Details of increase in prices of medicines in Pakistan

The increase made in the prices of medicines in Pakistan during the last five years is as under:

Since July 01, 2016 the annual increase in Maximum Retail Prices of drugs has been linked with the Consumer Price Index (CPI) under the Drug Pricing Policy-2015/2018 notified after approval of the federal government.

In July 2016 prices were increased on the basis of CPI at 2.86% for the financial year 2015-16 as per Drug Pricing Policy 2015 is as under:-

Scheduled Drugs 1.43% (50% of CPI)
Non-scheduled Drugs 2% (70% of CPI)
Lower priced Drugs 2.86% (equal to CPI)

In January 2018 prices were increased on the basis of CPI at 4.16% for the financial year 2016-17 as per Drug pricing Policy 2015 is as under:—

Scheduled Drugs 2.08% (50% of CPI)
Non-scheduled Drugs 2.91% (70% of CPI)
Lower priced Drugs 4.16% (equal to CPI)

In July 2018 pharmaceutical companies availed increase in prices on the basis of CPI at 3.92% for financial year 2018-19 as under:

Essential Drugs 2.744%
Other than essential and lower priced drugs 3.92%

In July 2019 pharmaceutical companies availed increase in prices on the basis of CPI at 7.34% for financial year 2019-20 as under:

Essential Drugs 5.13%
Other than essential and lower priced drugs 7.34%

Moreover, increase in prices of drugs at 9% on MRPs determined under the hardship category and at 15% for other drugs was allowed due to the devaluation of Pakistani rupee against the US dollar at 30% during 2018. It was allowed to ensure the availability of drugs in the market after due process and approval by the federal government.

Reasons for the increase the prices of drugs are as under:

  • Devaluation of Pakistani rupee against the US dollar from 104.93 to 158 during 2016 to 2019.
  • Increase in prices of raw materials and packaging materials of drugs in Pakistan.
  • Increase in manufacturing cost due to rise in cost of electricity, gas and labor.
  • Increase in prices of Active Pharmaceutical Ingredient (API) in China due to the closure of plants on account of environmental reasons.
  • Unavailability of quality drugs due to increase in cost of production of API.

 

Note: The above information was shared with the Senate by the Minister for National Health Services, Regulations and Coordination in reply to a question by Senator Mushtaq Ahmed on January 31, 2020.