Govt moves to tighten drug pricing rules, revamp hardship policy

August 28, 2026 (MLN): The government has ordered an urgent review of the regulatory framework governing drug pricing, including revisions to the Hardship Policy and the composition of the Drug Regulatory Authority of Pakistan (DRAP) Policy Board.

The Ministry of National Health Services and DRAP have been directed to revise the existing rules to protect consumers from unjustified medicine price increases while ensuring the availability of essential medicines, according to APP.

Federal Minister for Economic Affairs and Establishment Division, Senator Ahad Cheema, expressed dissatisfaction with DRAP’s existing formula for determining medicine price increases and called for a comprehensive review to make price revisions transparent, evidence-based and fully justified.

DRAP has been directed to strengthen the price-increase formula by introducing greater scrutiny and independent checks so that cost pressures are not automatically transferred to consumers through higher medicine prices.

The Secretary National Health Services and CEO DRAP have also been instructed to finalise revised rules for the Hardship Policy at the earliest and submit them to the relevant forum for approval.

The revised framework will ensure that hardship provisions are limited to genuine cases and do not become a means of transferring disproportionate commercial costs to patients.

The government has further directed changes to the composition of the DRAP Policy Board to strengthen expertise and evidence-based decision-making. The revised board will include a Health Economist and a Public Health expert.

The Ministry of National Health Services and DRAP agreed to the proposal and will initiate the necessary process for placing the changes before the relevant forum for approval.

The minister also directed DRAP to address cases where importers of essential medicines receive relief under the Hardship Policy and subsequently seek medicine price increases.

Under the revised rules, importers benefiting from tax concessions or other government relief under the Hardship Policy would be expected to rationalise their own margins rather than passing the entire cost on to consumers.

DRAP has been directed to examine existing importer and retailer margins, including margins that may currently be around 40% in relevant cases, and provide for their rationalisation under the revised Hardship Rules.

The minister stressed that any necessary adjustment should take place between importer and retailer margins within the supply chain and should not be passed on to consumers.

DRAP has therefore been instructed to incorporate an appropriate mechanism for rationalising importer and retailer margins in the proposed Hardship Rules and submit the revised framework for consideration and approval.

The pricing mechanism for originator and existing brands was also reviewed. DRAP officials informed the minister that originator brands currently use reference pricing based on prices in neighbouring and other relevant countries.

The minister directed DRAP to support international reference pricing with an independent verification mechanism to ensure pricing decisions rely on credible data and accurately reflect market realities.

He further called for a stronger and more independent system of checks within the drug-pricing framework to improve transparency, fairness and regulatory oversight.

The minister emphasised that the pharmaceutical market must remain commercially sustainable while ensuring affordability and protecting the public interest, particularly in the case of essential medicines.

He said access to affordable medicines is directly linked to public welfare and stressed the need for a fair balance between the legitimate needs of the pharmaceutical sector and consumer interests.

Secretary National Health Services Retired Captain Muhammad Mehmood, CEO DRAP Dr. Obaidullah, Director Pricing DRAP and other senior officials attended.

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