Pakistan is a lower-middle-income country where health markets are primarily dominated by public sector. Federal Ministry of National Health Services Regulation and Coordination is in charge of healthcare at the center along with health departments of provinces looking after the major health care services provision across Pakistan. Increased prescription expenses and overall out-of-pocket expenditure burden indicate the poor performance in health care. These concerns are compounded by decreased health-care investment and a lack of effective health-insurance programmes. Among the major woes are frequent increases in drug prices. The purpose of this study is to analyse the welfare impact on families in Pakistan which is a result of medicine inflation resulting in welfare loss. The influence of medicine pricing on consumer well-being in Pakistan is examined in this study. This study is based on HIES data from 1992/93 through 2018/19. In this work, we estimate parameters and price elasticities using the AIDS model. Drug prices have risen faster than the overall CPI throughout the time period of our study. As a result, consumers have faced large economic losses in every year from 1993 to 2019, with a continuous welfare loss for all consumers. Qualitative analysis, conducted by interviews using semi-structure and open ended questions, showed beyond doubt disequilibrium in government interventions through higher prices, poor quality and unavailability of drug.my research recommend establishment of an independent drug pricing sector that will guarantee lowest possible prices on drugs while ensuring the drug quality it must be free of any political influence – just implementing the WHO regulatory principles. Supervisor:- Dr. Mahmood Khalid Co-Supervisor:- Dr. Ahsan-ul-Haq Satti