Comparison of Medicine Prices in Pakistan & India
Pakistan may often be at odds with neighboring India, but that has not stopped Indian products from being immensely popular in this country.
Indeed, these days, medicines have become the latest among Indian imports - which include movies and music - that have captured the fancy of Pakistani consumers.
In the North West Frontier Province, and especially in the adjacent tribal areas along the Pakistani-Afghan border, the medicines provide brisk business for drugstores.
All sorts of medicines from India are sold, including the most commonly prescribed drugs such as aspirin, Amoxillin, Ampicillin, Co-trimaxazole, Laxotanil, Ciprofloxine, Renitidin, Famotidine and Cemetidine.
Under Pakistani law, though, only medicines that are approved and registered with the health department can be sold in the country. Since the Indian drugs sold openly over the counter in the tribal areas are neither, the trade in them is illegal.
People, however, say officials are deliberately looking the other way because of the skyrocketing prices of Pakistani medicines.
Remarks Karim Khan, a tribesman from Khyber Agency, "By ignoring the Indian medicines, the government is doing great service to the poor people."
Some doctors are now even telling poor patients to seek out Indian medicines. This is largely because Indian drugs can be 10 times cheaper than those manufactured in Pakistan by the same multinational companies (MNCs).
Malik Akhtar Khan, who has been a pharmacist in Peshawar for decades, says Pakistani drug prices are high because the government allows the MNCs to import raw materials from their parent countries. In comparison, he says, pharmaceutical firms in India are bound by law to use local materials. In addition, says Khan, "MNCs, which normally have very high budgets, exploit their trademark."
India, of course, is known for having no adequate patent system for pharmaceuticals, save for the 70-year patents for drug production processes. This has enabled Indian firms to produce generic drugs that they sell at a fraction of the cost of branded medicines. As a result, MNCs have also been forced to lower their prices.
The Indian drug manufacturing system - which will undergo changes under the government's commitments to world trade rules - has been the envy of many developing countries.
Along with other goods, Indian medicines are smuggled into Afghanistan into Pakistan's tribal areas, and then eventually find their way to Peshawar. Afghanistan receives thousands of US dollars worth of medicines each month from India under a bilateral agreement. But some unscrupulous agencies in Kabul are apparently making huge profits from the arrangement and selling them in the tribal areas.
Medicines from India are likely to become even more popular in this country as Pakistan's Ministry of Health seeks a 6 to 10 percent increase in drug prices due to various economic factors such as the devalued Pakistani currency and repeated rises in energy costs.
As it is, many medicines are already being sold at higher prices in Pakistan compared to other South Asian countries.
According to a study conducted by the Consumers International Regional Office for Asia-Pacific, the prices of 17 out of 21 commonly consumed drugs are higher in Pakistan than in India, Nepal and Bangladesh.
The Pakistani government has tried to address this by allowing the import of drugs from China, Bangladesh, Bulgaria, Poland and Yugoslavia. But health activists say the tactic has failed to work because of what they believe to be collusion between the MNCs, health professionals and government functionaries.
Zafar Mirza of the non-governmental organization Association of Rational Medication even hints of possible irregularities in the registration of medicines. He notes, for instance, that while the World Health Organization itself has a list of 270 drugs covering treatment of various ailments, Pakistan has more than 27,000 registered medicines.
Mirza also points out that while the registration of a drug takes some two years in the United Kingdom and the United States, Pakistan's Drug Registration Board (DRB) "has been registering roughly eight drugs on every working day during the last few years".
Meanwhile, some quarters have raised concerns regarding the safety of medicines from India. But one official of the Federal Drug Quality Control Board in Islamabad has said that laboratory tests conducted on samples of the smuggled drugs revealed most of them as safe.
Pharmacist Malik Akhtar Khan says one way of easing such worries is to simply register the Indian medicines, since this would mean these would have to pass through the regular government controls.
"When the need arose, Pakistan imported sugar from India," he says. "Why can't the government go for Indian drugs so that people can have access to cheaper drugs?"
The deregulation policy introduced by the government in the pharmaceutical sector since 1993 has resulted in a jump in prices of life saving drugs in Pakistan, with the increase put by WHO at 87 percent in the post-deregulation period, as against 30 percent in the deregulated era.
A WHO report has ascribed the price increase mainly to two factors, ie shortage of medicines in the market and delayed registration of drugs. These factors have also served as a major impediment to attracting foreign direct investment to Pakistan's pharmaceutical sector, which could have ensured availability of drugs at affordable rates to the buyers.
The WHO report maintains that despite the tightening of the patent law since 2000 the government of Pakistan has yet to adequately address the problem of manufacture and sale of spurious and sub-standard drugs in the country. Other major factors cited in the WHO report that have stymied the growth of Pakistan's pharmaceutical industry include low investment in research and development and lack of allocation of resources required to compete with multinational companies for undertaking new drug research.
Absence of a sound domestic industrial base for the manufacture of pharmaceutical materials needed as inputs has forced the government to resort to expensive imports from Europe, Japan and China, which has contributed to pushing up the drug prices in the domestic market.
According to WHO estimates, life saving drugs in Pakistan are four to 12 times (!) costlier in Pakistan than in India. Pakistan's pharmaceutical sector today is faced with the twin threats from the Indian and the Chinese pharmaceutical sectors.
Strong growth of Chinese pharmaceutical industry (20 percent per annum), relatively lower labour costs, existence of a large number of profit-oriented research and development institutions, and a liberal tax holiday regime are among the main factors that have given China a competitive edge over Pakistan.
Likewise, the threat from the Indian pharmaceutical industry stems from better developed products and superior quality of R&D, the financial and scientific benefit of which is siphoned back into the development of new products.
A major flaw in Pakistan's pharmaceutical sector has been its failure to develop indigenous basic drug manufacturing expertise and infrastructure, which has forced many pharmaceutical companies to resort to expensive imports of raw material from abroad.
There has, meanwhile, been a growing debate over the perceived links between doctors and representatives of pharmaceutical companies, amid accusations that many of these salesmen often resort to bribing medical practitioners to influence them to prescribe specific medicines. Further, as pharmaceutical companies have privileged information about their products it helps them manoeuvre the loopholes in the healthcare system to their advantage.
Many suppliers often tend to bribe procurement personnel for approval of higher prices, the financial burden of which is passed on to the patients. They also at times induce providers to use their products at inflated rates even when cheaper, but equally effective, alternatives are available in the market.
Some of the pharmaceutical companies are said to bribe regulatory agencies to make them develop policies in their favour. For example, pharmaceutical companies may influence government agencies to impede competition from generic drug manufacturers, or equipment producers may try to have regulations changed so that licensed facilities will be required to market the products. In the case of direct public provision of healthcare services the most common forms of abuse involve kickbacks and graft in procurement.
The imposition of GST too has played a crucial role in pushing up medicine prices in Pakistan. For instance, in December 2001 the government had announced a drug price increase of 3% on controlled and 4% on decontrolled category of drugs respectively. But the prices went up by 40 percent. Such increases in drug prices are due largely to the tricky policies of the government.
Incidentally, the GST policy is symbolic of the elitist economy - where rich become richer and are diligently protected by the state, and the poor become poorer. For instance, Rs 4 billion collected from this sector at the cost of the poor and the sick could easily have been collected from the elitist classes. Press reports in March 2005 had stated that pharmaceutical companies were providing drugs to the market at far higher prices than those at which the same medicines were offered to hospitals, which allowed the companies to make huge profits, while placing an immense burden on the consumers.
It would be instructive here to quote Article 38(a) and (d) of the Constitution of Pakistan which says: "The State shall secure the well-being of the people, irrespective of sex, caste, creed and race, provide basic necessities of life such as medical relief for all such citizens as are permanently or temporarily unable to earn their livelihood on account of infirmity, sickness or unemployment."
Is the government fulfilling its constitutional obligation? It is true that drug prices all over the world, including the US, have registered a sharp increase. But in Pakistan many additional factors, including ruthless manipulation by market forces, have further complicated things.
The government should develop the infrastructure and expertise required for basic drug manufacturing. Secondly, it should ensure local production of drugs whose patents have run out to lower the prices of life saving products. And lastly, it should allow import of basic raw materials from India in view of the latter's expertise in this sector till Pakistan's pharmaceutical industry comes of age.
Copyright Business Recorder, 2007
