The effects of Pakistan’s declining economy are now affecting pharmaceutical companies as well. The country’s pharmaceutical industry has reported that forty percent of local companies in the country are on the verge of closure.
Pakistan’s pharmaceutical industry has warned that unaffordable production costs caused by a depreciating rupee, import barriers and rising inflation are forcing dozens of companies to shut down their businesses.
Pakistan’s pharmaceutical crisis is escalating due to the delay in the release of key bailout funds of $1.1 billion or 1.03 billion euros from the International Monetary Fund (IMF).
Drug production in the South Asian country has fallen by 21.5 percent in recent months. The main reason for this is that the commercial banks facilitating the import of raw materials are refusing to provide guarantees.
Pakistan Pharmaceutical Manufacturers Association Chairman Syed Farooq Bukhari told DW that banks had resumed issuing letters of credit (LCs) in January this year as a guarantee for payment of imports, but in light of low foreign exchange reserves. , banks approved barely 50 percent of the applications. It should be noted that approval of these documents is issued only to importers of goods who guarantee payment within a specified period.
According to Farooq Bukhari, as a result of only fifty percent of LC applications being approved, there is a strong possibility of “drug shortage” as well as “hoarding”.
IMF strict conditions
Last month, a team of IMF negotiators held talks with Pakistani Finance Minister Ishaq Dar in Islamabad, but returned to the US without reaching an agreement. Most of the drugs and other pharmaceutical products manufactured in Pakistan use imported raw materials, the prices of which have risen due to the massive depreciation of the Pakistani rupee over the past year.
The prices of medicines are determined by the federal government on the recommendation of the Drug Regulatory Authority of Pakistan (DRAP). Officials attribute LC’s problem to the country’s dangerously low foreign exchange reserves and insist it will remain so until the IMF issues a $1.1 billion bailout tranche. Prime Minister Shehbaz Sharif’s administration is not accepting the request for a 38.5 percent hike in medicine prices for fear of public backlash as inflation has already reached 31.5 percent.
Syed Farooq Bukhari, chairman of the Pakistan Pharmaceutical Manufacturers Association, says that the production of some pharmaceutical products has become unviable as the price of the US dollar has risen from 230 to 270 Pakistani rupees in a few weeks, while fuel Rates and utility charges are also increasing. He said, “Four pharmaceutical multinational companies have already left the country and another has gone for force majeure, while 40 local companies have officially stated that they are closing due to unaffordable cost of production. are going towards.
The problem of drug shortages
Pharmaceutical companies have also complained that several ships and containers carrying raw materials and medical equipment imported from China, Europe and the US have been stuck at ports due to delayed payments due to a shortage of dollars in the market. .
The Prime Minister of Pakistan formed a committee two months ago to look into the problems of the pharmaceutical industry, but the committee has not yet met the drug manufacturers. Meanwhile, the deepening crisis threatens patient care as well as millions of jobs. At this time, shortage of medicines has started to occur all over Pakistan.
Muhammad Noor Mehr, Chairman of Pakistan Drug Lawyers Forum, has pointed out that there has been a decrease of about 10% in the supply of important life-saving drugs. He also claimed non-availability of diabetes, heart, kidney and asthma medicines in the market and said that some imported medicines and raw materials are awaiting clearance at the ports.
Patient surgery postponed
Doctors at the Federal Government Polyclinic, the second largest government hospital in the capital Islamabad, confirmed the shortage of medicines and said they included cataconazole (fungal infection), Ryzec injection (gastroesophageal problems), Vita 6 (tuberculosis). Daq), including medicines used against trevament (diabetes). Also, injections and blood thinners required for anemia and neurological impairment are not available. These are essential medicines, due to non-availability of which surgery or operation cannot be performed.
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