls have legal shelter under the 1976 Drug Act and Article 3 of the Constitution. We fully understand that without fair returns on investments neither business can develop nor sustain. We believe that MNCs in Pakistan are surviving only because they are making reasonable profits. There is evidence available that by indulging in transfer pricing they are actually earning much more than they are claiming. We are not against fair price raise but before that the government should devise and implement policies that can best safeguard the interest of the people. Dr Zafar Mirza Executive Coordinator (TheNetwork) -- The Network (Association for the Rational Use of Medication in Pakistan) H.No. 60-A, Str. 39, F-10/4, Islamabad Ph. 281755; Fax. 291552 Email: zafar@arump.sdnpk.undp.org -- Send mail for the `E-Drug' conference to `e-drug@usa.healthnet.org'. Mail administrative requests to `majordomo@usa.healthnet.org'. For additional assistance, send mail to: `owner-e-drug@usa.healthnet.org'.