Govt takes away drug pricing power from pharmaceutical companies 

ISLAMABAD: The federal government has put an end to the power of pharmaceutical companies to increase prices of drugs while not paying any heed to opposition from some cabinet members and pharmaceutical companies.

According to sources, on the advice of Prime Minister Imran Khan who also holds the portfolio of Ministry of National Health Services, Regulations and Coordination, the federal cabinet has granted its approval to put an end to all provisions of Drug Pricing Policy, 2018 which contradict Section 12 of Drugs Act, 1976. 

Sources informed that the Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood and Special Assistant to the Prime Minister on Health Dr Zafar Mirza opposed the decision while Ministry of Health Secretary Aamir Ashraf Khawaja favoured the decision.

After the federal cabinet’s approval, Drug Regulatory Authority of Pakistan (DRAP) and the Ministry of National Health Services, Regulations and Coordination will determine drug prices on the applications of pharmaceutical companies and notification of price hikes will be issued by the federal government, said sources.

According to sources the Federal Health Ministry had earlier submitted a summary before the federal cabinet seeking an end to paragraph seven of Drug Pricing Policy, 2018. However, the summary was dropped from the agenda of the federal cabinet’s meeting held on June 24 after Prime minister’s aide Dr Zafar Mirza allegedly approached the Cabinet Secretary Sardar Ahmed Nawaz Sukhera.

Documents available with Profit disclosed that a meeting on the drug pricing was chaired by the prime minister on July 2, which was attended by special assistant to the prime minister for national health services, members of task force on health, ministry of health secretary and DRAP chief executive officer. 

The Health Ministry convinced the federal cabinet that the pricing powers of pharmaceutical companies under paragraph seven of the Drug Pricing Policy, 2018 was against Section 12 of Drugs Act, 1976 and that the federal government should hold the power to determine prices of drugs.

According to sources both prime minister’s aide Dr Zafar Mirza and Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood were of the stance that putting an end to pharmaceutical companies powers will increase the indulgence of bureaucracy in the pharmaceutical industry.

Earlier, owing to a massive hike in prices of drugs during the last ten months, the prime minister had advised the review of the Drugs Pricing Policy, 2018.

As per documents, its was decided in the meeting held on July 2 that all provisions of Drug Pricing Policy, 2018 which are at variance with Section 12 of Drugs Act, 1976 will be suitably amended to bring the same in conformity with Drugs Act, 1976, while a summary titled “omission of paragraph seven of Drug Pricing Policy, 2018” moved by the Ministry of Health on June 28 will be withdrawn and the ministry will submit a revised summary for approval of the cabinet through circulation.

Sources further informed that the federal government determines drug prices under Section 12 of Drugs Act, 1976 while DRAP has the power to set drug pricing mechanisms under Section 7 (XIII(C)) of Drug Regulatory Authority of Pakistan Act, 2012 and that the federal government’s approval is solicited for drug pricing. 

They said that pharmaceutical companies on the basis of Consumer price Index (CPI) and prior intimation of 30 days were authorised to raise prices of drugs under paragraph seven of Drug Pricing Policy, 2018. However, approval of the federal government was sought prior to issuing a notification of price hike.

According to documents, the Health Ministry has sought the approval of the federal cabinet to put an end to the power of pharmaceutical companies to increase drug prices. 

Earlier on June 24, the federal cabinet had advised the Health Ministry to review Drug Pricing Policy, 2018 and submit a report within two months.