I. BACKGROUND

1. This refers to the Important HRQCs in trail, blue, italic and after double line viz (a) 28 of 6.4.24 about YPA exposes DRAP’s corruption (b) 25 of 16.2.24 Medical expenses will increase significantly and Way forward

2. We also refer to several Other HRQC (a) HRQC 31 of 1.6.24 about Medical Expenses: Financial need in elderly care

II. UPDATED COMMENTARY

A. General

1. Further to KQU 3643 of 10.11.25 about, being an Important matter, we would inform you about Price deregulation raises medicine costs by 32pc (Attachment 70.1) in the ensuing paragraph, in Italic with emphasis in bold & Underline, heading ours for quick reading; in Bracket, Italic & Bold ours with KC prefix for better understanding.

2.  Prices of 100+ commonly used medicines have increased by an average of 32 per cent since February last year, after the, then caretaker government lifted price controls under its deregulation policy, prompting concern among officials and calls for the pharmaceutical industry to explain the steep hikes, according to officials and industry sources.

3. The steep rise has not only fueled public anger but also caught the authorities off guard, as they had expected that price deregulation would promote competition and eventually bring down costs for consumers. However, the outcome appears to be quite the opposite. (KC: Price Increase rather than reduction)

4. The surge in medicine prices came to light through recent findings of an ongoing national survey ordered by the prime minister, following complaints from citizens, hospitals, and provincial health departments about soaring drug costs.

5. Chairman of the Senate Standing Committee on National Health Services, Regulations and Coordination, Senator Mr Amir Waliuddin Chishti, told Dawn that officials of the federal health ministry and the DRAP had informed the committee that an overall 32pc increase in medicine prices had been observed since the caretaker government deregulated non-essential medicines in February 2024.

6. He added that in some cases, prices had risen by as much as 100pc, while an increase of around 50pc was recorded in several others.

7. Senator Mr Chishti said the purpose of deregulation was to boost competition, attract investment and increase exports, not to burden consumers.

B. Industry to face questions

1. He noted that a 32pc overall rise in medicine prices within two years warranted corrective action.

2. “We have decided to seek justification from the industry in all cases where medicine prices have increased by 50pc or more,” Senator Chishti added.

3. “We expect to meet industry representatives next month, and if we detect any element of cartelization by the pharmaceutical sector, we will ask the Competition Commission of Pakistan to look into the matter.”

4. He said the committee did not want the pharmaceutical industry to suffer and wanted it to grow, but not at the expense of patients, who were already struggling due to the prevailing economic situation.

5. He continued that the committee was expecting recommendations from the prime minister on the pricing of non-essential medicines.

6. Before deregulation, pharmaceutical companies were allowed to increase prices by up to 7pc annually in line with the Consumer Price Index under the previous pricing system.

7. Officials pointed out that, under this formula, prices would have risen by about 14pc over two years, far lower than the 32pc surge witnessed after deregulation.

C. Claims rejected

1. The PPMA, however, rejected claims of an excessive price increase. It argued that the survey reflected an average rise of about 15pc and that, if the roughly 3pc linked to the launch of new products and strengths is excluded, the actual two-year increase stood at around 12pc.

2. PPMA’s Mr Tauqeerul Haq said the deregulation was a timely move that prevented the collapse of the pharmaceutical industry amid soaring input costs, currency depreciation, inflation, rising energy and labour costs, and heavy taxation over the years.

3. “The policy helped restart production of many previously unavailable medicines, improved their availability, and curbed the circulation of counterfeit drugs during shortages,” he added.

4. The pharmaceutical industry argues that deregulation was necessary as the previous controlled pricing system made production unsustainable. Even under the old system, prices could not be raised without the federal cabinet’s approval. “Whenever a proposal to raise drug prices was presented, the cabinet would usually reject it due to political pressure,” said an industry representative. “Thus, deregulation was only possible during the caretaker government’s tenure.”

5. While deregulation has led to an increase in medicine prices, it has had a positive impact by resolving shortages of medicines at the retail level.

6. Mr Abdul Samad Budhani, chairman of the Pakistan Chemists and Druggists Association, said the deregulation of medicine prices ensured abundant availability of medicines, ending persistent shortages.

7. He described deregulation as a necessary step to move away from centralized pricing controls that had hindered the sector’s ability to respond to rising production costs.

8. However, Mr Budhani noted that challenges remain for essential drugs classified as “hardship cases”.

9. “The real need for relief was in essential drugs, but their prices were not approved, while non-essential drugs received pricing approvals,” he said, adding that bureaucratic delays had contributed to shortages of some vital medicines.

III. KASBATI & CO VIEWS

Owing to the above, the Medical expenses will increase significantly, hence, the entity budget has to be revised accordingly, unless there is a mass drive against the decision. Your good self can forward to the relevant official of your entity to take the matter with Chambers & Association, Elected candidates, etc.  

IV. MULTIPLICATION  

Although all the Commentaries are to the extent of the Subscribed IDs only, however, your Goodself is allowed to share this HRQC for the Noble Cause to create a tempo, through recipients of your Associations, so that the govt reverse their decision (which decision is against all Industries (other than Pharma) as well as Masses.

V. FURTHER DETAILS & SERVICES

Should you require any clarification or explanations in respect of the above or otherwise, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com.

Best regards for Here & Hereafter
Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner 

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

Quick Commentary Service Provider and High Level 440+ Tax & Levies Laws Consultants) 

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