Government Moves to Overhaul DRAP Drug Pricing Formula and Hardship Policy.
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✧ GENERATE BRIEFING
The Federal Government has initiated a comprehensive review of the Drug Regulatory Authority of Pakistan’s (DRAP) medicine pricing mechanism. During a high-level oversight meeting in Islamabad, Federal Minister for Economic Affairs and Establishment Division Senator Ahad Cheema directed the Ministry of National Health Services and DRAP leadership to overhaul current indexation formulas to ensure price adjustments are evidence-based and protect patients from automatic cost-push inflation.The proposed reforms target the Hardship Policy, retailer and importer profit margins (which can reach up to 40% in certain categories), international reference pricing verification, and the restructuring of the DRAP Policy Board to include health economists and public health experts.
The federal administration is moving forward with structural changes to Pakistan’s pharmaceutical pricing regime. Federal Minister Ahad Cheema led a strategic review session instructing DRAP and health ministry officials to reform the mechanisms governing annual price indexation, hardship approvals, and supply chain profit margins.
The government aims to curb steep, unverified price escalations for essential life-saving medicines while maintaining pharmaceutical sector viability through rationalized cost-sharing.
Overhauling the Hardship Policy and Importer Margins
A central element of the proposed reform package is tightening the Hardship Policy, which allows drug importers and manufacturers to petition for price increases when production becomes economically unviable. Cheema directed authorities to ensure that hardship relief is granted strictly under verified supply-shortage conditions rather than serving as an avenue to pass excessive commercial costs onto retail consumers.
Furthermore, the government is examining high intermediate margins:
- Retailer and Importer Margins: Current trade margins reach up to 40% in certain product categories. The ministry has proposed that pharmaceutical companies and supply chain intermediaries absorb a portion of economic shocks rather than transferring 100% of cost hikes to patients.
- Independent International Reference Pricing: DRAP’s reference database—which benchmarks originator drugs against regional and international markets—will undergo independent verification audits to eliminate data distortions.
Restructuring the DRAP Policy Board
To improve institutional decision-making, the government plans to reconstitute the DRAP Policy Board by incorporating professional health economists and public-health specialists. This addition is intended to ensure that future pricing adjustments weigh macroeconomic indicators, public health outcomes, and household purchasing power alongside industry compliance costs.
