Sri Lanka's price controlled drugs raised 14.4-pct as central bank busts rupee
May 18, 2019 21:56 PM GMT+0530 | 0 Comment(s)
PRICE CONTROLS: Sri Lanka's central bank printed 246 billion paper (fiat) rupees in 2018 to debase the currency and the the state is decreeing price controls in 2019, repeating the policy errors of Emperor Diocletian about 1700 years ago. Diocletian debased silver-pegged denarii with base metals pushing prices up.
ECONOMYNEXT - Sri Lanka's controlled drug prices were have been raised 14.4 percent in 2019 as the central bank busted the currency from 153 to 182 to the US dollar during 2018 with reckless monetary policy generating two liquidity shocks.
The National Medicinal Drugs Authority, paid for by taxes taken from the people, has decreed that prices of 48 controlled drugs would be allowed to be raised 14.4 percent.
The NMRA was based on a proposal by Senaka Bibile, a Marxist, who seemed to have had little knowledge of monetary policy or economics.
Economic analysts warned at the time NMRA was set up at tax payer expense that Sri Lanka needed central bank reform or the abolition of the central bank in favour of a currency board to end monetary instability and currency depreciation not a price control agency.
"It is the Central Bank that destroys the currency and pushes up the cost of drugs," EN's Economic columnist explained in November 2015 when money was printed under central bank Governor Arjuna Mahendran to weaken the currency. (Sri Lanka's pharma control Neros fiddling while Colombo burns with falling rupee.)
"When the currency is destroyed by the state, prices of all imported and domestically produced goods go up.
"Already this administration has destroyed the rupee from a little over 130 to over 140 rupees now. So import costs of drugs are up 7 or 8 percent already this year, thanks to the state, rulers, bureaucrats, the Central Bank and the state generally.
"If prices have not gone up already, it is due to private sector efficiencies and a reduction in margins they have taken."
Since the beginning of 2015 the rupee has been inflated from 131 to 176 with credit driven by printed money.
In 2018 the rupee fell from 153 to 182 to the US dollar with the central bank printing 246 billion rupees to generate unsustainable credit.
In 2019 as credit collapsed the central bank has allowed the rupee to appreciate to 176 to the US dollar, which is a 34 percent currency inflation from 2015.
In 2017 when monetary policy was contractionary, (inflows were mopped up) the rupee was wantonly depreciated to satisfy a Real Effective Exchange Rate target.
The NMRA which cut prices in 2016 despite the currency fall in that year, has allowed two increase of 5 percent and 14.4 percent, which totals around 20.1 percent.
Under the new price controls AMOXICILLIN+CLAVULANIC ACID (Augmentin style antibiotics) will go up from 63 rupees to 72.07 rupees a 625 mg tablet.
If the NMRA did not allow the price hikes as the central bank busted the rupee, there could be shortages.
The gazette notice said any "manufacturer, importer, trader, distributor, pharmacist, medical practitioner, dentist, veterinary surgeon,medical institution including a private medical institution, pharmacy or person" who breaks the price control regulation will be prosecuted under the NMRA law of 2015.
However there are no laws the prosecute the central bank for printing 247 billion rupees in 2018, picking the pockets of the people with higher prices and generating two busts in a row.
There had been calls to criminalize the more reckless operations of the central bank which generate excess liquidity, including so-called Soros swaps and the purchase of dollars especially from the Treasury when the currency is already under pressure.
One of the earliest known price controls were listed by Emperor Diocletian who debased the currency by minting new coins with base metals like the central bank is printing paper money either to generate excess liquidity or to offset interventions in the forex market.
The price hike comes as the IMF said in a report that 'inflation expectations were well anchored'.
Many businesses are not yet raising prices despite the hit on margins because customers cannot pay, and there are collection arrears.
Under real effective exchange rate targeting, two balance of payments crises have hit in quick succession, generating what analysts call a 'bust-bust' outcome.
Sri Lanka and its citizens have paid a heavy price for maintaining the soft-pegged exchange rate regime in terms of high inflation, trade restrictions and political instability.
When the currency falls, it is not only drug prices that go up, but other goods (and later services) as well, leaving even less money available for drugs.
The Central Bank has resisted calls to reform its second class peg, which is called a 'flexible' exchange rate. It is now planning to move to a second class inflation targeting regime called 'flexible' inflation targeting. (Colombo/May18/2019)
The list of price controlled drugs with new prices are as follows
|1 ALBENDAZOLE Tablet/ capsule 400mg||36.04|
|2 AMOXICILLIN+CLAVULANIC ACID Oral suspension 156mg/ 5ml||345.35|
|AMOXICILLIN+CLAVULANIC ACID Tablet/ capsule 375mg||42.52|
|AMOXICILLIN+CLAVULANIC ACID Tablet/ capsule 625mg||72.07|
|AMOXICILLIN+CLAVULANIC ACID Injection 1.2g||757.96|
|3 CLARITHROMYCIN Tablet/ capsule 250mg||43.85|
|CLARITHROMYCIN Tablet/ capsule 500mg||88.89|
|CLARITHROMYCIN Oral suspension 125mg/5ml||523.72|
|4 AZITHROMYCIN Tablet/ capsule 250 mg||45.17|
|AZITHROMYCIN Tablet/ capsule 500 mg||63.37|
|AZITHROMYCIN Oral suspension 200mg/ 5ml||210.21|
|5 CEFUROXIME Tablet/ capsule 250 mg||54.66|
|CEFUROXIME Tablet/ capsule 500 mg||87.21|
|6 DOXYCYCLIN Tablet/ capsule 100 mg||12.14|
|7 ACICLOVIR Tablet/ capsule 200 mg||44.44|
|8 CIPROFLOXACIN Tablet/ capsule 250 mg||6.91|
|CIPROFLOXACIN Tablet/ capsule 500 mg||10.22|
|9 LEVOFLOXACIN Tablet/ capsule 250 mg||29.07|
|LEVOFLOXACIN Tablet/ capsule 500 mg||48.05|
|10 CEPHALEXIN Tablet/ capsule 250 mg||9.85|
|CEPHALEXIN Tablet/ capsule 500 mg||18.02|
|CEPHALEXIN Oral suspension 125 mg/5 ml||318.32|
|11 CEFIXIME Tablet/ capsule 100 mg||27.63|
|CEFIXIME Tablet/ capsule 200 mg||51.3|
|CEFIXIME Oral suspension 100 mg/5 ml||414.41|
|12 AMLODIPINE Tablet/ capsule 5 mg||18.38|
|AMLODIPINE Tablet/ capsule 10 mg||25.59|
|13 DILTIAZEM Tablet/ capsule 30 mg||3.25|
|DILTIAZEM Tablet/ capsule 60 mg||10.7|
|DILTIAZEM Tablet/ capsule 90 mg||25.71|
|14 LOSARTA N POTASS IUM Tablet/ capsule 25 mg||8.83|
|LOSARTA N POTASS IUM Tablet/ capsule 50 mg||12.38|
|15 LOSARTA N + Hydrochlorothiazide Tablet/ capsule 62.5 mg||23.36|
|16 ENALAPRIL Tablet/ capsule 5 mg||7.21|
|ENALAPRIL Tablet/ capsule 10 mg||12.14|
|17 ATE NOLOL Tablet/ capsule 25mg||3.6|
|ATE NOLOL Tablet/ capsule 50 mg||5.29|
|ATE NOLOL Tablet/ capsule 100 mg||15.62|
|18 NIFEDIPINE – sustained release Tablet/ capsule 20 mg||4.45|
|19 CLOPIDOGREL Tablet/ capsule 75 mg||21.03|
|2 0 ATORVASTATIN Tablet/ capsule 5mg||7.72|
|AT ORVASTAT IN Tablet/ capsule 10 mg||13.4|
|AT ORVASTAT IN Tablet/ capsule 20 mg||21.14|
|ATORVASTATIN Tablet/ capsule 40 mg||29.74|
|21 ROSUVASTAT IN Tablet/ capsule 5 mg||25.83|
|ROSUVASTAT IN Tablet/ capsule 10 mg||44.44|
|22 TELMISARTA N Tablet/ capsule 20 mg||12.25|
|TELMISARTA N Tablet/ capsule 40 mg||19.46|
|TELMISARTA N Tablet/ capsule 80mg||36.52|
|23 ASPIRIN Tablet/ capsule 75 mg||3.6|
|ASPIRIN Tablet/ capsule 100 mg||6.37|
|24 METFORMIN Tablet/ capsule 500 mg||4.75|
|METFORMIN-sustained release Tablet/ capsule 500 mg||9.25|
|METFORMIN Tablet/ capsule 850 mg||8.89|
|25 GLIBENCLAMIDE Tablet/ capsule 5 mg||2.64|
|26 GLICLAZIDE Tablet/ capsule 80mg||13.58|
|27 THYROXINE Tablet/ capsule 50 mcg||7.33|
|THYROXINE Tablet/ capsule 100 mcg||10.94|
|28 GLIPIZIDE Tablet/ capsule 5 mg||9.5|
|29 IBUPROFEN Tablet/ capsule 200 mg||1.33|
|IBUPROFEN Tablet/ capsule 400mg||4.45|
|30 DICLOFENAC SODIUM Tablet/ capsule 50 mg||15.62|
|DICLOFENAC SODIUM Tablet/ capsule 100 mg||18.14|
|31 DICLOFENAC POTASSIUM Tablet/ capsule 50 mg||13.16|
|32 PARACETAMOL Tablet/ capsule 500 mg||1.57|
|33 SODIUM VALPROATE Tablet/ capsule 200 mg||10.81|
|34 RISPERIDONE Tablet/ capsule 1 mg||9.5|
|RISPERIDONE Tablet/ capsule 2 mg||11.11|
|35 OLANZAPINE Tablet/ capsule 5 mg||12.01|
|OLANZAPINE Tablet/ capsule 10 mg||24.98|
|36 CARBAMAZEPINE Tablet/ capsule 200 mg||14.41|
|37 ALPRAZOLAM Tablet/ capsule 0.25 mg||7.81|
|ALPRAZOLAM Tablet/ capsule 0.5 mg||11.9|
|38 FLUOXETINE Tablet/ capsule 20 mg||13.21|
|39 GABAPENTIN Tablet/ capsule 100 mg||20.12|
|GABAPENTIN Tablet/ capsule 300 mg||39.82|
|40 BECLOMETHASONE DP capsule (inhalation) 200 mcg||7.21|
|BECLOMETHASONE DP capsule (inhalation) 400 mcg||8.17|
|BECLOMETHASONE Metered dose inhaler (200 doses)100 mcg||609.61|
|BECLOMETHASONE Metered dose inhaler (200 doses)250 mcg||673.87|
|41 SALBUTAMOL DP capsule (inhalation) 200 mcg||4.8|
|SALBUTAMOL DP capsule (inhalation) 400 mcg||6.61|
|SALBUTAMOL Metered dose inhaler (200doses)100 mcg||372.37|
|42 METHYL PREDNISOLONE Tablet/ capsule 4 mg||14.23|
|METHYL PREDNISOLONE Tablet/ capsule 16mg||49.25|
|43 OMEPRAZOLE Tablet/ capsule 20 mg||5.41|
|44 PANTOPRAZOLE Tablet/ capsule 20 mg||20.42|
|PANTOPRAZOLE Tablet/ capsule 40 mg||33.63|
|45 ESOMEPRAZOLE Tablet/ capsule 20 mg||24.26|
|ESOMEPRAZOLE Tablet/ capsule 40 mg||46.13|
|46 DOMPERIDONE Tablet/ capsule 10 mg||6.49|
|47 RABEPRAZOLE Tablet/ capsule 10 mg||13.58|
|RABEPRAZOLE Tablet/ capsule 20 mg||25.89|
|48 ALENDRONIC ACID Tablet/ capsule 70 mg||121.8|
|49 CEFTAZIDIME Injection 500 mg||549.12|
|CEFTAZIDIME Injection 1 g||915.2|
|50 CEFTRIAXONE Injection 250 mg||274.56|
|CEFTRIAXONE Injection 500 mg||514.8|
|CEFTRIAXONE Injection 1 g||800.8|
|51 CEFOTAXIME Injection 500 mg||257.4|
|CEFOTAXIME Injection 1 g||429|
|52 FLUCONAZOLE Tablet/ capsule 50 mg||28.6|
|FLUCONAZOLE Tablet/ capsule 150 mg||51.48|
|53 INSULIN SOLUBLE HUMAN Injection 100 IU/1ml||1,372.80|
|INSULIN SOLUBLE HUMAN Injection 100 IU/1ml||686.4|
|INSULIN ISOPHANE HUMAN Injection 100 IU/1ml||1,372.80|
|INSULIN ISOPHANE HUMAN Injection 100 IU/1ml||686.4|
|BIPHASIC ISOPHANE INSULIN Injection 100 IU/1ml|
|(AS INSULIN SOLUBLE HUMAN (10 ml vial)||1,372.80|
|30IU/1ml, INSULIN ISOPHANE|
|HUMAN 70IU /1ml)|
|BIPHASIC ISOPHANE INSULIN Injection 100 IU/1ml||686.4|
|(AS INSULIN SOLUBLE HUMAN (3 ml cartridge)|
|30IU/1ml, INSULIN ISOPHANE|
|HUMAN 70IU /1ml)|
|54 GLIMEPIRIDE Tablet 1 mg||8.18|
|GLIMEPIRIDE Tablet 2 mg||11.61|
|GLIMEPIRIDE Tablet 3 mg||19.45|
|GLIMEPIRIDE Tablet 4 mg||21.16|
|55 SITAGLIPTIN Tablet 25 mg||17.16|
|SITAGLIPTIN Tablet 50 mg||32.6|
|SITAGLIPTIN TTablet 100 mg||55.48|
|56 TAMSULOSIN Tablet/ capsule 0.40 mg||24.02|
|57 MONTELUKAST Tablet 4 mg||13.73|
|MONTELUKAST Tablet 5 mg||17.16|
|MONTELUKAST Tablet 10 mg||24.02|
|58 PREGABALIN Tablet/ capsule 50 mg||14.01|
|PREGABALIN Tablet/ capsule 75 mg||17.73|
|PREGABALIN Tablet/ capsule 100 mg||22.02|
|PREGABALIN Tablet/ capsule 150 mg||27.46|
|PREGABALIN Tablet/ capsule 300 mg||45.19|
|TOPIRAMATE Tablet/ capsule 25 mg||22.88|
|TOPIRAMATE Tablet/ capsule 50 mg||36.61|
|TOPIRAMATE Tablet/ capsule 100 mg||59.49|
|60 LAMOTRIGINE Tablet 25 mg||13.73|
|LAMOTRIGINE Tablet 50 mg||24.02|
|LAMOTRIGINE Tablet 100 mg||40.04|