The usual justifications can
hardly convince a people who are already paying much higher prices
By Syed M. Aslam
April 01 - 07, 2002
The federal government imposed a 15 per cent general
sales tax on all kinds of drugs — allopathic, homeopathic, imported,
locally manufactured, non-essential and life-savings — as well as raw
materials, manufactured locally or imported, with immediate effect on
the 21st of this month. Even the life-saving drugs thus far exempted
from the sales tax were not spared.
In a country where public health has never remained a
priority of any of the successive governments and where the
poverty-stricken population is increasingly driven to self-treatment by
purchasing drugs over-the-counter to save doctor visitation fee,
imposition of the sales tax sounds like a cruel joke. Only it is not a
joke and yes, it is cruel.
The usual justifications can hardly convince a people
who are already paying much higher prices for drugs compared to other
countries in the region. We would like to quote only a handful of
examples here to prove this point: a widely used drug for ulcer
treatment, manufactured by multinational Glaxo-Wellcome under the brand
name Zentac, retails for Rs 8.50 per tablet here while the same drug
made in neighbouring India under the same brand name by the same company
retails for less than one-tenth that price at Rs 0.60 per tablet. The
same drug, the generic name of which is Ranitidine, manufactured by many
local pharmaceutical companies under various brand names retails for Rs
5 per tablet.
The similar is the case with another widely-used drug
for treating high blood pressure. A 14-tablet 50-mg blister strip of the
drug manufactured by multinational ICI under the brand name 'Denormin'
retails for Rs 85 or Rs 6.07 per tablet. The same drug manufactured by
the same multinational with similar brand name retails for Rs 25 per 14
tablets or Rs 6.07 per tablet in India which is almost three-times of
its price here. The same formula manufactured by local pharmaceutical
Nabi Qasim under the brand Normitab retails for Rs 30 per 14 tablet or
Rs 2.14 per tablet.
The 14-tablet blister pack of Omeprezole, an
ulcer-treating brand manufactured by multinational Astra Company,
retails for Rs 690 or Rs 49 per tablet while the same formula
manufactured by a local company Wilson under Encid brand retails for Rs
140 or Rs 10 a tablet.
A ten-tablet blister pack of 250 mg formula Ofloxcin,
manufactured by a number of multinationals here in Pakistan retails for
an average Rs 300/10 or Rs 30 per tablet. The same formula produced by
many local companies retails for one-third this price at Rs 100/10
tablets or Rs 10 per tablet at par with many multinationals in India.
Ofloxcin is categorized as a life-savings drug.
Another life-saving formula Ceftrixone, manufactured
under the brand name of Rocephin 1 gram injection by multinational Roche
retails for Rs 477 per injection while the same formula manufactured
under the brand Zeftrox by local company Zafa retails for Rs 162 per
injection. The same injection manufactured by a number of companies in
Bangladesh under the generic name retails at an equivalent of Rs 100.
What makes Ceftrixone, used to heal deep wounds as well as to dry
post-surgery abrasions, even more expensive is that fact that its course
comprise a minimum of 6 and maximum of 24 injections depending on the
nature of wound. Imposing a 15 per cent sales tax on such a necessary
life-saving medicine is cruel indeed.
Talking to PAGE the senior vice president of
Wholesale Chemists Council of Pakistan, Shakeel Nagar, blamed the high
drug prices in the country on two major factors. Number one the immense
influence that multinationals enjoy in the corridors of power as well as
in the market. And secondly, the brand instead of generic culture in the
other countries of the region. "In a country reeling from high
illiteracy rate doctors pampered by multinationals use their position as
an agent for the pharmaceuticals, particularly multinationals which
spend immense monies to reciprocate the favour for mutual benefits. But
the local manufacturers can not absolve themselves of any responsibility
as the prices of their products on the whole are at par with the
multinational companies in India."
Talking to PAGE the former chairman of Karachi
Chamber of Commerce and Industry's Health Committee, Nasir Noor, said
that the announcement by the government to form a committee to identify
the life-essential drugs would result in stoppage of all manufacturing
activities in the country. "It will also result in stoppage of port
clearance of all imported drugs and active ingredients for the ten days
by which the committee has to submit its findings without which the
customs authorities would not be able to clear a consignment without the
He said that the CBR says that it would collect a
revenue of Rs 4 billion a year from the sales tax. "That means that
in the remaining three months of the current fiscal the government will
collect Rs 1 billion revenue. Actually the real amount collected will
only be Rs 500 million as half of the drugs and raw materials imported
would be exempted from the sales tax as it would be used by government
and charitable hospitals and organizations. This is not the kind of
revenue worth risking the public good will."