KARACHI, Aug 27: Multinational pharmaceutical companies are working actively with the government to find a modality for providing the earliest possible supply of tax exempt medicines to the market in order to protect the consumers and ensure uninterrupted supplies of the medicines.

“A collapse of the supply chain is imminent following the government’s indication that no refund is possible. It would mean that either the consumer will have to pay sales tax till such stock is exhausted in the supply chain or the financial burden will have to be borne by the manufacturers which is most unjust and unfeasible,” executive director, Pharma Bureau, Zafar Mooraj, said on Tuesday.

The Bureau, he added, now expects the government to review the existing regulations, which are excessive, and introduce reforms that will further benefit the consumers.

Consumer interest will be fully safeguarded whilst at the same time, the industry would get a clear policy environment in which it could operate and develop in a systemic manner for the future, he said.

Pharma companies, however, welcomed the decision of withdrawing the sales tax as the government had utilized the opportunity to benefit the common man, although the loss of revenue impact would be substantial, Mr Zafar said.

Meanwhile, chairman, Pakistan Pharmaceutical Manufacturers Association (North zone), Najam-ul-Hassan Jawa, told Dawn from Lahore on Tuesday that the government in consultation with the PPMA, should now evolve some formula to allow claim/adjustment of sales tax paid on unsold stock of medicines as it would help defuse the uncertain market situation.

He said that uncertain situation had gripped the market due to stock lying at chemists shops and warehouses of distributors and wholesalers on the manufacturers had paid sales tax and deposited to the sales tax department.

As per the government’s Friday decision of disallowing any adjustment of claims on sales tax already paid — some companies, in a gesture of goodwill, have decided to replace stock lying with their authorized distributors, he said.

Chairman, Pakistan Chemists and Druggists Association (PCDA), Mohammad Ilyas Nainitalwala, said that he had talked to central chairman of PPMA, Dr Khalid Javed Chaudhry in Lahore on Monday to resolve the refund issue amicably.

He said the PPMA chief and PCDA are planning to jointly meet the finance minister and the CBR chairman to come out with a solution on the ST refund issue.

General secretary, Karachi Wholesale Chemist Council (KWCC), Naeem Ahmed, said that a total chaos had engulfed the wholesale markets and sales were going down as retailers were not lifting the stock.

He said the Kachee Gali wholesale market of medicines alone had GST paid stock ranging between Rs20 and Rs25 million.

Meanwhile, a verbal skirmish between customers and retailers continued at various retail outlets on Tuesday as the shopkeepers are not ready to cut prices till the GST paid stock are not depleted.

Manufacturers say that they had already started producing the medicines without the tag of GST, besides hiding the additional sales tax amount from the drugs, if any, from the day of abolishment of the GST.

But distributors and wholesalers are not ready to lift the stock till the issue of GST refund from pharma makers on drugs is not resolved.

Some customers told this scribe that the government should now come out for the rescue of general public as they were yet to avail the benefit of price cut in medicines.