The State Bank of Pakistan’s (SBP) refusal to issue letters of credit (LCs) may trigger a medicine shortage as local banks are not issuing the document required for the import of raw materials and medical devices due to the dollar liquidity crunch, pharmaceutical manufacturers have warned.
“Due to a lack of dollars in the nation, the State Bank of Pakistan (SBP) has verbally ordered all local banks to refrain from issuing Letters of Credit (LCs) for the import of Active Pharmaceutical Ingredients (API). We have the funds to buy the raw materials for medicines from other countries, but Pakistan’s dollar liquidity crisis could result in a shortage of medications in the coming weeks and months, said Arshad Mahmood, Chairman of the Pakistan Pharmaceutical Manufacturers Association (PPMA), North Region, to reporters after the meeting of the National Assembly’s Standing Committee on Health.
Most pharmaceutical companies only have two months’ supply of raw materials on board, and they are unable to place orders for future raw materials. If LCs do not open soon, there may be a scarcity of medicines similar to the one that stopped most of the country from having access to Panadol.
“The Panadol shortage was due to the price issue but now we are facing double jeopardy as on the one hand prices are not being increased while on the other hand, raw material is not being imported due to dollars’ unavailability with the central bank,” Arshad Mehmood added.
The PPMA’s chairman for the North Region briefed the MPs that imports make up the majority of Pakistan’s pharmaceutical industry’s raw materials.
Mahmood stated that the devaluation of the rupee, rising fuel prices, higher transportation costs, and growing salaries were all contributing factors to the rising cost of manufacturing as well as the rising cost of raw materials.
The PPMA representative further explained that, in contrast to other businesses, the state and manufacturers regulated the prices of medications, and they were unable to raise them on their own. Since their cost of production has become intolerable for manufacturers, certain of the necessary drugs are no longer produced and are not offered on the local market, he noted.
Convener of the National Assembly’s Standing Committee on Health Nisar Ahmed Cheema claimed that pharmaceutical manufacturers had agreed to provide medicines at a 50% discount to public health facilities and hospitals in the country, saying it was a big relief for poor patients.
He lauded the Drug Regulatory Authority of Pakistan (DRAP) and its Chief Executive Officer (CEO), Asim Rauf, for providing high-quality medicines to Pakistanis, and stated that the government was reviewing drug prices and policies at the highest levels, but he gave the assurance that no decision would be made that would be detrimental to the needs of the populace.
