We should all prepare for a medicine shortage due to restrictions and refusal to issue Letters of Credit (LCs) by the State Bank of Pakistan (SBP). According to a report by Geo News, all local banks have been directed not to open LCs that are required for import of raw materials and medical devices to save the country’s depleting foreign exchange reserves.
Pharmaceutical manufacturer’s have warned that refusal to issue Letter of Credits (LCs) may trigger a serious medicine shortage in the country. “The State Bank Pakistan (SBP) has verbally conveyed to all local banks not to open LCs for the import of Active Pharmaceutical Ingredients (API) due to shortage of dollars in the country.” Arshad Mahmood, Chairman of Pakistan Pharmaceutical Manufacturers (PPMA) North Region, told media.
“We have the money to buy medicines’ raw material from abroad but dollars liquidity crunch in the country may result in shortage of medicines in Pakistan in the weeks and months ahead,” he added. “Most of the pharmaceutical companies have only two months’ raw material available with them and they are unable to place orders for the raw material for the future.” he said as he warned concerned departments that if LCs are not opened soon, it may result in a medicine shortage across most parts of the country.
He said that coming medicine shortage will similar if not worse than the shortage of Panadol that was experienced across the country. “The shortage of Panadol was due to the price issue but now we are facing double jeopardy as on the one hand prices are not being increased while on the other hand, raw material is not being imported due to dollars’ unavailability with the central bank,” he added.
Mahmood informed the lawmakers that Pakistan’s pharmaceutical industry was dependent on imports and gets most of its raw materials from abroad and due to rupee’s devaluation, the cost of raw materials was constantly increasing along with cost of production due to inflation in the country.
He added that unlike other industries, the prices of medicines are controlled by the government and it makes manufacturing expensive medicines extremely difficult as the companies cannot set their own prices. He said that many essential medicines were not being manufactured as cost of production has become unbearable by the pharmaceutical companies.
So people should gear up for a medicine shortage if the Government and State Bank of Pakistan (SBP) fails to work around the issues of LCs.