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Govt to raise medicine prices by month's end

TAHIR DHINDSA

ISLAMABAD: The government has decided to substantially increase the prices of all listed medicines, Maj. General Ahsan Ahmad, Director General Health, said on Wednesday. Price increase will be notified by end of February.

Talking to a group of reporters here, he said due to many factors it had become essential to upward revise the prices, of which smuggling was number one.

Industry-based sources have, however, said that they have formally requested the government to allow a 40 percent increase on all drugs.

However, he rejected the previous government's agreement with the industry, according to which, the government was obliged to raise drug prices by 15 percent each year on November 1 every year. "The prices will be increased only when realistically required," he said.

A summary has been prepared in this regard, which after fine tuning from the Economic Coordination Committee (ECC) and the cabinet, will take the final shape. The price increase list includes both listed and non-listed medicines. The drug prices were last increased on November 1, 1996.

DG health said due to a host of factors there was a real decrease in profitability of pharmaceutical industry due to which it was in a very bad shape and the prices had to be increased. Dollar exchange rate has gone up. Added together, the inflation during this period had been more than 40 percent, at the rate of 13 percent per annum. And, General Sales Tax has been imposed, which has affected the prices of raw materials.

But, smuggling to and from Iran and India was the major problem, he said. Angicid, which is a life-saving drug was short in the market as it was being smuggled into India where its prices was higher.

Answering a question, Maj general Ahsan said his government was taking decisions on merit and was not bothered about the fact that certain quarters are out to politicise it.