Manufacturers have warned that the supply of medicines could be disrupted if prices are not increased as raw material prices have increased by up to 300 percent.
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As drug manufacturers are increasing pressure to increase drug prices, the Ministry of Health and Population has pulled Narayan Prasad Dhakal, Director General of the Department of Drug Management, to the ministry. The ministry has pulled him after Dhakal, who is the head of the drug regulatory body, was accused of colluding with drug manufacturers to increase drug prices.
A three-member committee has been formed to investigate the complaint filed with the Office of the Prime Minister and Council of Ministers. ‘I have not received a formal letter recalling me to the ministry, but I was informed about the ministerial decision on Thursday,’ Dhakal said. ‘Despite pressure from drug manufacturers, we have not increased the price of any drug, nor have we given permission to any company to do so.’
Recently, Nepali pharmaceutical companies have been pressuring to increase drug prices, citing the increase in raw material prices due to the ongoing conflict in West Asia. According to them, the price of raw materials has increased by up to 300 percent. They claim that the cost of medicines has also increased due to the appreciation of the US dollar, increased transportation costs, fuel prices, and shortage of medical grade plastic.
Representatives of the Nepal Pharmaceutical Manufacturers Association had also sought permission to increase the prices of all medicines by 10 percent. According to officials of the Department of Drug Management, although there are thousands of medicines in the market, the government had set a price limit for 96 types of essential medicines about nine years ago. Earlier, a price limit was also set for 21 essential medicines.
‘Manufacturing companies are free to determine and increase the prices of their products themselves,’ said an official on condition of anonymity. ‘There was a plan to set a price limit for other medicines as well, but due to lack of procedures, the department has not been able to set a price limit as per the free market policy adopted by the government.’
Representatives of the pharmaceutical manufacturers, however, have said that smooth supply of medicines will not be possible unless the prices are increased. They have claimed that permission is not required to increase the prices of each product and that there is no intention to take advantage of the situation. ‘Even though the prices of all commodities, including raw materials, have increased, the prices of medicines have not increased in the same proportion,’ said Santosh Baral, general secretary of the Nepal Pharmaceutical Manufacturers Association. ‘If prices are not increased, manufacturers cannot produce medicines at a huge loss.’
According to Baral, earlier raw material suppliers used to provide price lists for 15 days and demand payment, but now they are unable to provide price lists even for a week. Since the prices of raw materials are changing daily, manufacturers say that suppliers only provide rates according to the prices fixed at the time of purchase. In addition, they say that there is a shortage of medical grade plastic and the price of packaging materials has also increased.
There are 83 domestic pharmaceutical manufacturing companies in Nepal, which produce about 50 percent of the medicines used in Nepal. The pharmaceutical sector employs more than 30,000 people and its annual market is worth about 60 billion rupees. More than 25,000 pharmacies are operating across the country.
