Pharma industry wants 25 percent hike in drug prices

ISLAMABAD: The pharmaceutical industry on Thursday set June 30 as the deadline for the government to accede to three of its demands, otherwise the cash-strapped industry was left with no option but to shut down.

Speaking at a press conference at the National Press Club, Pakistan Pharmaceutical Manufacturers Association (PPMA) President Qazi Mansoor Dilawar called for refund of Rs 40 billion collected by the government as sales tax on imports of raw materials, 17 pc of sales on imports. Called for withdrawal of tax. The prices of raw materials and medicines have been increased by 20-25 per cent to prevent the industry from collapsing.

He also demanded a 20 per cent increase in the maximum retail price (MRP).

He said that there is already a shortage of about 40 medicines in the market which will become a dangerous situation if immediate steps are not taken.

He said that the previous government had promised that the sales tax levied under IMF pressure would be refunded within 48 hours, but regretted that no mechanism has been put in place yet for refunds, resulting in a huge amount of Rs 40 billion. has been blocked.

Three-fold increase in raw material cost, manifold increase in electricity duty and hike in fuel prices and devaluation of rupee added to the problem.

He also said that the industry has to import 95 per cent of the raw material.

The PPMA President dispelled the notion that the sector was making windfall profits and said that there are many drugs whose price is more than the retail price.

He claimed that about 70 per cent of medicines are cheaper in Pakistan as compared to India and Bangladesh.

Replying to a question, he said that after 13 years of PTI government, a lot was said about increase in prices of 600 medicines but no one talked about reduction in prices of 400 medicines.

Former PPMA president Kaiser Waheed referred to the recent spike in COVID-19 cases, especially in Sindh, and said the industry is not prepared to face the challenge this time if the situation escalates.

PPMA representative Usman Shaukat told Dawn that he had a meeting with Finance Minister Miftah Ismail but the issue could not be resolved.

“In the current week, we had a meeting with the Salim Mandviwala-led Senate Finance Committee as part of budget deliberations.

recommendations. Miftah Ismail and former Finance Minister Shaukat Tarin were also present.

PPMA reiterated its stand to provide a long-term solution to levy GST on Active Pharmaceutical Ingredients (APIs) and Raw Materials with effect from January 2022, which is an anomaly as pharma products cannot pass through GST while the cash flows of the manufacturers can be done. Has been hitched through this without any refund since January,” he said.

“While the Finance Minister said that refunds are now being processed on a manual basis, the industry emphasized on a long-term solution to the issue by abolishing GST or making it zero rated on inputs and outputs.

Mr. Tarin said that there are also materials that are used in many industries apart from pharmaceutical [such as in juices] And there may be an abuse element.

PPMA replied that a negative list may be submitted to FBR of materials which are used in multiple industries and GST regime can be imposed on them and refunds can be processed on the basis of consumption. Only raw materials having pharma use should be exempted from GST,” said Mr. Shaukat.

“This was endorsed by all the members of the committee and it was decided that within four days such a list would be submitted to the Finance Ministry for resolution of the issue. We urge the ministry to resolve the issue,” he said.

Published in Dawn, June 24, 2022