Sri Lanka: Medicinal drugs crisis and Health – Field Note 2

The import cost on the manufacturing of pharmaceuticals locally accounts for 70% of the total value on imports (An expenditure of US $ 45-50 million) The added value is 30%.

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A representational image of drug [Special Arrangement]

This series is based on the excerpts of the first report of the Sub-Committee in identifying short and medium-term programmes related Economic Stabilization of the National Council tabled in the Parliament by Patali Champika Ranawaka as the Chair of the Sub-Committee.  Composition of the Sub-Committee in identifying short and medium-term programmes related Economic Stabilization of the National Council,  Patali Champika Ranawaka (Chair), Naseer Ahamed, Tiran Alles, Sisira Jayakody, Sivanesathurai Santhirakanthan, Wajira Abeywardana, A. L. M. Athaullah, Rishad Bathiudeen, Palani Thigambaram, Mano Ganesan, M. Rameshwaran;  all are members of the house representing various political parties – editors


  • There have been reports of the physical resources challenge of maintaining a proper health service owing to the dearth of medicine, equipment and accessories.
  • A human resource crisis is emerging with the professionals at different levels of the medical fraternity leaving the service or migrating.
  • It is also reported that the opportunity for the public to receive a continuous health service is getting limited owing to the deficiencies found in the supply of food, fuel and electricity.
  • It is the opinion of many experts that we are faced with the long-term risk of losing the relatively high health indices that we have achieved as a middle-income country.
  • This shows that a health crisis that is intertwined with the shortage of foreign exchange, financial crisis and the energy crisis is looming large.
  • It was the opinion of the Expert Committee that the current cost on medicine can be significantly reduced through the adoption of a practical scientific methodology. A programme that ensures medicinal drugs security should be implemented with the participation of the public and private sectors and the pharmaceutical manufacturers.

Solutions and Proposals

  • The preparation of a “Common Programme” with the concurrence of both the public and private sectors is proposed upon declaring an emergency situation similar to the one during the Covid-19 period, in the face of the current economic breakdown.
  • Further, considering the following facts;
  • It is reported that a sum of approximately Rs. 160 billion is spent on importing pharmaceuticals annually and 85% of that is spent on imports (US $ 380 million). Out of that nearly 45% is public expenditure and 55% is private expenditure (WHO Report – 2016). There are 15 local manufacturers of pharmaceuticals (including the State Pharmaceutical Manufacturing Corporation (SPMC)) and they manufacture 15 % of the total value of medicines thus providing 35 % of the medicine requirement of the country. The local medicine sale through private pharmacies is 4% (96% is imported). In government hospitals, it is 24% (76% is imported).
  • The import cost on the manufacturing of pharmaceuticals locally accounts for 70% of the total value on imports (An expenditure of US $ 45-50 million) The added value is 30%.
  • The private manufacturers are faced with the problems of the government not making payments to suppliers (Rs.28 billion), issues relating to issuing letters of credit and taxes on raw materials for medicines.

Therefore, it is proposed to increase the manufacture of those medicines to the level of at least 30% within the next three years, after identifying the problems faced by the local pharmaceutical manufacturers upon the constitution of a High Level Steering Committee in which the Ministry of Health, Ministry of Finance and the local pharmaceutical manufacturers are included.

  • It is reported that the National Medicine Regulatory Authority (NMRA) regulates 14000 different medicines. An Independent Expert Committee should analyze these approved medicines and make arrangements to reduce their quantity. The importation of different varieties of medicines belonging to the same brand should be limited on the recommendations of an Expert Committee. The recommendations of the World Health Organization can be used in this regard (WHO Anatomical Therapeutic Chemical (ATC) classification system). It is emphasized that the current standard tests should not be limited to approval steps but also the samples should be tested at distribution of goods (the standard is tested only in relation a very few medicines issued at present)
  • It is proposed to appoint an Independent Board of Experts as a matter of urgency and make the National Medicine Regulatory Authority more independent. It is also proposed to correctly identify the vital, essential and non- essential drugs and prepare a priority list with the focus on their results, quality and price.
  • It is proposed to prepare a new methodology by making a formal investigation on the supplementary food and supplementary drugs based on their quality, market factors and health implications in order to limit them.
  • It is proposed to issue guidelines on emergency procurements by bringing the government procurement to 2-4 weeks. The aforesaid guidelines should be rescheduled to fall in line with the standards of various international institutions such as the Indian Line of Credit by which the provisions have been received, World Bank and the Asian Development Bank.
  • It is proposed that a large amount of foreign exchange is spent on the importation on non- medicinal equipment and accessories (US $135 million per year). A management that is based on a proper audit of equipment is proposed for controlling such expenses.
  • Even though it is reported that proper data is available about stocks of pharmaceuticals, it was reported that a huge amount (Rs.15 billion) is spent on local purchases done by hospitals at certain times. It is essential to take steps to prevent such purchases as much as possible. The action taken by the directors of hospital should be recognized.
  • Considering the wide gap between the prices of generic drugs and brand name drugs, a management audit should be conducted regarding the amount of brand name drugs and with the approval obtained for that from the said Panel of Experts, a methodology should be developed for every doctor and pharmacist to abide by that. The cost effective treatment guidelines should be developed for the common diseases and pharmaceuticals should be imported accordingly.
  • Considering that stocks of various drugs and equipment are donated by certain organizations, it is proposed that guidelines focused on their standards should be developed by the Ministry of Health. The donation of substandard drugs should be discouraged.
  • It is proposed that a new mechanism is required for proper coordination between the State Pharmaceuticals Corporation and Medical Supplies Division (MSD) of the Ministry of Health.
  • It is proposed that the establishment of joint ventures of State Pharmaceutical Manufacturing Corporation (SPMC) and local private manufactures is the most suitable strategy. The money could be saved by facilitating private pharmaceutical manufacturers to function as direct suppliers instead of supplying through SPMC.
  • It is proposed to establish a trade zone for pharmaceutical manufacturing in a semi urban environment. (It was reported that the proposed Anuradhapura Zone was not suitable for that.)
  • It is proposed to increase the number of tests through a joint mechanism involving the laboratories of the Ministry of Health, laboratories of universities and private laboratories. An additional practical education will be incorporated into educational institutions through that.
  • It was observed that a certain amount of foreign exchange is spent annually for indigenous medicine as well. A methodology of joint public and private herb gardens and medicine manufacturing facilities is proposed for the manufacturing of indigenous medicine. The direct contacts should be maintained by Ayurveda Drugs Corporation with Ayurveda hospitals to alleviate the existing drug shortage.
  • It is proposed that laboratory facilities should be improved and that public private joint research should be conducted to ensure the quality and efficiency of indigenous drugs. The Ayurveda Formulary Committee and the Department of Ayurveda too should be strengthened for that.
  • It was observed that food and life styles to prevent non-communicable diseases should be promoted as drugs for such diseases in the top of the list of the most used drugs. A joint programme of western and indigenous medical systems is proposed for that.

Source: Sri Lanka Parliament

SLG Syndication

SLG Syndication is committed to aggregating excerpts from news published by international news agencies and key insights on contemporary issues published by think tanks. Our aim is to facilitate the expansion of its reach while giving due credit to the original source.

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