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Saturday March 2nd, 2024

Sri Lanka pharma firms call for drug price formula

ECONOMYNEXT – The Sri Lanka Chamber of Pharmaceutical Industries (SLCPI) is calling for a price formula with identified components which will be regularly revised in place of the ad hoc price controls now imposed by a regulator, an official said.

The National Medicine Regulatory Authority (NMRA), Sri Lanka’s medicine regulator, controls over 61 drugs that are imported into the country.

With the recent strengthening of the rupee against the US dollar, prices of the 61 controlled drugs have lowered by 16 percent from this month after negotiations with the industry.

Drug firms have seen costs go up as the rupee fell.

Though import costs have fallen with the central bank strengthening the rupee, drug storage and supply involves multiple costs which have gone up with electricity prices, according to the industry.

“We believe it is crucial to factor in the unique expenses associated with the pharmaceutical sector,” M. Prathaban, the newly elected president of the SLCPI, at its annual general meeting.

“This includes cold chain maintenance, temperature control of warehouses and retail outlets, transportation, as well as heating.”

Prices should be reviewed on a regular basis, he said.

“All these variables should be included, and then we need to arrive at a mechanism,” Prathaban said.

“We can define whether we review it every 3 months or later every 1 month,”

“We are hopeful that within the next 3-4 months, we will be able to develop a fair and workable price mechanism that takes into account these industry-specific expenses.”

Changing management and administration of authorities as well as software problems at the medical regulator had complicated matters.

“Over the past 5 years, there have been frequent changes in the administration of institutions, resulting in a lack of stability,” he said.

“Additionally, there have been issues with the e-platform, which recurred, and a significant backlog in the day-to-day operations.”

“These challenges have left the industry in a state of uncertainty and have required constant engagement to handle even simple matters.

Nevertheless, with the recent appointment of a new CEO, we have seen improvements and consistency of performance, which has led to optimism among suppliers that they can place their confidence in the institution.”

The industry also wants a drug registration fee now defined in US dollar to be redefined in rupees.

“Regulatory fees were increased exorbitantly with the introduction of the NMRA Act in 2016,” he said.

“In addition, the fees were defined in US dollars, making them susceptible to exchange fluctuations.

“You can’t change that on a monthly basis based on dollar fluctuations. I see. So you want to have a rupee-based registration fee for the month.”

The basis for charging the fee should also be revised, he said. (Colombo/June26/2023)

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Sri Lanka eyes SOE law by May 2024 for better governance

ECONOMYNEXT – Sri Lanka is planning to pass a Public Commercial Business (PCB) Act improve governance of state-owned enterprise by May 2024 as part of an anti-corruption efforts following an International Monetary Fund assessment.

Sri Lanka’s state enterprises have been used by politicians to give ‘jobs of the boys’, appropriate vehicles for personal use, fill board of directors and key positions with henchmen and relatives, according to critics.

Meanwhile macro-economists working for the state also used them to give off-budget subsides or made energy utilities in particular borrow through supplier’s credits and state banks after forex shortages are triggered through inflationary rate cuts.

The government has taken billons of dollars of loans given to Ceylon Petroleum Corporation from state banks.

There have also been high profile procurement scandals connected to SOEs.

An SOE Reform Policy was approved by Sri Lanka’s cabinet of ministers in May 2023.

The Public Commercial Business (PCB) Act has now been drafted.

A holding company to own the SOEs will be incorporated and an Advisory Committee and Board of Directors will be appointed after the PCB law is approved, the statement said. (Colombo/Mar01/2024)

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Sri Lanka rupee closes at 308.80/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 308.80/90 to the US dollar Friday, from 309.50/70 on Thursday, dealers said.

Bond yields were broadly steady.

A bond maturing on 01.02.2026 closed at 10.65/75 percent up from 10.50/70 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent from 11.90/12.10 percent.

A bond maturing on 01.07.2028 closed at 12.15/35 percent down from 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.25/40 percent up from 12.30/45 percent.

A bond maturing on 15.05.2030 closed at 12.30/45 percent down from 12.35/50 percent.

A bond maturing on 01.07.2032 closed at 12.50/13.00 percent from 12.55/13.00 percent. (Colombo/Mar1/2024)

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Sri Lanka stocks close up 0.37-pct, Expo to de-list

ECONOMYNEXT – The Colombo Stock Exchange closed up 0.37 percent on Friday, and SG Holdings, the parent company of Expolanka Holdings Plc, said it was taking the company private.

Expolanka is the largest listed company on the Colombo Stock Exchange.

“Expolanka Holdings PLC has, at the Board Meeting held on 1st March 2024, considered a request from its principal shareholder and resolved to initiate the de-listing of the Company’s shares from the Official List of the Colombo Stock Exchange subject to obtaining necessary shareholder approval and regulatory approvals,” the company said in a stock exchange filing.

As per arrangements with SG Holdings Global Pte Ltd, the Company’s majority shareholder, it will purchase its shares from shareholders who may wish to divest their shareholding in the Company at a purchase price of Rs 185.00 per share. The share closed up at 150.50.

The broader All Share Index closed up 0.37 percent, or 39.47 points, at 10,691; while the S&P SL20 Index closed down 0.64 percent, or 19.59 points, at 3,037.

Turnover stayed above the 1 billion mark for the sixth consecutive day, registering 1.4 billion.

Crossings in Melstarcorp Plc (135mn) up at 89.50, Hatton National Bank Plc (64mn) up at 158.00, Hemas Holdings Plc (53mn) up at 75.00 and Central Finance Company Plc (26mn) up at 103.50, added significantly to the day’s turnover.

“The upward trend is continuing, with more retail buying also coming in, the number of trades was more than 10,000 today,” a market participant said. “Investors are looking for undervalued stocks and buying in quantities.” (Colombo/Mar1/2024).

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