Drug shortages deepen as Pakistan debates price controls

Shortages of some drugs in Pakistan are mounting as the government continues to dither over whether to keep price controls on a host of drugs.

Both domestic and Western drug manufacturers have urged the government to act, saying shortages could become extensive and some foreign companies may just decide it is not worth doing business there, reports The Express Tribune. Citing sources, it says there has not been a formal price increase since 2001.

There already have been shortages of some drugs, The Express Tribune reports, because margins got so thin that domestic drugmakers quit producing them. Last month, the American Business Council, which represents 65 American drug manufacturers in Pakistan, warned authorities that if matters are not sorted out soon, Pakistan could face shortages of more than 800 drugs. The ABC said its three largest clients--Pfizer Pakistan ($PFE), Johnson & Johnson ($JNJ) and Abbott Laboratories ($ABT)--are already being affected by the supply chain disruptions. The organization played the economic development trump card, saying Western companies might reconsider their commitment to Pakistan if problems persist.

Meanwhile, analysts are warning the government that a price control policy will not be healthy for the industry in the long run, reports The Economic Times. Analysts say experience elsewhere shows price controls will not improve health access but will limit drug innovation in the country at a time when rising life expectancy calls for new varieties of pharmaceuticals.

David Taylor, a professor at the University of London, points to his experience in India, which is currently debating the expansion of price controls on drugs. "Price caps have the opposite effect, though, by disincentivising the sale of innovative drugs or drug research in India. Patients with incurable endemic diseases will continue to suffer in silence since cures for such diseases may no longer be actively researched," he said.

- read The Economic Times story
- more from The Express Tribune

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