The government decision followed a months-long stand-off with importers and manufacturers, whose associations have been demanding an across-the-board 39% rise, warning that the industry could otherwise collapse.

Pakistan’s annual inflation rate hit 35% in March, fuelled by a depreciating currency, a rollback in subsidies and the imposition of higher tariffs to secure a bailout package of $1.1 billion from the International Monetary Fund. Food inflation has soared to 47%.

But the government had pushed back against the demands for higher medicine prices, fearing such a move would lose it support months before national general elections.

The finance ministry said medicine prices could be reviewed again after three months if the Pakistani rupee appreciated, adding that “no increase under this category” would be granted in the next financial year.

The Pakistan Pharmaceutical Manufacturing Association (PPMA) criticised the increase, which it said was way lower than it had expected.