Health Minister admits Govt. owes Rs. 8.1 b to essential medicines suppliers

• In response to SJB MP Marikkar’s poser in Parliament, Minister Dr. Ramesh Pathirana confirms arrears amounting to Rs. 4b, which have been overdue for over 90 days, will be settled within the month
• Assures there is no current shortage of medicinal drugs despite pending payments
• Claims only 19 medicines are in short supply and situation is not severe as local purchasing allocations have been made available for hospitals
• Promises pending payments of Rs. 156 m to gauze suppliers will be prioritised, with 50% to be settled this month

Health Minister Dr. Ramesh Pathirana

MP S.M. Marikkar

Health Minister Dr. Ramesh Pathirana has admitted that the Government owes Rs. 8.1 billion to suppliers of medical drugs for Government hospitals.

Responding to a question posed by Samagi Jana Balawegaya (SJB) MP S.M. Marikkar in Parliament yesterday, the Minister revealed that the Government owes Rs. 5.7 billion to medicine suppliers, Rs. 156 million to gauze suppliers, and an additional Rs. 1.1 billion to various district-based suppliers. He also mentioned that an unspecified amount is owed to around 10 other companies, bringing the total arrears to Rs. 8.1 billion. However, Dr. Pathirana assured that the Government will take steps to settle the outstanding payments soon. He stated that arrears amounting to Rs. 4 billion, which have been overdue for over 90 days, will be settled within the month.

He also noted that while the Government owes Rs. 132 million to Isolez Biotech Pharma AG Ltd., all payments have been halted due to a Court order related to the case concerning the importation of substandard human immunoglobulin IV vials to Sri Lanka. In response to a follow-up question by Marikkar about whether the health sector will face a drug shortage due to the delay in payments, the Minister assured that there is no current shortage of medicinal drugs despite the pending payments.

The Minister explained that while the Government purchases 850 types of medicines from suppliers, only 19 medicines are currently in short supply. He emphasised that the situation is not severe, as local purchasing allocations have been made available for hospitals to manage the situation.

To address any concerns, the Minister also claimed that the Government has allocated Rs. 180 billion for drug purchases, the highest allocation ever.

He acknowledged that there are delays in processing invoices and sending them to the Treasury for payment, but assured that this will not disrupt the supply of medicines.

However, Marikkar pointed out that around 400 gauze manufacturers are experiencing severe financial hardships and are struggling to stay in business due to the delay in payments. 

“We have instructed that their payments be prioritised, and 50% of the arrears will be settled this month,” the Minister promised.