Government permits price increases for Panadol.
Prices of tablets increase by 48 to 56 paisa per tablet and bottles of syrup by Rs12.8.
On Wednesday, the government decided against subsidizing the manufacturer or waiving the 26% import charges on the raw ingredients required to make Panadol, a medication used to treat pain and fever, because it could not find the financial room to do so.
Due to International Monetary Fund (IMF) spending restrictions and its propensity to promote domestic raw material production, the cash-strapped government’s options are limited.
According to the judgment, the government permitted an increase in the pricing of the necessary medication by 48 to 56 paisa per pill and Rs12.8 per bottle for its liquid syrup.
The price rise translates into a 25.6% increase in Panadol drug prices and a 12% increase in Panadol syrup pricing.
According to a statement released by the Finance Ministry, Finance Minister Ishaq Dar reviewed the retail pricing of Paracetamol products during a meeting with the leaders of the major pharmaceutical companies.
The ministry reported that the rates of paracetamol 500 mg tablets at Rs2.35 per tablet, paracetamol extra 500 mg tablets at Rs2.75 per tablet, and syrup at Rs117.6 per bottle had been agreed upon with the pharmaceutical industry.
The ministry noted that with the decision, production of paracetamol products had resumed and that the increase was approximately half of what they had requested.
The Health Ministry had suggested raising the price of Paracetamol 500mg from Rs1.87 per pill to Rs2.67, a 43% or 80 paisa increase. However, the finance minister consented to a 48 paisa rise.
Similar to this, the ministry had suggested raising the price of Paracetamol Extra from Rs2.19 to Rs3.32 per tablet, a rise of Rs1.13 per tablet. However, it was raised by the government by 56 paise.
After the federal cabinet repeatedly rejected the request to raise the costs, the company that makes these medications, GlaxoSmithKline Pakistan, claimed force majeure on the manufacturing of three Panadol variants: Panadol tablets, Panadol extra tablets, and Panadol liquid.
After the corporation chose to lower its output, there was a shortage of medicine on the market. In recent months, its demand has grown as a result of flood-related illnesses and the rise of dengue fever.
The Drug Pricing Committee had suggested raising the cost of Panadol by 12% to 52% in January 2022. But the plan was turned down by the federal cabinet in August.
Last month, the issue was brought back before the cabinet along with a suggestion to raise the cost of other medications, but the federal cabinet did not alter its initial decision.
The issue of waiving a 20% custom charge and an extra 6% customs duty on the import of raw materials for the production of Panadol was also brought before the federal cabinet last month.
The fact that certain local firms were also preparing these raw components for the completed goods prevented the cabinet from waiving the tariffs, nevertheless.
Consumers have paid a hefty price for the successive governments’ decisions to safeguard local industry, from medications to locally made autos.
In order to prevent price increases and any backlash from the public and his political rivals, Prime Minister Shehbaz Sharif had instructed the Ministries of Health and Finance to draft a plan to provide subsidies to the Panadol maker.
Fakhar Alam, the health secretary, did not respond to a request for remarks.
The fact that paracetamol is subject to a high rate of duty since it is made in-country is correct, according to FBR spokesman Afaque Qureshi. However, schedules 5 and 6 each apply 0% CD and 0% ST to the paracetamol raw materials ACETIC ANHYDRIDE PCT 2915.2400 and PARA-AMINO-PHENOL PCT 2922.2900, respectively.
According to a senior government official, Pakistan has pledged to the IMF that it will not provide subsidies, regardless of the economic implications.
The IMF put the government in a bind by requiring it to produce Rs153 billion in primary budget surpluses, but despite having no fiscal room, it nonetheless gave the exporters the Rs100 billion in subsidies.
In addition, the government approved an additional budget of Rs17 billion for the plans of the lawmakers and granted supplementary budgets worth Rs410 million to address the PTI’s protracted march.
Despite there being no funding in the budget, the Finance Ministry granted a supplementary budget of Rs650 million for the Ministry of Information to commemorate the nation’s 75th Independence Day. Despite the severe economic downturn, there are 75 members of the cabinet, with more to be added in a few days.
