SALIENT FEATURES OF DRUG PRICING POLICY

February 18, 2015

 Islamabad, February 18, 2015 :-     Minister of State for National Health Services, Regulations & Coordination, Mrs. Saira Afzal Tarar said that this is the first comprehensive Drug Pricing Policy which has laid down a transparent mechanism for fixation and price adjustment. It will help increase availability of drugs at rational prices and discourage hoarding. It shall reduce the discretion of functionaries and facilitate the industry in predictability for business planning. While she was addressing the press conference in Islamabad. Saira Afzal Tarar said that prices of drugs shall remain frozen till 30th June, 2016, at current approved level. Thereafter, annual increase in prices of scheduled drugs shall be restricted to 50% of CPI (with a cap of 4%) and of non-schedule drugs to 70% of CPI (with a cap of 6%). She said that drugs for human use shall be divided in two categories in terms of pricing in the country. Drugs on essential medicines list, top 50 of most common use and drugs for treatment of Cancer, TB, Hepatitis, HIV, Thalassamia and Organ Transplant, biologicals and new chemical entitities shall be catergorized as schedule drugs and rest of the drugs shall be categorized as non-schedule. For the first time a concept of price reduction upto 30% on originator brands has been introduced with staggered annual reduction upto 10% every year if the Drugs are Costlier than India/ Bangladesh. This will help reduce prices of many drugs of common use for patients in the country. She further said that prices of new drugs shall be fixed on the basis of average prices in Inida and Bangladesh and if new drug is not available in these countries price shall be fixed at lowest level of the developing countries which regulate drugs prices or whole sale prices in UK, Australia, New Zealand. Prices of generics shall be fixed 30% less than the originator brand of new drug which will provide economic option to patients in Pakistan. She said that prices of originator brands of new drugs shall be reduced after 4 years or when minimum 3 generics are available in the market, whichever is later. Total reduction shall be 10% every year over a period of 3 consecutive years. Prices of generis of these drugs shall be reduced correspondingly and minimum price difference between prices of oginator brands and generic will be maintained at 15%. Production of lower priced drugs shall be encouraged and annual increase in their prices shall be automatic subject to the condition that it does not exceed Consumer Price Index. Production of orphan drugs shall be encouraged. Export of high quality drugs to developed world shall be encouraged. A transparent mechanism has been devised to decide justified hardship cases of the industry to keep the drugs available in the market. She said that a monitoring mechanism shall be devised with the coordination of the provincial health authorities to ensure that drugs are not sold in market on prices higher than fixed prices.  


   A BALANCED POLICY  

  1. First time ever, reduction in prices accepted by the Pharma Industry.
  2. Predictability - will help companies in business planning.
  3. Transparency – will reduce interaction between regulators and industry.
  4. Availability of drugs – encourages production of lower priced drugs.
  5. Encourages exports of quality drugs to developed world.
  6. The first comprehensive Drug Pricing Policy.
  7. PPMA comments (Post Policy):

          Industry appreciates transparency, clear formula, uniformity, automatic price indexing based on CPI and open hardship option.