Forex crisis endangering lives

LAHORE: The foreign exchange crisis is a stark reality and the government is faced with the option of either defaulting or sacrificing productivity and jobs.

Many essential sectors are now suffering because of poor decisions on part of the government, when it comes to the foreign exchange crisis. One sector that has almost collapsed, is the pharmaceutical sector.

Micromanagement of foreign exchange was done even handedly and in some cases even luxurious items were allowed to be imported. The general restriction of reducing import of raw materials to 40 percent of previous year’s level was applied on pharmaceutical raw materials as well.

These raw materials produce much needed medicines to save and improve the health of the people.

Economic distress increases diseases and ailments, while inability to import pharmaceutical input meant that curative drugs would not be available to the ailing Pakistanis. Any planner with foresight could have restricted the raw material imports of all industries to 38 percent and allowed unrestricted import of pharmaceutical inputs that would have assured availability of raw material for the industry.

Currently, according to industry circles, they are left with only a week’s raw material after which the entire industry would close.

The nation can manage a decline in production of cars, bikes and electronic gadgets that have the power to charge rates of their liking, but depriving the nation of drugs would bring more miseries and illnesses in the society.

Director Pharma Bureau Pakistan Ayesha Tammy Haq and CEO Ferozesons Osman Khalid Waleed Laboratories met a select group of media to share the distress of the industry. It is rare that the Pharma Bureau, which represents multinational pharmaceutical companies operating in Pakistan, and domestic manufacturers adopt the same stance on drug policy. They pointed out that the matter has gone much above the shortage of raw material.

Now even if import is freely allowed, the cost of import has touched the roof because of steep decline in rupee value. They said the prices of medicines are totally controlled by the government.

Manufacturers cannot increase the price in case of increase in costs of inputs. They have to get the approval of the Drug Regulatory

Authority of Pakistan for each medicine they produce and it takes up to three years to get the approval

Khalid said the last blanket increase of 7 percent in drug prices was allowed in July 2020. Since then the rupee has depreciated against the dollar by 67 percent (more steeply after restrictions on imports).

He said it would be impossible to import raw materials at current dollar value and market the medicines at the rates fixed by DRAP. He pleaded that the government must let market forces decide the medicine rates. He said with 800 pharmaceutical companies’ operating in Pakistan the prices would be competitive.

The control of DRAP on prices has on the one hand deprived Pakistan of numerous new innovative drugs because the relevant companies refused to accept DRAP’s fixed prices. But at the same time, it provided an opportunity to the domestic pharmaceutical companies to produce drugs at much lower rates than the multinationals.

The share of the domestic pharma industry increased substantially in the Pakistani market, while that of multinationals declined as they stopped producing many drugs because of price issues.

Currently, both the multinationals and the domestic pharmaceuticals are in the same boat. Now due to fixed prices notified by the regulator, even the domestic manufacturers do not find it commercially viable to produce many drugs and have discontinued them.

There is an acute shortage of numerous lifesaving and on the counter drugs like painkillers and cough syrups. In another week or two, most of the drugs would disappear from the market.

The drug manufacturers are meeting the authorities in Islamabad today (on Friday) to apprise them of the situation.