WHAT is worse? That a patient is able to purchase an essential medicine any time, even at a somewhat higher price, or not get it at all? The government believes the people would be better off without a medicine than with a pricier one. At least it appears to be thinking on these lines, considering it rejected a request to raise the price of Panadol, a popular brand of generic paracetamol, used to treat fevers and aches. This was despite the fact that the Drug Regulatory Authority of Pakistan had allowed its manufacturer a price increase back in January. That was on account of the elevated domestic headline inflation and manifold surge in the costs of imported raw materials on the back of the unprecedented global commodity price super cycle. After failing in its efforts to get the retail price increased to reflect its manufacturing costs, the producer, GlaxoSmithKline Consumer Healthcare Pakistan, has suspended the production of Panadol, declaring force majeure and saying it has become unsustainable to produce this ‘over-the-counter’ medicine on ‘negative margins’. It wasn’t unexpected. The company had already scaled back the production of Panadol for some months to reduce losses, which had created a shortage of the drug in much of the country.

Both the government and the manufacturer have ‘solid reasons’ to back their decisions. If it had approved the Drap-recommended price increase, the government feared a political backlash from the PTI, which could have used the issue as fodder in its campaign to force an election. GSK is a business and not a charity. Therefore, it will be unfair to judge its decision to shut down one of its most popular products. At the heart of the issue is the excessive government control over drug pricing, which is stopping the sunshine pharmaceutical industry from exploiting its growth and export potential. In the past, we have seen several foreign pharmaceutical firms wind up their operations in Pakistan and quit the country. Others have been unable to invest and upgrade their technologies and production facilities because they cannot make decent profits and recover their investments. Unlike us, India understood the importance of deregulated drug prices in the 1990s and is now a world leader in this industry, along with China, and one of the largest exporters of pharmaceutical raw materials, generics and finished products. We, on the other hand, aren’t even sure if we need Panadol or not.

Published in Dawn, October 24th, 2022