Rise in drug prices by Tribune Editorial

Pakistan's continuing failure to embrace generic drugs is a significant part of the problem

In keeping with its policy of making essential items unaffordable, the government has reportedly allowed drug companies to increase prices. The fact that this decision comes in the middle of a national and global health crisis is not lost on us. While the government may claim that the increase is tied to inflation, we would ask why drug prices in Pakistan remain among the highest in the region.

Pakistan’s continuing failure to embrace generic drugs is a significant part of the problem. While other countries in the region, Africa, and even some developed countries encourage their pharmaceutical industries to churn out generic drugs at a fraction of the price, we have gone the other way. Most of our industry is licensing brand names, even where no patent applies. This allows for significant profits and unnecessary deaths of those that cannot afford brand name prices.

One of the excuses for this has been that it helps keep the prices of life-saving patented drugs lower than if the same were imported. Given Pakistan’s raw population, this is just an excuse. No drug manufacturer will ignore a market of 200 million people if it stands to make any money, especially because the production of patented drugs is all profit once research costs are recovered. The government could also use legal exemptions to allow for the domestic production of patented life-saving drugs if pharmaceutical giants refuse to allow their sale at affordable prices. That’s how Indian generic manufacturers went ahead and started producing HIV/AIDS drugs for which they couldn’t afford the patent.

Unfortunately, our policymakers seem to value the wallets of pharmaceutical executives too much to let them worry about competition from generics. Then there is the problem of the regulator. Under the new rules, the Drug Regulatory Authority of Pakistan can only freeze a manufacturer’s price hike for 30 days to see if the change is justified before it is essentially forced to approve the increase anyway. Given that DRAP cannot actually block a price increase anymore, would it not be better to just close up shop and let the pharmaceutical companies do whatever they want?

Published in The Express Tribune, July 21st, 2020.

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