The local headlines are screaming about "unprecedented" price hikes for essential medicines. Doctors are appearing on talk shows, somberly warning that the poor will be priced out of survival. The populist narrative is set: greedy pharmaceutical companies are squeezing the life out of the Pakistani public, and the government is failing by letting prices rise.
It is a comforting story. It is also dangerously wrong.
If you want to understand why Pakistan faces chronic shortages of life-saving drugs—why you can’t find basic heparin, certain insulin brands, or even simple paracetamol during a crisis—you have to stop blaming "greed." You have to start blaming the price caps that the public so desperately clings to. We are witnessing the slow-motion suicide of a national healthcare supply chain, driven by the delusion that the government can command the laws of economics to stop at the border.
The Myth of the "Affordable" Price Cap
For decades, the Drug Regulatory Authority of Pakistan (DRAP) has operated under a mandate to keep medicine "affordable" by fixing prices. On paper, this looks like a win for the citizen. In reality, it is a death sentence for the market.
Pakistan imports roughly 90% of its pharmaceutical raw materials—the Active Pharmaceutical Ingredients (API). These are bought in US dollars. When the Pakistani Rupee (PKR) devalues by 30%, 50%, or 100% against the dollar, the cost of manufacturing a tablet doesn't stay static. It skyrockets.
When the government refuses to allow price adjustments that reflect this currency collapse, they aren't "protecting" the consumer. They are making it mathematically impossible for a legitimate manufacturer to produce the drug without losing money on every blister pack.
I have sat in boardrooms where executives had to make the soul-crushing choice: do we keep producing this essential cardiac med at a loss until the company goes bankrupt, or do we just stop making it?
Shortages are the Highest Price of All
The "lazy consensus" says that if a drug price goes from 100 PKR to 150 PKR, it is a tragedy. The brutal reality is that a drug priced at 150 PKR is infinitely cheaper than a drug that doesn't exist.
When legitimate manufacturers are forced out of the market by price freezes, a vacuum is created. Nature—and the black market—abhors a vacuum. Here is what actually happens when you "protect" the poor with price caps:
- The Grey Market Takeover: Life-saving drugs vanish from reputable pharmacy shelves and reappear in the back alleys of Namak Mandi or through "importers" on WhatsApp. The price isn't the regulated 100 PKR anymore; it’s 500 PKR, 1,000 PKR, or whatever the smuggler feels like charging.
- The Rise of Counterfeits: When the margin for legal production vanishes, the incentive for counterfeiters explodes. They don’t care about API costs or DRAP regulations. They fill capsules with chalk and sell them to desperate families who think they are buying a bargain.
- Therapeutic Failure: Doctors are forced to prescribe "Alternative B"—a less effective, older generation drug—because "Alternative A" is no longer imported or produced. The patient stays sick longer, spends more on hospital stays, and loses more wages.
The "expensive" medicine was actually the bargain. The "cheap" medicine that isn't on the shelf is the true luxury.
Why Local Manufacturing is a Pipe Dream Under Current Policy
Critics argue that Pakistan should simply "produce everything locally" to avoid dollar fluctuations. This is a fundamental misunderstanding of how global chemistry works.
Building an API plant requires massive capital expenditure, specialized technology, and—most importantly—predictability. No sane investor is going to pour $50 million into a chemical synthesis plant in a country where the government can arbitrarily decide your profit margin is now negative because a political talk show host complained about the price of Panadol.
We have created an environment that punishes efficiency and rewards exit. Global giants like Sanofi and Eli Lilly haven't been scaling back their Pakistani operations because they hate the market; they are leaving because the regulatory environment is a hostile work Gallantry. When Big Pharma leaves, they take with them the quality standards, the clinical research, and the latest generation of molecules.
Pakistanis are being relegated to 1980s-era medicine while the rest of the world moves toward gene therapy and advanced biologics. All in the name of "affordability."
Dismantling the "Greedy Pharma" Narrative
Let's address the elephant in the room: the idea that these companies are making "too much" money.
In any other industry, a 10% to 15% margin is considered healthy and necessary for reinvestment. In the Pakistani pharma sector, many essential lines are running on margins thinner than a razor blade. When you factor in the cost of electricity (which has tripled), fuel for distribution, and the predatory "super taxes" imposed by various governments, the "fat cat" CEO is actually a guy trying to figure out how to keep the lights on without getting arrested by a populist regulator.
Compare this to the unregulated sectors. The price of a liter of milk or a kilo of flour fluctuates with the market. People grumble, but the shelves stay full. Yet, we treat medicine—the most critical commodity—as a political football.
The Unconventional Solution: Deregulation is the Only Pro-Poor Move
The most radical, "pro-poor" thing the Pakistani government could do tomorrow is to abolish price caps on all but a tiny handful of the most critical, monopoly-held molecules.
Imagine a scenario where the market determines the price. Yes, the price of a brand-name antibiotic might jump. But then, three other local manufacturers, seeing a chance for a 5% profit, enter the market. Competition drives the price back down. Innovation returns. The black market collapses because you can actually find the drug at your local pharmacy.
We need to shift from Price Control to Access Control.
The government’s job shouldn't be telling a company they must sell a pill for 5 rupees when it costs 6 to make. The government’s job should be:
- Voucher Systems: Provide direct subsidies to the poorest citizens to buy the medicine they need.
- Quality Enforcement: Spend DRAP’s limited resources on testing labs to ensure that what says "Aspirin" on the box actually contains Aspirin, rather than spending all day auditing price lists.
- Streamlining Registration: It shouldn't take years to get a new, life-saving drug approved for the Pakistani market.
The Cost of Cowardice
Every time the health ministry "freezes" prices to win a news cycle, they are effectively signing the death warrants of patients in rural clinics who will find empty cabinets three months from now.
We are currently subsidizing the middle and upper classes at the expense of the poor’s lives. The wealthy can afford the black-market prices or can fly to Dubai to pick up their prescriptions. The poor are left with the "regulated" price of zero—because the drug is out of stock.
Stop asking why medicine is getting more expensive. Start asking why we are making it impossible for honest companies to provide it. The "health risks" the doctors are warning about aren't caused by the price increases; they are caused by the shortages that our own policies have engineered.
The current system is a corpse being kept on a ventilator by political rhetoric. It’s time to pull the plug and let a functional, transparent market take over before there is nothing left to save.
Stop romanticizing the price cap. It isn't a shield. It's a noose.
