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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 sales tax."

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."