Green-light given for 20% hike in drug prices
ECC fixes wheat procurement target at 5 million metric tons for new crop
Inflation-hit people were given another shock on Friday when the Economic Coordination Committee (ECC) of the cabinet approved a rise of up to 20% in retail prices of general medicines and 14% for essential ones, prompting immediate criticism from drug manufacturers who said the increases were too small.
The decision followed a months-long standoff with importers and manufacturers, whose associations have been demanding an across-the-board 39% rise, warning that the industry could otherwise collapse.
The ECC took up the summary of the Ministry of National Health Services, Regulations and Coordination that sought an increase in maximum retail prices of the medicines based on the recommendations of the Policy Board of Drug Regulatory Authority of Pakistan. The increase was demanded to offset the impact of devaluation of the rupee and inflation on the manufacturing cost.
To ensure continuous availability of drugs in the market, the ECC allowed the manufacturers and importers to increase their existing market retail price of essential drugs up to 14%.
Similarly, it allowed increase in the market retail price of all other drugs up to 20% on the basis of average CPI for the current year.
The ECC further advised the policy board to review the situation after three months, i.e., in July and make its recommendations to the federal government regarding price decrease if the rupee appreciates its value, adding that “no increase under this category” would be granted in the next financial year.
Annual inflation rate hit 35% in March, fuelled by a depreciating currency, a rollback in subsidies and the imposition of higher tariffs to secure a bailout package of $1.1 billion from the International Monetary Fund. Food inflation has soared to 47%.
But the government had pushed back against the demands for higher medicine prices, fearing such a move would lose it support months before national general elections.
The Pakistan Pharmaceutical Manufacturing Association (PPMA) criticised the increase, which it said was way lower than it had expected.
Wheat procurement
The ECC fixed the wheat procurement target at 5 million metric tons for Punjab, Sindh and Balochistan for the new crop. The operations would require a total funding of Rs1.16 trillion, according to the Ministry of National Food Security & Research.
By going against its own decision of setting the wheat support price at Rs3,900 per 40kg, the ECC allowed Sindh to procure 1.4 million metric tons of wheat at Rs4,000 per 40kg. The provincial government would borrow Rs214 billion for the purpose, including Rs140 billion for the wheat cost.
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https://tribune.com.pk/story/2414229/green-light-given-for-20-hike-in-drug-prices
