Sri Lankan pharmaceutical prices lowest in the region says trade body

With media reports mounting on the possibility of price controls for pharmaceuticals and the general perception being created that pharmaceutical prices are escalating in the market, the Sri Lankan Chamber of Pharmaceutical Industries (SLCPI) has come out strongly against, saying that in fact the opposite as true.

Vish Govindasamy, President of the SLCPI, addressing the media yesterday said that, “The prices of essential pharmaceuticals have been dropping through the years and this is mainly because of the healthy competition that is currently prevailing in the market.”

The Indian Journal of Pharmacology 2011, last February carries a report on ‘Medicine Prices, availability and affordability’ compiled by several eminent parties in the Sri Lankan Medical fraternity, including Professor B. M. Rohini Fernandopulle, M.B.B.S. (Ceylon), Ph.D. (Colombo) Professor in Clinical Pharmacology, Department of Pharmacology and PharmacyUniversity of Colombo.  The reportsays “In Sri Lanka, generic medicines have effective pricing and are available and affordable. No drastic changes in prices of medicine in the private sector were observed over the 6 years despite removal of price control.”

The SLCPI is warning of several issues including the following negative impacts that would result; in the event price regulations are implemented, in the local market:

lReputed suppliers will withdraw from the Sri Lankan market due to unattractive market conditions, thereby causing a shortage of Essential Pharmaceuticals

lCompetition will reduce due to a lesser number of suppliers, which would lead to price increases, thus drastically increasing the state health care spend

lPossibility of newer molecules not being available due to the higher investment required in medical education

lCreation of a ‘Grey’ market

lOperational issues in implementing and monitoring of price control

lNo clear cost base for local manufacturers

lMany retail pharmacies will be out of business due to unavailability of products, the businesses will become unviable, leading to unemployment and resulting unrest.

The Chamber pointed out that ultimate loser from all this would be the patient reiterates that regulationof pharmaceutical prices is a pointless exercise because they have remained stable in thecountry for over the last 10 years.   

In fact comparisons show that Sri Lankan pharmaceutical prices areamongst the lowest in the region. Research shows that local pharmaceutical prices by far and large are lower than WHO reference prices for developing countries and have remained stable or in some instances even reduced.

The SLCPI stresses that the Sri Lankan health care system has a well-balanced formula which is inclusive of all income group levels i.e. free medicine at all government hospitals and clinics to every citizen of Sri Lanka irrespective of income; medicine at government prices through State Pharmaceutical Corporation (SPC) established OsuSala pharmacies; Private Sector Pharmacies & Clinics.   In addition to this, the state owned SPC, helps to keep pharmaceutical prices in check, ensuring access, price affordability and stability.

This combination has worked very successfully in managing the health of this country and Sri Lanka is in the forefront of importingup to the minute pharmaceuticals to overcome the newer diseases and conditions that continue to affect the world today.

“With the world talking of pandemics that break out without any warning, there is a dire need for us to have pharmaceutical manufacturers who have Sri Lanka on their list, to supply cutting edge innovator drugs.  If prices control is implemented, we will find the large pharmaceutical companies moving out and this will be extremely detrimental to the helpless patient” says the President of SLCPI.

The SLCPI also point out the importance for Sri Lanka to have a conducive market situation for the full range of pharmaceutical suppliers, from generic and generic branded to new innovator drugs to access our market without hindrance. The SLCPI is of the opinion that authorities should not act on notional dipstick surveys of the market but should have a proper understanding of why sometimes there are price increases from pharmacy to pharmacy.  The simplest explanation to this is that some pharmacies may have older stocks with prices that may differ from the newer stocks. This may happen largely due to external factors like dollar-rupee fluctuations.”

The SLCPI points out that according to the Department of Census and Statistics 2009/2010 Report, the cost of medical/pharmaceutical products is less than 1% of the average household’s non-food expenditure.  Therefore it is clear that the price of pharmaceuticals is not a significant contributory factor towards household expenses increasing. They caution that if price regulation is implemented and the current healthy competitive atmosphere is removed from the pharmaceutical market in Sri Lanka, demand and supply forces may act to push prices up.  This would be very unfortunate, as Sri Lanka currently has had the lowest pharmaceutical prices in the region for over 10 years.