The government’s recent announcement of amendments to the Finance Bill 2022 has caused concern among Pakistanis, particularly those who rely on life-saving medication. The proposed 17% GST on the import of raw materials for essential drugs has led to a shortage of such drugs in the country, despite the government’s promise to reduce GST to 1%.
A recent market survey found that at least 40 medicines are hardly available, including Alp tablet for depression, Dexamethasone for asthma, cancer and joint pain, Epitab for epilepsy, and Nervin for depression. Epival, Fexet D, Nitronal, Ventoline tablets and injections are also in short supply, as are Epival In, Myrin P, Ketasol Inj, Loprin, Silliver tab, Phenergen Elixir, Tixylix Lincitilus, Chlooriptics Drops, Systane drops, Rivotril drops, Dormicum tablets, Winstor, Tritace, Sodamint, Schazobutil, Jardymet and Brufen. Additionally, Lomotil, Panadol, Tan Primolut B, Progynova, Stilnix, Glucobay, Zentel, Avor, Gravibinan, Syp Gaviscom, Lipofundin and Inj Sorbid are also missing from the market.
Despite the reduction of GST to 1%, the pharmaceutical industry is lobbying the government to raise the pricing of their products by 20 to 25%. Unfortunately, this will have a negative impact on patients who will bear the brunt of this price hike. The government needs to address this issue and take immediate measures to ensure that life-saving drugs remain affordable for everyone.
Understanding the impact of GST on life-saving drugs is crucial. GST is a consumption tax that is levied on the supply of goods and services. The 17% GST on the import of raw materials for essential drugs has led to an increase in the cost of production for pharmaceutical companies. This has resulted in a shortage of essential drugs and an increase in their prices, making it difficult for many patients to afford them.
The pharmaceutical industry in Pakistan is heavily dependent on imported raw materials, which account for more than 70% of the industry’s needs. The proposed 17% GST on the import of raw materials will increase the cost of production, and this additional cost will be passed on to the end consumer. The reduction of GST to 1% is a step in the right direction, but it is not enough to address the current shortage of life-saving drugs.
The government needs to take immediate measures to ensure that life-saving drugs are affordable for everyone. One solution could be to waive GST on the import of raw materials for essential drugs. This would reduce the cost of production for pharmaceutical companies, and this reduction would be passed on to the end consumer in the form of lower prices.
The government could also consider providing subsidies to the pharmaceutical industry to encourage local production of essential drugs. This would reduce the industry’s dependence on imported raw materials and improve the availability of life-saving drugs in the country.
In conclusion, the proposed 17% GST on the import of raw materials for essential drugs has had a negative impact on the availability and affordability of life-saving drugs in Pakistan. The government needs to take immediate measures to address this issue and ensure that life-saving drugs remain affordable for everyone. By waiving GST on the import of raw materials for essential drugs and providing subsidies to the pharmaceutical industry, the government can ensure that life-saving drugs are available to all those who need them.