Drugs, prices and power

The News,Friday, January 10, 2014

From Print Edition


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A powerful private industry defying the orders of regulators should not come as a surprise. In fact, in
the case of medicines, it had been universally predicted that Nawaz Sharifs decision last November to
withdraw a proposed 15 percent price hike was simply a temporary populist measure that would soon
be abandoned or ignored by drug companies. The latter has proven to be the case except the
pharmaceutical companies have been even more shameless than expected, raising the prices of
medicines from anywhere between 20 and 80 percent. The government may not come right out and
say it but the general philosophy here on pricing, as seen with the constant attempts to raise
electricity and gas prices, is that they should be as high as the market will bear. Such a Darwinist view
could be tolerated when it comes to luxury, consumer items but it just comes off as heartless when
applied to desperately-needed, life-saving items like medicines, whose demand is relatively inelastic
because of how vital they are. Were it up to the drug companies, without a regulator setting prices,
the pharmaceutical companies would run amok gouging patients who need the drugs.

The Drug Regulatory Authority of Pakistan (DRAP) will now have to haul up the pharmaceutical
companies and levy a large, punitive fine against them for disobeying the regulator. The government
should step out of the way of the DRAP no matter how beholden it feels to the executives that head
the drug companies. With little government assistance being provided to those who cant afford drugs,
allowing such price-gouging will only increase the misery of the public. When medicines should be
subsidised by the state, we have instead ended up in a situation where they are complicit in making
us pay even more than the regulator deems necessary. The PML-N should also take this opportunity to
re-examine its priorities. All its actions so far have led to widespread inflation throughout the
economy. Increasing the price of petrol and gas makes it more expensive to transport goods around
the country, leading in turn to increases in the prices of everything else, including food. The
governments priority needs to be the long-suffering people who are told that their pain will have to be
increased because the IMF or some other distant entity demands it. The time for putting their
demands over our needs should now be over.