SHC rejects pharma firm's pleas seeking hike in drug prices
The verdict, delivered by a division bench comprising Acting Chief Justice Muhammad Junaid Ghaffar and Justice Mohammad Abdur Rahman, had the core of the legal dispute originated from a pricing of three commonly used medicines including Brufen (tablet) 200mg, Brufen Suspension 120ml, and Thyronorm (Tablet) 125 mcg.
Abbott sought an annual MPR increase of up to 10 percent for the fiscal year 2023-24. The company's argument hinged on the historical categorization of these medicines as 'lower priced drugs' under Rule 10 of the Drug Pricing Policy, which traditionally entitled them to a CPI-linked increase of up to 10 percent. Abbott asserted that it had submitted the required calculations to DRAP on July 1, 2024, and that the authority's failure to issue a decision within the stipulated 30 days should, under Rule 7(2)(ii) of the policy, result in their self-determined revised prices being deemed approved and officially notified.
DRAP, represented by the Assistant Attorney General for the Federation of Pakistan, contested this position. The regulatory body asserted that the MRPs of these specific medicines had, over successive years of CPI-linked adjustments, gradually escalated and now surpassed the maximum thresholds prescribed for 'lower priced drugs' under Rule 10(1) of the policy. Consequently, DRAP had reclassified them as 'other drugs,' thereby capping their permissible annual increase at 7 percent instead of the 10 percent sought by Abbott.
This reclassification and DRAP's subsequent decision were upheld by its Appellate Board, compelling Abbott Laboratories to seek judicial intervention through the constitutional petitions, specifically challenging DRAP's order dated March 12, 2025, and previous orders from November 7, 2024, as 'illegal, unlawful, unconstitutional, without jurisdiction, malafide, and of no legal effect.'
The High Court, in its detailed judgment, rejected Abbott's argument for 'deemed notification' or 'deemed approval.' The court clarified that rules allow for the deemed issuance of revised MRPs only if the submitted calculations are 'in conformity with' and represent 'correct calculations' under the policy. Since Abbott's claim was predicated on categorizing the medicines as 'lower priced drugs' despite their MRPs having already crossed the officially notified thresholds, the court held that Abbott's calculations were not policy-compliant.
Addressing Abbott's contention that the same medicines were recognized as 'lower priced drugs' in the preceding year despite exceeding the threshold, the court stated that even if such a regulatory oversight occurred previously, it could not justify repeating the error. The court underlined the legal maxim that 'two wrongs do not make a right,' rejecting the notion that a past administrative lapse could serve as a binding precedent or justification for current policy violations.
The court also drew attention to a crucial procedural lapse by the Ministry of National Health Services, Regulations and Coordination. The judgment noted that under Rule 10(2) of the Drug Pricing Policy, the Ministry is legally obligated to revise the thresholds for lower-priced drugs annually in accordance with CPI changes. This statutory requirement, the court observed, had not been fulfilled, thereby indirectly contributing to pricing, however, because Abbott Laboratories had not directly challenged this specific omission in its petitions, the court refrained from issuing a definitive order on this matter due to jurisdictional limitations.
Nonetheless, the court acknowledged that the issue 'warrants attention' and granted Abbott Laboratories the liberty to pursue this concern independently before the Ministry or any other competent legal forum. The court directed that any such representation filed by Abbott in this regard must be decided upon by the respondent within 60 days.
The Sindh High Court found no merit in Abbott Laboratories' plea for a 10 percent price increase. It upheld the decisions of DRAP and its Appellate Board as 'legally correct,' given the undisputed fact that as of July 1, 2024, the MRPs of the disputed medicines had indeed exceeded the thresholds specified for lower-priced drugs, thereby disqualifying them from such categorization.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
20 hours ago
- Business Recorder
PSX kicks off FY26 with 6.1pc WoW gain
KARACHI: The Pakistan Stock Exchange (PSX) has kicked off fiscal year 2026 at a record high, with the KSE-100 index surpassing the 130,000 points mark for the first time. The index closed the week of July 4, 2025, at 131,949 points, marking a 6.1 percent week-on-week increase. A weekly snapshot of the PSX further highlights the positive trends. PSX Market Capitalization in Rupees grew by 5.6 percent from 15.062 trillion to 15.910 trillion. Ready board Average Daily Turnover (ADTO) jumped significantly by 31.4 percent from 736.31 million to 967.27 million shares, and in value terms it rose by 32 percent from Rs 31.33 billion to Rs 41.35 billion. BRIndex100 increased by 761.71 points last week, closing at 13,435.90 points. This is up from 12,674.19 points the previous week. On average, 748.782 million shares were traded daily for BRIndex100. BRIndex30 also rose by 1153.6 points over the week, ending at 39,417.33 points while it finished at 38,263.73 points a week earlier. The average daily trading volume for BRIndex30 was 421.827 million shares The strong start follows an impressive performance in FY25, where the PSX emerged as the best-performing market in the region, delivering a total return of 60 percent. The market maintained its bullish momentum, primarily driven by increased inflows into banking, provident/pension funds, savings, and fixed deposits. Equity investments saw a 7.15 percent increase, suggesting a reallocation of funds due to the recently approved finance bill. On the external front, the momentum was significantly bolstered by positive market sentiment, driven by Pakistan securing $3.4 billion rollover/refinancing from China, complemented by an additional $1.5 billion loan from Middle Eastern commercial banks and multilateral institutions. Of these inflows, $3.7 billion have already been reflected in the State Bank of Pakistan's (SBP) foreign exchange reserves, pushing them to $12.7 billion. The SBP anticipates the remaining inflows to be reflected next week, which would further boost reserves to $14.51 billion. In another positive news, the trade deficit saw a 9 percent month-on-month decline in June 2025, clocking in at $2.3 billion, though the overall FY25 trade deficit rise by 9 percent. Further contributing to the positive economic outlook are the recently released Consumer Price Index (CPI) figures for June 2025, which came in at 3.2 percent year-on-year. This brings the average CPI for FY25 to a significantly lower 4.5 percent, a stark contrast to the 23.4 percent inflation recorded in FY24. In a move aimed at fiscal management, the government reduced profit rates on National Savings Schemes (NSS) by approximately 15 to 59 basis points across various schemes. Meanwhile, the Federal Board of Revenue (FBR) released tax collection figures for FY25, which stood at Rs 11.7 trillion, slightly missing the revised target by Rs 178 billion. Moreover, the cement sector's sales for FY25 reached 46.2 million tons, up 3 percent year-on-year. In last week, the Pakistani Rupee remained relatively stable against the US Dollar, closing at Rs 283.97. Key sectors by volume show Banks dominating at 16 percent, Technology & Communication at 14 percent, Investment Banks and Food both at 8 percent, and Textile Spinning at 7 percent. A detailed look at sector performance reveals that Banks led the gains with a 13.6 percent increase, followed by Engineering at 8.7 percent, Textile Composite at 7.6 percent, Technology & Communication sector at 6.7 percent, and Autos at 6.1 percent. Other sectors that saw positive movement include OGMCS (5.2 percent), Fertilizer (4.3 percent), Pharmas (4.2percent), E&Ps (2.4 percent), Food (1.8 percent), Power (1.7 percent), and Chemical (1 percent). Conversely, Refinery (-0.4 percent) and Cement (-0.6 percent) experienced slight declines during the week. The top gainers in the KSE-100 index for the week ending July 4, 2025, were Adamjee Insurance Company Limited (AICL), surging by 27.2 percent to Rs 62.60, followed by Faysal Bank Limited (FABL) Equity with a 26.1 percent gain to Rs 79.93 per share while Askari Bank Limited (AKBL) Equity increased by 20.8 percent to Rs 59.30. On the other hand, the top losers in the KSE-100 included Bannu Woollen Mills Limited (BNWM), which declined by 11.9 percent to Rs 70.06, followed by Ghani Holding Global (GHGL) by 7.6 percent to Rs 41.11, and Pak-Gulf Leasing Company Limited (PGLC) by 5.3 percent to Rs 20.13. Analysts noted that the outlook for the market remains positive in the coming weeks, with a projected forward inflation of 4.4 percent year-on-year for FY26, suggesting potential for monetary easing. This easing is expected to act as a significant catalyst for equities. The KSE100 is anticipated to continue its upward trajectory, with earnings growth expected to be primarily driven by improvements in fertilizers, sustained returns on equity in banks, and improved cash flows for E&Ps and OMCs. Copyright Business Recorder, 2025
Business Recorder
3 days ago
- Business Recorder
Thailand gets third leader this week as new cabinet sworn in
BANGKOK: Thailand saw its third person helming the prime minister's office in a week on Thursday, as the king swore in a new cabinet after a court decision plunged the nation's top office into turmoil. The prime minister's office was upheaved on Tuesday when the Constitutional Court suspended Prime Minister Paetongtarn Shinawatra pending an ethics probe which could take months. Power passed to transport minister and deputy prime minister Suriya Jungrungreangkit who took office for only one full day, as the bombshell was dropped in an awkward interim ahead of the reshuffle. Former defence minister Phumtham Wechayachai was sworn in as interior minister by the king on Thursday morning, taking on a deputy prime minister role outranking Suriya's — thus becoming the acting premier. The Thai government said in a statement on social media that the new cabinet approved Phumtham's role as acting prime minister at its first meeting. Before Paetongtarn was ousted she assigned herself the role of culture minister in the new cabinet, meaning she has kept a perch in the upper echelons of power. The revolving door of leadership comes as the kingdom is battling to revive a spluttering economy and secure a US trade deal averting President Donald Trump's looming threat of a 36 percent tariff. Phumtham is considered a loyal lieutenant to the suspended Paetongtarn and her father Thaksin Shinawatra, the powerful patriarch of a dynasty which has dominated Thai 21st-century politics. Thaksin-linked parties have been jousting with the pro-military, pro-conservative establishment since the early 2000s, but analysts say the family's political brand has now entered decline.
Business Recorder
4 days ago
- Business Recorder
Inflation
EDITORIAL: Pakistan Bureau of Statistics (PBS) has tabulated a decline in the consumer price index (taking account of imported inflation) for June relative to May 2025 — 3.2 percent against 3.5 percent in May. CPI takes account of the fluctuation in the price of imported items as well as those domestically produced with the exchange rate parity playing a prominent role in the calculation of imported inflation and taxes on the calculation of domestic inflation, particularly taxes on petrol and products (inclusive of the hefty levy and the recently levied carbon tax), the prime inputs for transport of goods and services throughout the country. The exchange rate parity has remained more or less constant for the past year, with the International Monetary Fund (IMF) continued insistence that 'a more flexible exchange rate remains critical to absorb shocks and support the rebuilding of reserves'. While the differential between the interbank rate and the open market rate does conform to the stipulated IMF condition yet there are concerns within the market and the multilaterals that the government is 'managing' the containment of the rupee — a view strengthened by the fact that the country's foreign exchange reserves remain entirely debt-based given that the rollovers from friendly countries alone are 16 billion dollars while the reserves as on 20 June 2025 were 9064.5 million dollars. The actual weightage of fuels is lumped together with other utilities, both those that rely on imported inputs and those that do not — housing, water, electricity, gas and fuels — to account for 23.63 percent weightage. However, details provided by PBS (Pakistan Bureau of Statistics) show that the weightage given to liquefied hydrocarbons, associated with crude oil and petroleum, had a low weightage of only 0.9994 while that ascribed to solid fuel notably wood, charcoal, peat, dry dung, inexplicably was given a weightage four times higher at 4.4761 in calculation of CPI. Perhaps this was one of the reasons behind the IMF's concern noted in the 10 October 2024 Staff Report for the 2024 Article IV Consultation and Request for an Extended Arrangement Under the Extended Fund Facility: 'Data provided to the Fund is broadly adequate for surveillance in most areas, but there are weaknesses in the National Accounts (NA) and Government Finance Statistics (GFS) that somewhat hamper surveillance…important shortcomings remain in the source data available for sectors accounting for around a third of GDP, while there are issues with the granularity and reliability of the GFS. The authorities are prioritising addressing these weaknesses, supported by Fund TA on the GFS and a new PPI (Producer Prices Index).' Core inflation, non-food and non-energy, that the Monetary Policy Committee (MPC) reportedly considers when adjusting the policy rate declined to 6.8 percent in June against 7.3 percent in May and 8.2 percent in April. It is relevant to note that during the PTI administration the MPC agreed with the Fund to link it to CPI instead of core though it is unclear whether the current administration has reverted to linking it to core inflation — unclear because the rationale for policy rate adjustment is baffling given that it was 12 percent from January to 5 May when the CPI declined from 2.4 percent to 0.3 percent (April) and core inflation from 7.8 percent to 7.4 percent. It was reduced by 100 basis points on 5 May to 11 percent and CPI rose to 3.5 percent in May 2025 while core inflation declined by a mere 0.1 percentage point — to 7.3 percent in May. In this context, the Fund in the first review documents uploaded on its website advised the SBP to base rate changes on macroeconomic data to enhance its acceptability. Inflation is expected to rise in the current year due to administrative measures agreed with the Fund, to raise utility prices to meet the objective of full-cost recovery, and adhere to severely contractionary monetary and fiscal policies; however, the Cabinet is ignoring the rising poverty levels in the country, which have reached the levels that are in evidence in Sub-Sahara Africa. The World Bank has noted 44.2 percent poverty level that requires the formulation followed by convincing the IMF of the need for anti-poverty policies and subsequently their implementation in letter and spirit. Copyright Business Recorder, 2025
