Pharmaceutical industry wants to raise drug prices by 25 per cent

The government is given the deadline of June 30 to accept the pharmaceutical industry’s demands, or the cash-strapped sector will have no choice but to shut down.

In order to prevent the collapse of the industry, Qazi Mansoor Dilawar, chairman of the Pakistan Pharmaceutical Manufacturers Association (PPMA), called for the refund of Rs40 billion that the government had collected as sales tax on the import of raw materials, the removal of the 17 per cent sales tax, and a 20 to 25 per cent increase in the price of medications during a press conference at the National Press Club.

He also called for a 20 per cent increase in the maximum retail price (MRP). According to him, there is already a shortage of about 40 medicines on the market, and if immediate action is not taken, the shortage will grow alarmingly large.

Dilawar claimed that the previous administration had pledged to refund the sales tax that had been imposed as a result of IMF pressure within 48 hours, but regretted that no mechanism had yet been established, preventing the refund of a significant Rs40 billion.

The problem was made worse by a three-fold increase in the price of raw materials, a massive increase in freight costs, an increase in the price of fuel and electricity, and a drop in the value of the rupee. He added that 95 per cent of the raw materials used in the sector had to be imported.

The president of the PPMA dismissed the notion that the industry was reaping huge profits by mentioning that many medications had costs that were higher than their retail prices.

He asserted that about 70 per cent of Pakistani medications were less expensive than those found in India and Bangladesh.

In response to a question, he stated that while there was much discussion about the increase in 600 drug prices after 13 years under the PTI government, there was little discussion of the decrease in 400 drug prices.

The industry was not prepared to handle the challenge this time, according to the former PPMA chairman Qaisar Waheed, who also spoke about the recent increase in Covid-19 cases, particularly in Sindh.