GST on raw material aggravates shortage of 40 drugs

LAHORE: In the wake of 17pc GST on the import of raw material, production of medicines has considerably dropped and aggravated the shortage of, at least, 40 essential and lifesaving drugs in markets across the country.

Although, the federal government has announced to reduce 17pc GST on the import of raw material to 1pc, the shortage of 40 essential and lifesaving drugs persists, putting lives of many patients at risk.

The pharmaceutical manufacturing industry had forewarned the government about the manifold increase in the production cost of drugs, forcing it to halt the import of raw material due to the imposition of 17pc advance tax. “The raw material in stock has already been utilised,” said Qazi Mansoor Dilawar, Chairman, Pakistan Pharmaceutical Manufacturers Association (PPMA), which inevitably resulted in shortage of medicines in the market.

According to a survey of the market, at least 40 medicines, including life-saving drugs, are hardly available. The drugs include Alp tablet used for depression, Dexamethasone for asthma, cancer and joint pain, Epitab for epilepsy, Nervin for depression, Epival, Fexet D, Nitronal, Ventoline tablets and injections. Moreover, Epival In, Myrin P, Ketasol Inj, Loprin, Silliver tab, Phenergen Elixir, Tixylix Lincitilus, Chlooriptics Drops, Systane drops, Rivotril drops, Dormicum tablets, Winstor, Tritace, Sodamint, Schazobutil, Jardymet and Brufen are also reported to be in short supply. Lomotil, Panadol, Tan Primolut B, Progynova, Stilnix, Glucobay, Zentel, Avor, Gravibinan, Syp Gaviscom, Lipofundin and Inj Sorbid are also missing from the market.

The patients have been running from pillar to post to buy the lifesaving drugs from the market but to no avail.

A renowned activist and Drug Lawyers Forum Chairman Noor Muhmmad Mahar said that innocent people were suffering due to a deadlock between the government and pharmaceutical industry fighting over their claim to a larger slice of the pie. “The pharmaceutical companies always quote Paracetamol to convince others about how the industry was selling drugs cheaper than their production cost,” he said, adding that there were hundreds of examples where the industry was selling certain brands of medicines at 10 times higher rates than prices of other brands of the same drug available in the market. For instance, a 30-Tab pack of Norvasc 10mg of Pfizer is being sold at Rs805, while a 20-Tab pack of Zodip 5mg of the same salt, Amlodipine, by Zafa Pharmaceuticals was available at Rs26.46 in the open market.

“The pharmaceutical industry has been using the 17% GST card to pressurise the government to further increase drug prices by 20-25% despite a reduction of 17% advance tax to just 1%, which is also refundable. Poor patients will be the ultimate sufferers,” he added. Similarly, he said, the Drug Regulatory Authority of Pakistan (DRAP) has failed to display the price list of registered medicines on its website to ensure transparency.

When contacted, PPMA representative Uzair Nagra said that although the government had announced to reduce 17% GST to 1% on the import of raw material, but the industry had not received any Statutory Regulatory Orders (SROs) in this regard. “Even if the government claims to reduce GST from 17% to 1%, it means the government still did not completely exclude the industry from the GST framework,” he said, adding the government had exempted solar and seed import sectors from GST. “The production cost on certain medicines has even exceeded the Maximum Retail Price (MRP),” he said, adding that the industry could not produce Paracetamol at the cost of Rs2.50 and sell at Rs1.90.

Nagra claimed that the government had so far collected Rs40 billion from the pharmaceutical industry in the name of refundable sales tax but could not make the refunds yet, which put the industry under stress, depriving it of enough resources to import raw materials. “The PPMA is negotiating with the government over refund of Rs40 billion, complete exemption from GST and withdrawal of 1% after sales tax,” he added. “The federal government must completely exempt the pharmaceutical industry from 17pc GST, instead of reducing it to 1pc, over the import of raw material for the protection of industry as well as patients,” he added.

Nagra maintained that the PPMA had also demanded an immediate increase in prices of medicines from 20% to 25% to make up for the loss due to hikes in price of gas, electricity and petroleum products and increased manpower wages, which have led to a 45pc increase in production costs. DRAP Chief Executive Officer (CEO) Dr Asim Rauf did not respond to frequent calls and messages.