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Published Date: Aug 2, 2018

Senate panel displeased by difference between drug prices, manufacturing costs

ISLAMABAD: The Senate Standing Committee on National Health Services expressed displeasure with the difference between medicine retail prices and their manufacturing costs during a meeting on Wednesday.
“As per Drug Regulatory Authority of Pakistan (Drap) records, a medicine manufactured at a cost of just Rs42 is sold in the market for Rs511. Another medicine’s [manufacturing] cost is Rs50, but it is sold for Rs750. There are many other such examples, which is unfair to the poor because they cannot afford the medicines,” the committee chairman, Muttahida Qaumi Movement Senator Mian Ateeq Shaikh, said before Drap officials at the meeting.
Drap Pricing Director Amanullah initially said some medicines of the same formula were being sold for Rs320, but then admitted that the innovator was selling for Rs511 while the cost of production according to Drap estimates was around Rs42.
Senators criticise Drap for ‘routinely’ increasing prices
Multinational pharmaceuticals companies have recently faced allegations that they have been transferring foreign exchange out of the country by over-invoicing, leading not only to a loss of foreign exchange for Pakistan but also to companies selling medicines at higher rates by showing high production costs.
ARTICLE CONTINUES AFTER AD Committee members voiced displeasure with media reports that the prices of 10,000 medicines had been increased, and directed Drap to prioritise cheaper medicines.
Pakistan Tehreek-i-Insaf Senator Samina Saeed said it was unacceptable for Drap to raise prices from time to time, while Senator Shaikh said Drap had made it routine to increase medicine prices.
He said that while the committee did not want to spoil business for the pharmaceutical industry, there should be a mechanism to increase medicine prices.
Senator Dr Ashok Kumar from the National Party said it was unfortunate that Drap was not controlled by the government and parliament.
After a meeting, a Drap official who was not authorised to speak on the record told Dawn that although the committee chairman had wanted to say there was a flight of money by over-invoicing, a number of things have to be considered before concluding that pharmaceutical companies are sending foreign exchange out of the country.
“First of all the quality of raw material should be observed. How raw material that is imported from Europe or American can be compared to raw material imported from India and some Chinese companies, as there are good companies but also substandard companies in China,” he said.
“How raw material is transported to Pakistan is also observed, as it can be transported by air or by sea. Some companies make quality raw material and others do not, so it affects the prices and as a result the cost of the medicine also increases.”
He added: “Although some people believe that all the medicines being sold in Pakistan should be sold at the same prices, it is not possible because if we force multinational companies to sell medicines at the prices of local manufacturers, they will wind up their set-ups because it would not be viable for them. However, if committee makes a policy to go for the cheapest medicines, we will implement it.”
In the last 13 years, 11 out of 35 multinational companies have left the country after either winding up their businesses or selling their plants to local companies. Such companies include Merck Sharp, Dohme (Pakistan), Bristol Myers Squibb, ICI, Roche Pakistan and Johnson and Johnson.
Mercury in dental fillings
During a briefing on the use of mercury in dental fillings, health experts told the Senate committee that the use of mercury is injurious to health.
The committee directed a think tank, the Sustainable Development Policy Institute (SDPI) and the health ministry to sit together and address the issue.
SDPI recently launched a study detailing the hazards of using mercury in dental fillings and demanded a ban or restriction on the use of mercury dental amalgam particularly for children.
The Khyber Pakhtunkhwa government last month directed all healthcare facilities to restrict the use of mercury dental fillings for children below the age of 15. Source: