Medicine crisis likely to worsen in Pakistan as Panadol production stopped

• Pharmaceutical company declares force majeure.
• Cites heavy financial losses as reason to stop production.
• Several companies stopped manufacturing due to increase in cost of production. 

ISLAMABAD: Pakistan is likely to see worsening medicine crisis after GlaxoSmithKline (GSK) Consumer Healthcare Pakistan on Friday announced to stop the production of all Panadol products, saying the company is facing heavy financial losses. 

The pharmaceutical company declared force majeure and stopped the production of Panadol tablets, Panadol Extra tablets and Children’s Panadol Liquid range, citing losses in the production of the Panadol range due to an increase in the price of paracetamol raw ingredients.

“We are incurring heavy financial losses on the production of the entire Panadol range due to an increase in the price of their raw ingredients and in the absence of due approval by the federal government on the recommendation of Drug Pricing Committee of Drug Regulatory Committee of Pakistan. 

"Due to these challenges, manufacturing of Panadol range on negative margins is unsustainable and despite exhaustive efforts of the company to mitigate the issue through dialogue, the situation is now beyond our control, compelling us to declare force majeure,” Chief Executive Officer (CEO) of GSK Consumer Healthcare Pakistan, Farhan Haroon, said in a letter to PM’s Principal Secretary Syed Tauqir Shah.

Officials of the Drug Regulatory Authority of Pakistan (DRAP) and Ministry of National Health Services, Regulations and Coordination (NHS, R&C) refused to comment on the new development, arguing they had not received any such letter or intimation from the pharmaceutical firm.

Pakistan is facing a serious crisis at the moment as many pharmaceutical companies are not manufacturing several essential drugs, including various brands of oral and injectable paracetamol, anti-psychotic and anticonvulsants due to the increase in the cost of production. But the government is unwilling to increase the prices of medicines on the demand of the pharmaceutical industry.

According to Pakistan Pharmaceutical Manufacturers Association (PPMA), the cost of medicines has increased by 38% due to an increase in the cost of raw materials, rupee devaluation, increase in the cost of utilities as well as transportation charges and are demanding immediate 40% increase in the prices of medicines across the board.

In his letter to the PM’s Principal Secretary, the company's CEO said they have repeatedly drawn the attention of various government stakeholders regarding the critical issue of the extraordinary and rapid increase in paracetamol (raw material) prices in Pakistan, and their appeals to the federal government to accord approvals for the adjustments to the selling price(s) of the captioned Panadol range of products, all of which are paracetamol based.

“We obtained the approval in the DPC of DRAP, held on January 12, 2022, which was recommended by the DPC for the approval of the cabinet. But, according to media reports, the same has been rejected after a prolonged delay by the latter without any intimation of reason(s) given to the company”, Haroon said.

Also, he maintained, although the company has received a routine consumer price inflation (CPI) adjustment for the year 2022 from DRAP on August 25, 2022, the same is not commensurate with the debilitating increase in the prices of the raw material of paracetamol.

During the last 12 months, the company produced nearly 5,400 million tablets of Panadol 500mg and Panadol Extra to serve its customers, consumers, and patients in need. The company has played a critical, consumer/patient-focused, and responsible role during the COVID-19 pandemic, dengue fever crisis, and floods across Pakistan, by ensuring continuous supplies of the Panadol range. 

“We did all this despite incurring heavy financial losses on the production of said Panadol range due to an increase in the price of paracetamol raw ingredients and in the absence of due approval by the federal government of the recommendation of the DPC / DRAP,” he added.

“Despite exhaustive efforts of the company to mitigate this matter through dialogue, the situation is now beyond our control”, Haroon said adding that in these circumstances, they are forced to declare force majeure regarding the production of all Panadol products. 

“But we remain keen to meet you to resolve the situation so that we can continue to deliver everyday healthcare to Pakistani people. We urge the federal government to take urgent action to rationalise the prices of the impacted Panadol range commensurate with the increase in the price of impacted raw material and as recommended by the DPC of DRAP, so as to enable the company to continue supporting the government to ensure an ongoing supply to all patients and consumers in need,” he said.