Drug prices stay put

  • Announcements should be realistic


Perhaps the only positive that Prime Minister Imran Khan will take away from the drug-prices episode is that he will realise the limits of prime ministerial power. He had ordered that they come down after their recent increase. They didn’t, and this was despite the series of raids conducted by the Drug Regulation Agency of Pakistan. It is now being said that prices are proper, and the increases merely reflected the devaluation of the rupee. That is poor consolation for the people most affected, who are already ailing, and are now faced with the prospect of more expensive medicines. The worst hit are those suffering from chronic illnesses, kept in check only by medication. The increase in the price of imports affects even drugs manufactured domestically, because the active ingredient is usually imported.

Prime Ministerial fiat does not work in such cases, because manufacturers are in the private sector, and cannot afford to sell below cost indefinitely. Only the state can do that, and in this age of IMF packages, such a subsidy would be impossible, and even without the need for IMF packages, such steps can only be taken if there is some revenue coming in to meet this expense. The pharmaceuticals industry must accept some of the blame, but it cannot be ignored that apart from the precipitate fall in the value of the rupee, drug prices have gone up worldwide, and thus dollar prices have gone up, making the effect worse.

It is all very well, and populist, to order prices down. However, it only works for a limited period even in the case of absolute monarchs or military dictators, and not at all for elected officials, as in the present instance, who are not seen as arbitrary givers of orders, but as achievers of compromises between various interest groups. Prime Ministers need to be briefed, and even if this means that they cannot cut a fine figure and lose some spontaneity, it would be better for the country as a whole, indeed even for the historical reputation of the Prime Minister if he earned a reputation for careful consideration. Much can be done in the health sector to make life easier for the common man. However, that would require the sort of deep consideration the Prime Minister’s orders did not show.