Medicine price deregulation, two years on: availability up, prices debated, policy under review
Prices of non-essential medicines were freed in February 2024. Officials now report over 99% availability, while the pricing framework faces a fresh review.
In this article
Few decisions have shaped Pakistan’s pharmaceutical industry as much as the February 2024 deregulation of prices for non-essential medicines. Two and a half years later, the arguments for and against are clearer — and the policy is being reviewed again.
Availability
Officials at the health ministry and DRAP said in March 2026 that over 99% of registered medicines were available, crediting deregulation. A DRAP official explained that when controlled prices fell below production cost, companies stopped making medicines: “When manufacturers stop producing medicines because they are selling below cost, shortages become inevitable.” DRAP added that shortages had encouraged hoarding and counterfeits. Deregulation covers only non-essential medicines; hundreds of essential and life-saving drugs remain under price control.
Prices
The size of the increase has been disputed. In November 2025, the Pakistan Pharmaceutical Manufacturers Association (PPMA) said prices had risen by an average of 15% since the policy, not the 32% cited by authorities, and that more than 50 life-saving and critical drugs had returned to pharmacies.
A fresh review
In September 2026, ProPakistani reported that Senator Ahad Cheema directed the health ministry and DRAP to revise the drug pricing framework, including the Hardship Policy and the DRAP Policy Board. Industry officials urged stability, noting that:
| Point raised by industry | Figure |
|---|---|
| Share of medicines under price control | About 40% (roughly 500 molecules) |
| Maximum essential-medicine increase, FY26 | 4.9%, against 7% CPI inflation |
| Sector profit margin | About 3% before deregulation, about 10% after |
How the system works
Pakistan regulates medicine prices through DRAP under the Drug Pricing Policy. Two broad groups matter:
- Essential medicines — those on the National Essential Medicines List — remain under price control. Their prices can rise only by a capped annual adjustment linked to inflation.
- Non-essential medicines were deregulated in February 2024, so manufacturers can now set their prices, subject to market competition.
The Hardship Policy is the route by which a company can ask for a price increase on a controlled medicine when its cost of production has risen above the permitted price. Industry has long argued that this route was too slow, and that products quietly disappeared from the market while applications waited. Supporters of deregulation say this is exactly why availability improved once companies could price non-essential products to cover their costs.
The two sides of the debate
Both sides agree on the goal — medicines that are available, genuine and affordable — but weigh the risks differently.
- The case for deregulation: when prices are held below cost, legitimate manufacturers stop production, shortages follow and the gap is filled by smuggled, hoarded or counterfeit products. Sustainable prices keep supply steady and let companies invest in quality, new products and exports.
- The case for caution: most medicine in Pakistan is paid for out of pocket, so price rises fall directly on households. Without monitoring, prices of popular brands can rise faster than incomes, and patients may switch to cheaper products of uncertain quality.
The figures quoted by industry — a profit margin that rose from about 3% to about 10%, and capped increases on essential medicines below the rate of inflation — are central to its argument that deregulation has rebalanced the sector rather than enriched it.
What it means for manufacturers and suppliers
For manufacturers, a stable pricing framework is the basis for long-term investment: a new production line or a PIC/S upgrade is only worth funding if the products it makes can be sold at a sustainable price. For machinery, packaging and raw material suppliers, the same stability decides whether customers place orders now or wait. That is why the outcome of the current review matters well beyond the pharmacy counter.
What to watch
Officials acknowledge affordability concerns for low-income households and say they are looking at price monitoring and social protection. For suppliers, the key question is whether manufacturers keep the margins they are now investing in new products, quality and exports — see FY26 profits.
