AFTER years of delay, the federal minister for National Health Services Regulation and Coordination, Saira Afzal, announced what is being dubbed as Pakistan’s first-ever drug pricing policy. Despite the pharmaceutical industry’s long agitation in favour of such a policy, there were reports of the industry’s opposition to some elements of the proposed policy in the run-up to its announcement.
Now that the policy has been unveiled, although apparently not in its final form, it is fair to assume that it has the backing of the industry. The new policy was announced through a news conference. It has not been made public.
The contours of the policy were only known through the industry’s reactions in the media. It seems that no effort was made to take on board other stakeholders such as consumers and patient groups, health rights and public health activists, researchers and academics working on the issue of access to and affordability of medicine.
The new drug pricing policy may not bring down the cost of medicine.
The manner in which the policy was announced itself raises questions about how representative it is.
Having said this, it is the first positive governmental action on the deeply emotive issue of drug pricing. The issue is of so sensitive a nature that price increases have been publicly resisted by successive governments for fear of a public backlash especially when the rulers have already been in the bad books of the electorate due to their poor performance.
In fact, Prime Minister Nawaz Sharif reportedly showed his anger at a unilateral drug price increase some time ago.
However, there are feel-good factors woven into the outlines of the policy announced in the media. This factor emanates from the promise of a price freeze on medicines until June 2016. Thereafter, the prices of medicine will go up in line with the consumer price index.
For scheduled drugs — the World Health Organisation’s essential drugs list — the price increase will not go beyond 50pc of the CPI and for non-scheduled drugs, the maximum increase would be 70pc of the CPI.
Also, the price of the originator brand of medicines will go down after a specified time when the research and development cost incurred on it has been recouped. However, the fear is that if an automatic price increase formula is applied across the board and on an annual basis, the price of generics, which are seen to be in the low-cost range, are also likely to go up.
This will make essential lifesaving drugs expensive and beyond the reach of many consumers. The news of the price increase policy is thus music to the ears of the pharmaceutical industry which has claimed that a price freeze has been in place since 2001. However, this flies in the face of the daily experience of those permanently on medication.
Consumers have complained of price increases at regular intervals, and this is confirmed by reports in the media and independent investigations. Even last year, prices were raised unilaterally by the industry — up to 18pc according to media reports. When the government tried to rein in the unauthorised prices the industry sought intervention by the court while continuing with new prices hikes.
Worryingly, price increases have been going on at a time when a price decrease has occurred in neighbouring countries. In 2013, India, through a new pricing formula, further reduced the price of many lifesaving medicines besides bringing in an additional chunk of such drugs under the price control category.
The new policy in Pakistan seems to lean to some extent in the direction of decreasing the cost of certain medicines. Yet, overall, it seems more of a price increase policy than a price control policy. With weak governmental regulatory and price control mechanisms, the new policy must be further elaborated in terms of how it is going to be enforced and monitored and how far it will contribute to the goal of access to affordable and cheap medicines.
The new policy outlines are barely conceivable through media reports. There are many gaps in information and flesh needs to put on the bare bones of the pricing policy. With the Drugs Regulatory Authority of Pakistan struggling to define its mission and reports of a new CEO with links to the industry surfacing in the media, the new policy does not inspire much confidence even in its silver-lining good bits.
Unless the draft document is put out in the public domain and wider consultation is sought from society groups, the policy will appear to be unrepresentative and ad hoc, and catering only to special interests.
The writer is a development consultant and policy analyst.
Twitter @arifazad5
Published in Dawn, March 20th, 2015
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