Drugs Pricing Policy-2011 finalized for approval to rationalise medicines prices

ISLAMABAD:The Drugs Pricing Policy Board constituted by the Ministry of Health has finalized “Drugs Pricing Policy-2011” for approval from the competent authority to rationalise medicines prices in the country.According to ministry of Health, prices of medicines are regulated by the Federal Government under Section 12 of the Drugs Act, 1976.The Drugs Pricing Policy Board comprising of experts from World Health Organization (WHO), Ministry of Industries and Production, Ministry of Finance Ministry of Commerce, Ministry of Health as well as representatives from the Pharmaceuticals Industry and Consumer Organization was formulated by the Ministry.The said Board formulated a Drugs Pricing Policy-2011 at par with the neighboring countries adopting latest approaches for rationalization of prices of drugs in the country.After approval of the policy by the appropriate authority, prices of drugs will be rationalized in accordance there of.According to the Ministry, since April 2004 uniform prices of drugs are fixed at an average of the prices prevailing in the SAARC countries.In case the drug is not available in the SAARC Countries, international prices (Particularly United Kingdom, Australia /New Zealand) are considered. Prices as mentioned in the proforma invoice for imported drugs and costing data for locally manufactured drugs are also considered for new chemical entities besides other parameters.Prices of imported drugs are fixed Maximum Retail Price = C&F price+40%  markup (C & F: Cost and Freight) Prices of locally manufactured drugs are fixed Non-Sterile Products MRP+Prime Cost+75% markup, Sterile Products MRP-Prime Cost+90% markup (Not-The Markup is allowed to cover the expenses /discounts).Prices of generic drugs uniform prices are fixed for generics as summarized average price of earlier same composition (s) generic (s) registered since 2001 in the country in case Pricing Committee has not yet fixed the price of a medicine formulation.Prices of new strength of medicines are awarded on pro-rata of price of same composition/generic fixed by the Drug Pricing Committee.

Minimum 15% less than the brand leader price at the time of registration of first generic.
The generics are allowed 30% less than the innovative price in case of new drugs.At present, the Ministry of Health does not control the profits to importers and manufactures of medicines.There is a common public perception that prices of medicines are cheaper in neighboring countries as compared to Pakistan which is partially true.There are certain drugs which are cheaper in neighboring countries but there are many drugs which are cheaper in Pakistan.An apple-to-apple comparison (multinational to multinational) of 178 essential drugs marketed by multinational companies depicted that 108 (61%) drugs are cheaper in Pakistan whereas 70 (39%) drugs are cheaper in India.However, prices of drugs marketed by local companies in India are generally lower than prices of drugs marketed by local companies in Pakistan due to raw materials for most commonly used medicines are produced in India whereas in Pakistan share of locally produced raw materials is less than 10%.India has also developed its industrial base for manufacturing of pharmaceutical machinery and excipients which also decrease manufacturing cost of medicines – APP