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ECC may allow drug price increase today

TAHIR DHINDSA

ISLAMABAD: The Economic Coordination Committee of the cabinet would on Thursday allow a substantial increase in the prices of all listed medicines and approve the import of 700 air-conditioned coaches by Daewoo Corporation of Korea at a cost of $ 69 million, sources told Business Recorder on Wednesday.

A final brief on increase in the medicine prices has been provided by the ministry of health, based on which the ECC will notify new prices.

The upward revision of prices had become essential due to many factors, of which smuggling to India was number one, sources said.

The industry-based sources said they have demanded 40 percent increase, which they are unlikely to get. The demand is based on a previous agreement of industry with the government, according to which the government was obliged to raise drug prices by 15 percent each year on November 1.

The drug prices were last increased on November 1,1996. The industry is hard pressed due to hefty increase in the exchange rate and the import price of raw materials, sources added.

Director General Health, Major General Ahsan Ahmad told Business Recorder that the government is not going to give them 40 percent increase at all. The demand is illogical, he added. However, he refused to comment on the quantum of increase while the summary was with the ECC.

Other sources say said that the ministry of health has made three different proposals for the price increase out of which the ECC will approve one with minor changes.

According to the first proposal the price increase list includes both listed and non-listed medicines. The increase according to this proposal could be 7 percent.

According to the second proposal the increase would be for selected medicines and therefore, about 15 percent increase would be allowed. The third proposal has, however, described a piecemeal increase in the prices in two phases to allow a total of 15 percent increase on some drugs.

According to sources, some of the life-saving medicines are being made expensive only to stop their smuggling to India and Iran. Angicid, a heart ailment drug is not available in the local market for being expensive in India and is smuggled across the eastern border.

The ECC is also likely to give Daewoo Corporation of Korea approval for the import of 700 air-conditioned coaches worth $ 6 9 million. The corporation will be allowed to repatriate profit overseas in dollar terms collected in the rupee.

The import of coaches is a part of the government's transport sector development strategy, agreed with the World Bank.