Govt orders review of existing drug pricing formula to ensure medicines are priced fairly

Why This Matters

Key context: <p>ISLAMABAD: The government on Monday warned that drug prices must not be increased without valid justification and ordered a review of the existing pricing formula to ensure medicines are priced fairly without creating unnecessary hurdles for patients, importers or the pharmaceutical industry.</p> <p>Economic Affairs Minister Ahad Cheema, who chaired a meeting of the Drug Regulatory Authority of Pakistan (Drap), directed officials to expedite the processing of pending drug-pricing cases after being briefed that their case-by-case evaluation was almost complete.</p> <p>The minister appreciated the progress and acknowledged the efforts of Climate Change Minister Dr Musadik Malik and Drap officials in completing the evaluation.</p> <figure class='media w-full w-full media-- media--embed media--uneven media--tweet' data-original-src='https://x.com/PTVNewsOfficial/status/2114718649168928777'> <div class='media__item media__item--twitter '><span> <blockquote class="twitter-tweet" lang="en"> <a href="https://twitter.com/PTVNewsOfficial/status/2114718649168928777"></a> </blockquote> </span></div> </figure> <p>Health Secretary Momin Agha, Drap Chief Executive Officer Dr Obaidullah Malik and other senior officials also attended the meeting.</p> <p>The meeting was also informed that sufficient quantities of the trivalent influenza vaccine recommended by the World Health Organisation (WHO) were available in the market.</p> <p>Drap had withdrawn the hardship case relating to the vaccine as its prices were controlled in the international market.</p> <p>Officials told the meeting that Drap was reviewing the existing drug-pricing formula and examining provisions that could hinder the determination of fair and accurate prices.</p> <figure class='media w-full w-full media-- media--embed media--uneven media--tweet' data-original-src='https://x.com/eadgop/status/2114742520811061529'> <div class='media__item media__item--twitter '><span> <blockquote class="twitter-tweet" lang="en"> <a href="https://twitter.com/eadgop/status/2114742520811061529"></a> </blockquote> </span></div> </figure> <p>Cheema suggested that Drap consider subscribing to specialised international databases on drug prices to strengthen independent assessment and provide more reliable benchmarks for pricing decisions.</p> <p>“Public facilitation should remain the government’s top priority,” he emphasised, adding that any increase in medicine prices without valid justification was unacceptable.</p> <p>The minister said price comparisons with other countries could provide useful benchmarks, but stressed the need for independent checks and balances in the pricing process.</p> <p>Cheema ordered that the pricing mechanism should remain people-centred while avoiding unnecessary barriers for importers and pharmaceutical companies.</p> <h2><a id="pharma-industrys-perspective" href="#pharma-industrys-perspective" class="heading-permalink" aria-hidden="true" tabindex="-1" title="Permalink"></a>Pharma industry’s perspective</h2> <p>Meanwhile, the Pakistan Pharmaceutical Manufacturers Association (PPMA) urged the government to engage industry in the formula review so that the outcome could be workable and sustainable.</p> <p>PPMA Vice Chairman Usman Shaukat told <em>Dawn</em> that the pharmaceutical industry fully shared the government’s objective that medicines must remain affordable and accessible to every Pakistani.</p> <p>“No responsible manufacturer seeks an unjustified price increase, and we welcome Senator Ahad Cheema’s direction to expedite pending pricing cases and to review the pricing formula. A fair, transparent and predictable mechanism serves patients and industry alike,” he said.</p> <p>“However, affordability and availability go hand in hand. The real threat to patients is not a justified price adjustment but a medicine disappearing from the shelf.”</p> <p>Shaukat noted that products become unviable when the cost of active ingredients, packaging, energy, freight and compliance rises — most of which is imported and relies on the dollar — and prices remain frozen for years.</p> <p>“Manufacturers are then forced to stop production, which creates shortages and pushes patients towards costlier imported alternatives, smuggled stock or spurious medicines,“ he explained.</p> <p>Shaukat said that the industry supports the use of international benchmarks and independent databases, provided comparisons account for the cost of doing business within Pakistan, high financing costs, exchange-rate exposure and the fact that Pakistani medicine prices are already among the lowest in the region.</p> <p>“Benchmarks should be a tool for fairness, not a ceiling that ignores input costs,” he highlighted.</p> <p>“PPMA proposes that the revised formula include a clear, time-bound and rules-based mechanism, including periodic CPI and cost-linked adjustments, so that hardship cases do not pile up and decisions are not delayed for years,” Shaukat added.</p> This development from dawn.com highlights ongoing changes in the sector.