Sri Lanka state pharma control agency starts to throw its weight around: report

ECONOMYNEXT – Sri Lanka’s newly set up regulatory agency set up with people’s money has started to ‘humiliate’ pharma companies who had made access to drugs even in remote regions possible at among the lowest prices in the world.

Unlike basic foods and building materials whose prices are kept artificially high at levels among the highest in the world by import duties and other trade restriction imposed by the state with the collusion of the politicians, drugs have not been blocked up to now by either regulators or ‘domestic producers’ seeking unjust profits.

Free trade in medicinal items have provided original branded drugs at higher prices and generics on which no efficacy tests have been performed at lower prices.

Sri Lanka’s The Island newspaper said in a report that the ‘The National Medicinal Drugs Regulatory Authority’ (NMDRA) has begun ‘humiliating’ and ‘harassing’ drug company representatives who were visiting the agency.

The NMDRA was also refusing to issue no objection letters to clear consignments of drugs, the report said.

"I concede that the PR (Public Relations) of the senior official concerned is not that great at times, but the assertion that the regulatory body is twiddling its thumbs is unacceptable", The Island quoted Lal Jayakody, NMDRA’s Chairman as saying.

There are fears that the regulatory agency, which is set up costing people more money, will impose price controls on drugs, which can favour large firms and pharmacies, reduce the number of drugs in a category and kill competition and generate shortages if the controls are completely out of line.

There are also fears that drugs that are rarely used – which therefore costs more stock and keep than widely selling drugs – will go off the market if the agency uses its bureaucratic and coercive powers to control prices strictly.

Sri Lanka’s pharmaceuticals trade has built a large network of pharmacies amid strong competition allowing easy access to drugs saving poor patients in remote areas in particular time and money in getting access to drugs.

Even small towns now have several pharmacies which serve customers quickly.

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The state has banned some drugs from the private trade on the pretext that some people (not patients) are abusing them, and are penalising sick people and their relatives by forcing them to travel great distances to state pharma outlets which have been given a monopoly.

Sri Lanka’s rulers and the consumer authorities has in the past imposed price controls on bread, milk, petrol and other items of less essential goods generated shortages and forced the creation of black markets after printing money to generate inflation, foreign exchange shortages and inflation.

Shortages were most acute during the 1970s when socialist policies were practiced and almost all Treasury bills sold by the Treasury was acquired by the Central Bank. The drug control authority was also set up holding up a drug policy by proposed by Senaka Bibile, a noted Marxist.

Sri Lanka is now printing money heavily to pay state salaries and the rupee is falling. In the last four months over 170 billion rupees had had been monetized. When a currency falls, not only branded drugs but also the price of generics go up.

 

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