Pakistan’s economic crisis puts healthcare costs out of reach

Nafees Jan, a 50-year-old taxi driver in Pakistan’s capital, Islamabad, recently made what he called “the most difficult choice” of his life: whether to pay for treatment for his 10-year-old son for diabetes or to continue sending his four children to school.

Facing an “almost life and death situation”, Jan decided to pull his children out of their modest fee-paying school in order to afford medicine and lab tests. “I had to opt for saving my son’s life,” he said.

Jan’s agonising dilemma was one tragic consequence of a mounting economic crisis in Pakistan, where galloping inflation — which hit 35 per cent in March — has put the cost of essentials beyond the reach of many.

Pakistan’s downward economic spiral is sparking a public health crisis. Rising inflation has driven the price of treatment to unaffordable levels, forcing many families to choose between healthcare and other necessities, while shrinking foreign currency reserves have caused shortages of imported drugs and medical equipment.

Meanwhile, devastating floods last year have pushed millions of Pakistanis into hunger and exposed them to greater risk of disease.

Pakistan’s economic misery was “threatening the health and wellbeing of millions of already vulnerable communities”, Unicef said. “No one should be forced into poverty, or be kept in poverty, to pay for the healthcare they need. However, this is the grim reality for many families in Pakistan.”

Analysts warn that the country is at risk of following nearby Sri Lanka into default. Its foreign reserves have fallen to $4.2bn, not enough to cover one month’s worth of imports, leaving businesses struggling to operate.

The government of Prime Minister Shehbaz Sharif has been locked in negotiations with the IMF to revive a multibillion-dollar lending programme. But the sides have been unable to agree on the conditions to unlock the latest $1.1bn tranche, which include raising taxes and cutting energy subsidies. While the Fund argues such austerity measures are necessary, Islamabad says they will exacerbate the economic pain.

Pakistan’s central bank last week raised its benchmark interest rate by 100 basis points to 21 per cent, the highest level in Asia.

Sharif is also embroiled in a bitter dispute with arch-rival Imran Khan, who has capitalised on Pakistanis’ economic anguish in a campaign to return to the top office, from which he was ousted a year ago. The prime minister’s allies fear that acquiescing to the IMF’s terms will squander their chances in elections due this year.

Pakistan has long struggled with poor healthcare. Forty per cent of children are stunted, or short for their age because of malnutrition, according to Unicef, a condition that can inflict life-long physical and cognitive damage. More than half of medical spending is out of pocket, as severely underfunded public hospitals often leave patients with little choice but to pay for treatment.

But the strain has intensified over the past year. Amid surging inflation and a sharp drop in the value of the rupee, authorities imposed import restrictions to protect remaining foreign reserves, a move that exacerbated shortages of medical equipment and raw materials for drugs.

“There is a huge gap in medicine supply,” said Shabnam Baloch, Pakistan director at the International Rescue Committee. In recent months, “either the manufacturer was not able to import the raw material or they were just leaving the country due to the shortage of foreign currency”.

The head of one major pharmaceutical company in Pakistan, who asked to remain anonymous, bemoaned government controls on drug prices, which have not kept up with inflation or the rupee’s devaluation. “How do you do business and still remain profitable in this environment?” they said.

Late last year, GlaxoSmithKline’s Pakistan unit stopped producing painkiller Panadol, saying that higher material prices were incurring “heavy financial losses”.

Qazi Saleem, an Islamabad-based specialist in the procurement of healthcare supplies, said import costs had risen between 70 and 120 per cent in the past year. “It has become harder to get stents and lenses,” Saleem added. “This has made it harder for patients . . . as they can’t predict the expected cost.”

Atif Munir, an endocrinologist in Lahore who treats diabetes patients, said insulin, which in Pakistan is overwhelmingly imported, had become more expensive and harder to obtain, forcing him to find more affordable supplies.

Pakistan’s precarious position was worsened by flooding last year, which caused an estimated $30bn in damage and economic losses, displaced millions and wiped out swaths of vital crops such as rice.

The IRC said that 20mn people continued to need humanitarian assistance, and nearly half of them were experiencing extreme food insecurity. Contaminated and stagnant water had led to outbreaks of waterborne diseases including cholera, as well as malaria, the group added.

“The most vulnerable communities and particularly those impacted by the floods have either lost all their assets or sell whatever little they have to meet part of healthcare needs,” Unicef said.

This includes Naimat Khan, 60, a father of seven who had brought his elderly mother from their village to the hospital in Rawalpindi for kidney treatment. Last month, he had to sell two of his seven goats to afford her care, fetching a much lower price than he intended.

“The cost of the visits to the doctor became more expensive each month,” Khan said. “Finally, I had no choice.”