The federal government has ordered a review of Pakistan’s drug pricing formula to ensure medicines remain affordable, warning that price increases without valid justification will not be accepted.
Economic Affairs Minister Ahad Cheema issued the direction during a meeting of the Drug Regulatory Authority of Pakistan (DRAP) on Monday, asking officials to expedite pending drug pricing cases and develop a mechanism that prioritises patients while avoiding unnecessary hurdles for pharmaceutical companies and importers.
Officials told the meeting that the case-by-case evaluation of pending pricing applications was nearing completion. Cheema acknowledged the progress made by DRAP officials and appreciated the efforts of Climate Change Minister Dr Musadik Malik in completing the assessment.
The meeting was attended by Health Secretary Momin Agha, DRAP Chief Executive Officer Dr Obaidullah Malik and other senior officials.
Government Seeks Fairer Medicine Pricing Mechanism
The government is reviewing the existing formula to identify provisions that may prevent fair and accurate price determinations. The proposed changes are intended to improve the pricing process while maintaining access to medicines for patients.
Cheema suggested subscribing to specialised international drug pricing databases to strengthen independent assessments and provide more reliable benchmarks for evaluating medicine prices.
He emphasised that international comparisons could help inform pricing decisions but should be supported by independent verification and appropriate checks and balances.
The review comes amid competing concerns over medicine affordability, pharmaceutical production costs and the availability of products in the domestic market.
DRAP Reports Availability of Influenza Vaccine
During the meeting, officials reported that sufficient quantities of the trivalent influenza vaccine recommended by the World Health Organisation (WHO) were available in the market.
DRAP had withdrawn the vaccine’s hardship case because its prices were controlled in the international market, according to the briefing.
The development was discussed as part of the broader review of medicine pricing applications and the regulatory approach to products whose prices may be influenced by international market conditions.
Pharmaceutical Industry Calls for Consultation
The Pakistan Pharmaceutical Manufacturers Association (PPMA) has urged the government to consult industry representatives while revising the pricing formula.
PPMA Vice Chairman Usman Shaukat said manufacturers shared the government’s objective of keeping medicines affordable and accessible. He argued that a fair, transparent and predictable pricing mechanism would benefit patients and pharmaceutical companies alike.
Shaukat also cautioned that affordability and availability were closely connected. While unjustified price increases could burden patients, he said, prolonged price freezes amid rising production costs could make some medicines commercially unviable.
These costs include active pharmaceutical ingredients, packaging, energy, freight and regulatory compliance. Many inputs are imported, exposing manufacturers to exchange-rate fluctuations and higher dollar-denominated expenses.
According to the industry’s position, manufacturers facing sustained cost increases without corresponding price adjustments could be forced to suspend production. Such disruptions could reduce local supplies and push patients towards more expensive imported alternatives.
Industry representatives also warned of the risks associated with shortages, including greater reliance on smuggled or substandard medicines. These are potential consequences raised by the association, rather than confirmed outcomes of the current pricing review.
PPMA Proposes Regular, Cost-Linked Price Reviews
The PPMA has supported the use of international pricing benchmarks and independent databases, provided the comparisons account for Pakistan’s operating environment.
The association argues that assessments should consider manufacturing costs, financing expenses, exchange-rate exposure and Pakistan’s comparatively low medicine prices.
Shaukat proposed a clear, time-bound and rules-based pricing mechanism with periodic adjustments linked to the Consumer Price Index (CPI) and relevant production costs.
Such a system, according to the industry’s proposal, could reduce delays in pricing decisions and prevent hardship applications from accumulating for extended periods.
The government’s challenge will be to balance patients’ ability to afford medicines with the need to maintain a reliable domestic supply. The outcome of the DRAP review could shape how future price applications are assessed and how frequently changes are considered.
No final changes to the drug pricing formula were announced in the information provided. The review and the proposed industry recommendations remain distinct from any formally approved amendments to the existing pricing rules.
