FTER more than a year of delaying the matter, the government is finally gearing up to pass a drug pricing policy.

Currently, drug prices, which continue to be administered by the government, are being adjusted under ad hoc mechanisms since the last price adjustment was done in 2001. This is an extremely sensitive matter in a country where proper healthcare and medicines are already beyond the reach for a large segment of the population. Adding to the complications are the concerns of the drug manufacturers, who feel they have been pushed against the wall by a 13-year-long delay in the revision of drug prices while their production costs escalate rapidly. According to pharma industry representatives, three large multinational manufacturers have already left the market since 2008, with the latest exit in the last few months. The pharma industry had been ramping up its push for a pricing policy since last year, and finally managed to obtain a directive from the Sindh High Court giving the government the deadline of Dec 29 to produce a comprehensive policy.

As the deadline looms, wheels have finally begun to turn. A series of meetings of the policy board, tasked with producing the policy, have been held and input sought from industry stakeholders. Three separate pricing mechanisms are being debated. They are cost plus pricing, average pricing, and reference pricing. Industry favours reference pricing that would peg the prices of drugs to a basket of prices from other countries of a comparable socioeconomic bracket. Average pricing makes little sense since it does not factor in quality differences between the same medicines in different price ranges. Cost plus pricing is already proving too difficult for the government to administer in other areas, notably power and gas. It has serious transparency issues, and opens the door to graft. Reference pricing would see prices rise across the board, something the government is very nervous about. It is important to keep the interests of the poor in mind when dealing with drug prices, and it is also important to ensure whatever pricing methodology is ultimately agreed on carries an automatic adjustment mechanism in it to ensure transparency and reduce the potential for allegations of graft. The government has wasted too much time on this important issue. It is time to bring closure to it and produce a drug pricing policy that does not cause a flight of investment while safeguarding the right of access to quality medications for the poor.