PAKISTAN — GSK Plc’s Pakistan unit has reduced manufacturing of the widely used painkiller Panadol citing negative margins caused by a rapid increase in paracetamol raw material prices and failed government negotiations.
“Manufacturing of the Panadol range on negative margins is unsustainable and despite exhaustive efforts of the company to mitigate this matter through dialogue, the situation is now beyond our control,” said Farhan Muhammad Haroon, chief executive of GSK Pakistan, in a letter to the prime minister’s office.
GSK has stated that due to increased prices for paracetamol raw ingredients, it has ceased production of all variants of its Panadol range, which includes various brands of tablets and syrups.
These products are based on paracetamol, a generic pain reliever, and fever reducer. Panadol products are in short supply in the local market, owing to increased demand caused by an increase in dengue and malaria cases.
GSK produced about 5.4 million Panadol tablets in the last 12 months and ensured continuous supplies during the COVID-19 pandemic, dengue fever crisis, and floods across Pakistan despite incurring heavy financial losses, it said
“We are one of the few multinational companies left operating in the country,” the company said in the statement.
However, the company said it is open to resuming supplies after the federal government approves price increases to cover the impact of raw materials.
Officials at the Drug Regulatory Authority of Pakistan (DRAP), who reportedly declined to comment on the matter, stated that they had received no such notification from the pharmaceutical company.
Furthermore, the company noted that, while it received a routine Consumer Price Inflation (CPI) adjustment for the year 2022 from DRAP on August 25, 2022, it was not commensurate with the crippling increase in Paracetamol’s raw materials prices.
According to the Pakistani Pharmaceutical Manufacturers Association (PPMA), increased raw material prices, rupee depreciation, increased utility costs, and transportation charges have resulted in a 38 percent increase in medicine prices.
According to the PPMA, a 40% immediate price increase is being demanded across the board.
In recent years, multiple foreign companies have left Pakistan due to government oversight and governance issues.
GSK was also in the news last month when authorities raided one of its warehouses on suspicion of hoarding during the climate-related crisis. The allegations were denied by the company.
Pharmacies in Karachi’s commercial district are out of stock or only have a limited supply of Panadol.
The Company has been an integral part of the pharmaceutical/industrial sector, making significant contributions to Pakistan’s economic growth and stability.
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