GSKCH declares a case of force majeure to produce the Panadol range – Business & Finance

In a major development affecting the country’s pharmaceutical sector, GlaxoSmithKline Consumer Healthcare (GSKCH) has declared a case of force majeure regarding the production of Panadol tablets, Panadol Extra tablets and the Panadol line of liquids for children, the company said in a file on the Pakistan Stock Exchange (PSX). Friday.

Force majeure is a clause that is included in contracts to release liability for unforeseeable and unavoidable disasters that interrupt the expected course of events and prevent participants from fulfilling their obligations.

The development comes after the company sent “several letters to various government stakeholders regarding the critical issue of the extraordinary and rapid increase in paracetamol (raw material) prices in Pakistan.”

GKSCH “calls on the federal government to grant approvals for adjustments to the selling price(s) of the captioned Panadol product line, all of which are paracetamol-based,” the notice reads.

GSKCH, a member of Haleon Group, said it had obtained the approval of the 50th Drug Pricing Committee (DPC) of the Drugs Regulatory Authority of Pakistan (DRAP), held on January 12, 2022, which was recommended by the DPC for cabinet approval.

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“But, according to the media, the same was rejected after a prolonged delay by the latter without any indication of reason(s) given to the company.

“Furthermore, while the company received a routine consumer price inflation (CPI) adjustment for the year 2022 from the DRAP on August 25, 2022, this is not commensurate with the debilitating increase in paracetamol raw material price,” he said. .

GSKCH said it produced nearly 5,400 million tablets of Panadol 500mg and Panadol Extra over the past twelve months, to serve its customers, consumers and patients in need.

The company said it had played a “responsible role during the COVID-19 pandemic, dengue fever crisis and floods across Pakistan, ensuring continued supply of the Panadol range; this despite heavy financial losses. suffered on the production of the said Panadol range due to an increase in the price of the raw materials of Paracetamol and in the absence of formal approval by the federal government of the recommendation of the DPC/DRAP.

“However, due to the challenges mentioned above, manufacturing the Panadol range on negative margins is not sustainable, and despite the company’s exhaustive efforts to mitigate this issue through dialogue, the situation is now out of of our control.

“We are therefore obliged to declare a case of force majeure regarding the production of Panadol tablets, Panadol Extra tablets and the Panadol liquid range for children,” he said.

GSKCH has urged the government to take urgent action to rationalize the prices of the impacted Panadol range based on the increase in the price of the impacted raw material and as recommended by the Drug Pricing Committee of the DRAP.

Last month, GSKCH dismissed claims related to intentional hoarding of Panadol to create a shortage.

In June, the Pakistan Pharmaceutical Manufacturers Association (PPMA) said that around 40 to 50 drugs were in short supply and the number would soon top 100.

At the time, more than 40 life-saving drugs were unavailable after the pharmaceutical industry decided not to import raw materials due to the imposition of GST.

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