Government Orders Review of Drug Pricing Rules

Federal Minister for Economic Affairs and Establishment Division Ahad Cheema has instructed the Ministry of National Health Services and the Drug Regulatory Authority of Pakistan (DRAP) to urgently overhaul the country’s drug-pricing regulations. The proposed changes include revisions to the Hardship Policy and the structure of DRAP’s Policy Board, with the stated aim of preventing unjustified medicine price increases while ensuring essential drugs remain available.

During a meeting focused on pharmaceutical pricing, Cheema criticised the existing methodology used by DRAP to determine medicine price increases and called for a detailed review. He directed officials to establish a more transparent, evidence-based system in which proposed price revisions are supported by clear and verifiable justification.

The minister also ordered stronger scrutiny and independent checks within the pricing formula so that increases in companies’ costs are not automatically transferred to patients.

Cheema instructed the Secretary of National Health Services and DRAP’s chief executive to complete revised Hardship Policy rules as quickly as possible and submit them to the appropriate forum for approval.

He stressed that hardship provisions should be limited to legitimate cases and must not become a mechanism for transferring excessive commercial expenses onto patients.

The minister further directed authorities to revise the composition of DRAP’s Policy Board to improve technical expertise and strengthen evidence-based decisions. He specifically called for the inclusion of a health economist and a public health specialist.

The Ministry of National Health Services and DRAP agreed to the proposed changes, after which Cheema ordered officials to begin the revision process and forward the amendments for approval without unnecessary delay.

Cheema emphasised that decisions concerning medicine prices directly affect millions of Pakistani households. He said the regulatory system therefore needs to maintain a balance between the financial sustainability of pharmaceutical companies, medicine affordability and effective consumer protection.

DRAP officials briefed the minister on the current Hardship Policy and its implementation for essential medicines. Cheema raised concerns that some importers seek concessions under the policy while also pursuing higher medicine prices. He said the revised framework must ensure that government relief provided through the policy is reflected in final pricing rather than creating additional costs for consumers.

He also argued that importers already receiving tax benefits or other forms of government support should consider reducing their own margins instead of transferring the entire financial impact to patients. Cheema directed DRAP to review importer and retailer margins, which can reach around 40% in certain cases, and establish mechanisms to rationalise these margins under the updated rules.

The minister said businesses receiving government relief should share the burden through reasonable adjustments within the supply chain. Any such costs, he stressed, should not be passed on to consumers.

Cheema maintained that DRAP has a responsibility to preserve a fair balance in the pharmaceutical market by ensuring essential medicines remain accessible while protecting patients from unreasonable price increases. He added that commercial sustainability remains important but cannot be achieved at the expense of consumers.

The meeting also examined pricing arrangements for originator and existing medicine brands. DRAP officials explained that international reference pricing is currently used for originator medicines, with prices in neighbouring and other relevant countries serving as benchmarks.

Cheema called for this international pricing methodology to be supported by an independent verification mechanism. He said pricing decisions should rely on reliable information that accurately reflects actual market conditions.

He instructed DRAP to strengthen independent oversight and verification throughout the pricing process, saying a sustainable pharmaceutical sector must operate alongside affordable medicines and protection of the public interest.

The minister reiterated the government’s commitment under Prime Minister Muhammad Shehbaz Sharif to providing relief to citizens. He said access to reasonably priced medicines is directly connected to public welfare and that regulatory reforms would continue to balance the requirements of the pharmaceutical industry with consumer interests.

Senior officials, including Secretary National Health Services Muhammad Mehmood, DRAP CEO Dr Obaidullah and DRAP’s Director Pricing, attended the meeting.