January 21, 2019 (MLN): As a result of the government’s decision to increase the prices of medicines, Fitch Solutions Macro Research believes that the revenue generating opportunities for local pharmaceutical companies in Pakistan will improve, while drug-makers will also benefit from a more stable medicine pricing system linked to the consumer price index.
“However, the government’s plan to increase medicine prices will restrict patient access to vital medicines,” wrote the research house in its write-up on Pakistan’s Pharmaceutical Industry Trend Analysis.
In January 2019, the government raised the maximum retail price of medicines by 9-15% to provide much-needed relief to both local and multinational drug manufacturers after considerable rupee devaluation in 2018, the high cost of utilities and a shortage of raw material supplies.
Zahid Saeed, chairman of PPMA stated that the manufacturing cost of medicines in the country had surged 40% given the record devaluation of rupee and increase in duties and taxes on the industry, said the report.
“We believe this is largely positive for the pharmaceutical industry of Pakistan as it will not only address the long due demand of the pharmaceutical industry to raise drug prices but will also provide some respite to the industry's margins which have come under pressure owing to rupee devaluation,” says Fitch.
But on the contrary, the research house pointed out a prominent downside to the development, quoting Pakistan Medical Association (PMA) and Pakistan Islamic Medical Association (PIMA)’s warning that such a step would cause further deterioration in the status of healthcare in Pakistan as people would not be able to afford drug s for themselves.
