Govt to establish new body for setting medicine prices amid health sector reforms

• Decision comes as govt eyes reforms in health sector, ministry.
• PM Shehbaz issues directives to establish new body for setting cost.
• New federal-level body will handle this task: health ministry official.

ISLAMABAD: The Drug Regulatory Authority of Pakistan (Drap) will no longer set medicine prices, as the government has decided to establish a new body to delegate the responsibility, The News reported on Sunday.

The decision has been made in line with the government's reforms and efforts in the health sector as well as streamlining the federal health ministry.

Prime Minister Shehbaz Sharif had issued directives of forming a separate pricing body with the committee led by Law and Justice Minister Azam Nazeer Tarar, who is currently working on a detailed proposal.

An official from the Ministry of National Health Services, Regulations, and Coordination (NHS, R&C) told the publication that after the caretaker government’s deregulation of non-essential medicine prices, the current administration has decided to relieve the body of its role in setting prices for essential medicines as well.

"A new federal-level body will handle this task,” the official explained.

Drap currently regulates the prices of around 500 essential medicines, based on the World Health Organisation’s latest list. The new body will take over this responsibility.

"Two proposals were initially considered: one to create an independent regulatory body for price-setting, and the other to establish an independent board of experts from various sectors to determine medicine prices," the official added.

Several essential medicines, including the Anti Rabies Vaccine (ARV), are currently scarce due to delays in adjusting their prices to meet manufacturer and importer needs. For example, the price adjustment for the NIH Islamabad-produced ARV has been pending for months, leading to a nationwide shortage.

"Similarly, decisions on the pricing of various hardship cases have been pending for over a year, with the federal cabinet neither accepting nor rejecting Drap’s pricing recommendations. This indecision is causing severe shortages of some essential medicines," the official said.

The deregulation of non-essential medicine prices by the previous caretaker government aimed to ensure the availability of medicines that manufacturers had previously discontinued. This move has led to improved availability of non-essential drugs for common ailments.

"Deregulating medicine prices promotes competition among pharmaceutical companies, potentially lowering costs for consumers and encouraging new market entrants. It also reduces the administrative burden on Drap, allowing the government to focus on other regulatory functions," the official noted.

Following deregulation, some multinational pharmaceutical companies that had exited Pakistan are now considering re-entering the market, a positive development for both the pharmaceutical industry and consumers.

"Less regulation in pricing will attract both domestic and international investments, fostering innovation and growth in the sector," the official concluded.