KARACHI: Blaming the regulator for the shortage of paracetamol, a commonly used painkiller, across the country amid growing malaria and dengue cases, a study has found that the crisis could have been avoided had the decision-making been based on evidence instead of populist narratives.

“The recent shortage of Panadol in Pakistan was a case of mismanagement from public entities and could have been avoided if decision making was anchored in evidence and industry insights instead of populist narratives,” said a statement issued by Tabadlab, a public policy think tank. The statement was based on Tabadlab’s policy note titled “Pain Mismanagement: Pakistan’s Big Pharma and Regulators’ Headache”.

The policy note suggests that the resistance to increase in Panadol pricing was not grounded in evidence and data.

The document “outlines a hypothetical calculation (with extreme assumptions) that if the Panadol price had been increased in accordance with what GSK had requested and finds that even exaggerated impact calculations show that the increase in monthly household expenditure of an average Pakistani household would have been less than 0.1%. This is clearly less than YoY (year-over-year) national inflation of 26.6% (as calculated by PBS in Oct-2022)”.

Only last month, GlaxoSmithKline Consumer Healthcare Pakistan Ltd announced suspending the manufacturing of Panadol, saying it has become unsustainable to produce the over-the-counter medicine on negative margins. The company said it was “forced to declare” force majeure — a condition in contracts that frees all parties from liability in an extraordinary event — with respect to the production of Panadol tablets, Panadol Extra tablets and children’s Panadol liquid range.

“The policy note suggests that the resistance to increase in Panadol pricing was not grounded in evidence and data,” it said. “The report outlines hypothetical scenarios that simulate the impact of increased Panadol prices (in line with GSK requests) on the monthly Pakistani household expenditure.”

It found that even the “most exaggerated impact would have been less than 0.1%. This is clearly less than YoY national inflation of 26.6% (as calculated by PBS in Oct-2022)”.

Tight price controls and the reactive attitude of the Drug Regulatory Authority of Pakistan (Drap), it pointed out, frequently gave rise to various drug shortages in Pakistan.

The document takes a step further to analyse the broader challenges of inconsistent policies, nature of Drap’s structure and style, rent seeking elements of the industry and the lack of development and growth in local pharmaceutical industry making businesses susceptible to international markets and value chains.

Published in Dawn, November 26th, 2022

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