Pakistan’s pharmaceutical industry has opposed proposed changes to the country’s drug pricing mechanism, warning that frequent policy revisions could create uncertainty for manufacturers, affect medicine supplies and discourage investment in the sector.
Industry representatives said the existing Drug Pricing Policy 2018 was introduced after consultations with relevant stakeholders and was subsequently endorsed by the Supreme Court.
Their concerns follow a direction from Federal Minister for Economic Affairs and Establishment Division Senator Ahad Cheema to the Ministry of National Health Services and the Drug Regulatory Authority of Pakistan (DRAP) to review the current pricing framework.
The proposed review includes the Hardship Policy and the structure of the DRAP Policy Board.
Industry seeks continuity in medicine pricing policy
Under the current pricing framework, the government regulates the prices of essential and life-saving medicines.
Industry officials said these medicines account for around 40% of the pharmaceutical market, covering approximately 500 molecules sold in Pakistan.
The existing policy also allows annual price increases of up to 70% of Consumer Price Index (CPI) inflation and uses medicine prices in India, Bangladesh and Sri Lanka as part of its international benchmarking mechanism.
According to industry representatives, essential medicine prices increased by a maximum of 4.9% in fiscal year 2026, compared with CPI inflation of around 7%.
They said prices of essential medicines in Pakistan also remained lower than those in neighboring countries, arguing that the current framework provides a predictable pricing mechanism while recognizing the industry’s production costs.
Pharma companies warn of investment risks
The pharmaceutical industry has urged the government to maintain the existing pricing and hardship mechanisms for a longer period.
Industry representatives said repeated changes to the regulatory framework could increase uncertainty for manufacturers and potentially affect medicine availability, product quality, investment and pharmaceutical exports.
They also pointed to changes in industry profitability following the 2024 deregulation of non-essential medicines.
According to industry officials, average profit margins in the sector increased from around 3% two years ago to approximately 10% after deregulation.
The industry argues that stronger margins provide pharmaceutical companies with greater capacity to reinvest in manufacturing facilities, quality improvements and new production capabilities.
Industry highlights impact of deregulation
Pharmaceutical representatives also defended the deregulation of non-essential medicines, saying it has increased competition among manufacturers on both price and quality.
They argued that greater competition can benefit consumers by giving patients more choices while allowing companies to maintain sufficient returns to support investment in the sector.
The industry also cited India’s pharmaceutical export performance as an example of how consistent regulatory policies and greater market liberalization can support the growth of the pharmaceutical sector.
Officials said India’s pharmaceutical exports were close to $30 billion in 2026, although this figure was presented by industry representatives in the context of their argument for policy consistency.
Government faces pricing and affordability challenge
The proposed review places the government in a difficult position between maintaining affordable access to essential medicines and ensuring that pharmaceutical manufacturers can operate sustainably.
Any changes to the drug pricing mechanism could affect manufacturers’ costs, investment decisions and the prices ultimately paid by patients.
For now, the pharmaceutical industry is calling for continuity in the existing Drug Pricing Policy 2018, including its hardship provisions, while the government considers changes to the pricing framework and DRAP’s regulatory structure.
The outcome of the proposed review could have implications for medicine prices, pharmaceutical investment, domestic production and Pakistan’s ability to expand its medicine exports.
