Artificial intelligence (AI) in healthcare has come to stay and is a well-recognised development over the last decade or so. AI has now progressed on to even the ability to execute quite a few tasks and manoeuvres that were once the sole duties of doctors. Certain AI programmes are now designed to make tricky diagnoses, offer mental counselling, detect drug interactions, read and diagnose images, forecast results, and review scientific articles, to name a few amongst other capabilities. As the aptitudes of AI increase, the roles of doctors are likely to change. In the future, there is a real possibility that physicians would increasingly be placed in supervisory roles in semiautonomous systems, while retaining responsibility but with reduced independence.

Philosopher Walter Benjamin, in the 1930s, wrote that photography and cinema would have a telling effect on paintings and painters. It was argued that the introduction of visual images would render painting and painters quite obsolete. Many belittled the artistic value of photographs, just as today, many ask whether AI can truly understand illness or empathise with discomfort. The opponents of photography theorised that original works of art, such as paintings, had a so-called aura and that there was something special about an original artwork compared to a reproduction as a photo image, and that the painting echoed its singular history and unique trajectory through time, space, and social meaning.

Today’s doctors have something comparable. Their professional authority was grounded in their unique training, the practical wisdom that they had accrued, their face-to-face presence with patients, and their nuanced clinical judgment. Like an original painting, medical expertise appeared singular and inseparable from the clinician who exercised it rather than from the tools or institutions that supported the physician’s practice.

Now enters the latest AI initiative in healthcare. As documented in the Journal of the American Medical Association (JAMA) on the 13^th of April 2026, it is the very first AI DRUG PRESCRIBER. It originated in the state of Utah of the United States of America, which is the 45th state admitted to the Union on the 4^th of January 1896, and is well-known for its unique geography, including the Great Salt Lake and its “Mighty 5” national parks: Zion, Bryce Canyon, Arches, Capitol Reef, and Canyonlands.

In January 2026, the State of Utah publicised a first-of-its-kind partnership with an AI company to develop an AI-based programme to prescribe medications without physician involvement. The AI prescriber package sold by the company Doctronic is claimed to conduct a “comprehensive medical assessment” that “mirrors the clinical decision-making process a licensed physician would follow“. Originally, it was intended to focus on prescription renewals, and the software is designed to prescribe almost 200 drugs, including corticosteroids, statins, antidepressants, hormones, and anticoagulant agents. It has the potential to develop into an autonomous system that could even provide original prescriptions without the involvement of doctors.

There are perceived advantages to AI prescribing in a world facing shortages of primary care physicians, as well as certain specialists. The public health goal is to make sure that patients have access to safe, effective drugs and continue receiving them for as long as it is appropriate. There are documented scientific studies in Western countries on non-adherence, failure to take the drugs of a first prescription, and failure to get refill prescriptions. True enough, AI could reduce pervasive medication errors, enhance process efficiency, and free physicians to focus on complex diagnostic tasks or human-to-human interactions.

Yet for all that, technology-driven revolutions can also cause damage, create waste, and even destabilise the medical connection. They could reduce the patient-clinician encounters and substantially reduce the prospects for physicians to spot other problems and for patients to raise anxieties and ask questions. Doctors have to go through a rigorous process of training and demonstration of clinical fitness to be allowed to practice medicine. AI prescribers face no equivalent safety process. AI companies generally do not openly reveal the precise operational details of the software’s abilities to make medical decisions. In the Utah deal, generalisations were offered, including that the AI prescriber is “trained on established medical protocols,” and that its algorithm continues to progress through “feedback loops.” However, they are far from the absolute detailed guarantees that training of a physician offers.

In the American System of Governance, most states have long maintained foundational laws for dispensing medicines, positioning licensed physicians and pharmacists as essential caretakers and even as gatekeepers. Federal Law requires that any drug that “is not safe for use except under the supervision of a practitioner licensed by law” must be dispensed only “upon a written prescription of a practitioner licensed by law“. AI prescribers are not licensed “practitioners” of medicine, and here, Utah has waived state requirements. It has waived State Laws for businesses with novel ideas deemed potentially beneficial to consumers.

Under the main FDA statute, an AI prescriber comes under an “instrument, apparatus, implement, or machine clearly intended for use in the cure, mitigation, treatment, or prevention of disease,” which makes it an FDA-regulated medical device. The 21st Century Cures Act of 2016 created exemptions for software involving administrative support, general wellness, or electronic record storage. For clinical software, the FDA has generally exercised enforcement discretion only for tools that aid physician decisions. By design, AI prescribers remove the physician, meaning that FDA oversight is required.

However, in the Utah deal, the company has apparently not attempted to approach the FDA about the technology, thereby working on the presumption that the FDA does not regulate the practice of medicine. True enough, Federal Law and the FDA itself express that the FDA does not regulate the practice of medicine. However, Federal Law also emphasises that medical devices and drugs must be legally sold and used within a legitimate patient-clinician relationship. Federal Law does not permit the replacement of physicians with unlicensed computers.

The scientific aspects of the conundrum imply that the current political administration appears to be disregarding some of the federal oversight. Since its 2025 inauguration, the executive branch of the current administration has rescinded previous AI governance orders, encouraged the removal of policies that might impair innovation, and issued an executive order aimed at reducing federal funds for states that strictly regulate AI. The USA Commissioner of Food and Drugs has clearly emphasised the need for AI innovation. Given this antiregulatory environment for AI, the prospect of federal intervention against initiatives like AI prescribers appears to be quite slim.

As federal and state regulators retreat, private parties have stepped in. The Joint Commission (TJC), a private, non-profit organisation that functions as the primary accrediting body for healthcare organisations, recently released non-binding guidance urging healthcare organisations to establish internal AI governance structures and rigorously measure outcomes. The success of AI prescribers will ultimately depend on the acceptance of health systems, which should demand robust evidence of safety and effectiveness, optimally in the form of clinical trials.

Tort law, a branch of civil law that deals with public wrongs such as situations where one person’s behaviour causes some form of harm or loss to another, remains a potential avenue for addressing patient harm because Utah’s agreement leaves such remedies intact. However, injured patients face significant hurdles. Courts will have to determine whether AI could be held to the same standard of care as a human physician. A product liability lawsuit would typically require a plaintiff to show that there was a reasonable alternative design, a challenge for AI black-box technologies. Furthermore, companies might argue that patients “assumed the risk” of using the AI prescriber. However, that is not a complete defence.

AI prescribing would be safest under concurrent state and federal oversight. Yet Utah has granted a state waiver, and FDA compliance has not been demonstrated. Other companies may take the lesson that they can bypass federal safety standards, and they may race into the market to ensure they are not left behind.

Some examples beg for caution. The FDA fell behind in regulating flavoured e-cigarettes, which are now ubiquitous and have contributed to a youth e-cigarette epidemic, which has even reached Sri Lanka. The sheer scale of the unauthorised market and the subsequent legal tactics used by tobacco companies turned premarket requirements into a mere technicality. If AI prescribing becomes the industry standard before safety and liability frameworks are established, the power problem may render future regulation infeasible.

Although AI offers the promise of increased efficiency and expanded access, the evasion of legal obligations by early movers raises profound concerns. The company that is marketing the AI Prescriber is operating in a unique legal “grey zone” that has sparked intense debate among regulators and medical associations.

Incorporating AI into modern health care must be evidence-based and responsible. Physicians and health systems should insist that AI technologies should not be allowed to bypass long-standing and proven legal guardrails governing medical products. That needs to be the axiom that should apply not only to the Western nations but to the whole wide world.

by Dr B. J. C. Perera

MBBS(Cey), DCH(Cey), DCH(Eng), MD(Paediatrics), MRCP(UK), FRCP(Edin), FRCP(Lond), FRCPCH(UK), FSLCPaed, FCCP, Hony. FRCPCH(UK), Hony. FCGP(SL)

Specialist Consultant Paediatrician and Honorary Senior Fellow, Postgraduate Institute of Medicine, University of Colombo, Sri Lanka.

An Independent Freelance Correspondent.

The Geathiswaran Chapter:

Dr. Ganesanathan Geathiswaran, Sri Lanka’s Deputy High Commissioner in Chennai is in hot water, dragging in with him the Foreign Ministry as well as the Sri Lanka government into a worthless controversy. It stands as a classic example of a misplaced political appointment to a sensitive public position paid for by hapless Sri Lankan taxpayers. And that too by a government that came to power promising not to politicise appointments.

Why would a meeting between a Sri Lankan diplomat and a group of fishermen in South India in the last week of March 2026 be controversial? After all, illegal fishing in Sri Lankan waters by South Indian fishermen from the Tamil Nadu area, which negatively impacts the livelihoods of mostly Tamil-speaking Sri Lankan fishing communities, is a perennial problem that neither Sri Lankan nor Indian governments have been able to resolve. This is also a consistent political issue in Tamil Nadu politics. In this context, a Sri Lankan diplomat meeting local fishermen might well be within his job description. But the issue is how and where such a meeting should take place. The bottom line is that it should not be a public event.

Speaking to The Hindu on 5April 2026, Geathiswaran insisted his presence in the meeting was a “routine visit” and that the event was not organised by any political party. He also said, “I’m not here to do politics” and “I have nothing to do with politics.” He further insisted, “I did not take part in any political campaign. It was in an open area along the seashore. The meeting was not on a stage and in a public area.” These utterances show both Geathiswaran’s naivety, woeful lack of experience and understanding of the nature of politics in the region where he is our country’s chief diplomat.

Be that as it may, let us look at the optics and substance of the said event. According to information circulating in the media in both Sri Lanka and India, the Deputy High Commissioner attended a meeting with local fishermen in Puducherry. It was not a closed-door meeting. It appears, the Sri Lankan diplomat was invited to the event or it was coordinated by Jose Charles Martin, the leader of the newly formed political party, Latchiya Jananayaga Katchi (LJK). Though launched only in 2025, the LJK has been making inroads into Tamil Nadu politics mostly funded by the business interests and funds of Martin’s father, the well-known lottery tycoon, Santiago Martin. LJK joined the BJP-led NDA in the ongoing Puducherry Assembly Elections of 2026. Moreover, as indicated in the photographs in circulation, one can easily see the presence of several BJP politicians including V. P. Ramalingam, BJP’s Puducherry president and a candidate in the Raj Bhavan constituency.

Members of Martin’s family are craftily aligned with different Tamil Nadu political formations. Jose Charles Martin himself is contesting the Puducherry electoral area as a BJP ally, while his mother is contesting from the AIADMK, and his brother-in-law is contesting as a candidate of the Tamilaga Vettri Kazhagam (TVK) party.

Therefore, Geathiswaran’s assertion that the event was not organised by a political party is blatantly false. Further, the event does not become non-political just because of the absence of a stage just as much as a stage does not provide political attributes merely because of its higher elevation. It is unacceptable that a diplomat hand-picked by the Sri Lankan President for the important station of Chennai, thereby depriving the appointment of a senior career diplomat with years of work experience and awareness of political nuance and optics, can be allowed to be this naïve.

It is in this context that Pawan Khera, a senior leader of the Indian National Congress, complained in an X post on 4 April tagging the Indian External Affairs Minister noting that Geathiswaran’s participation in the meeting was “a gross violation of the 1961 Vienna Convention on Diplomatic Relations”, according to which “diplomats ‘have a duty not to interfere in the internal affairs of that State.’” He also noted in his post that the diplomat was invited by the leader of the LJK and also referred to the presence of senior BJP politicians. Leaving aside the overemphasis of the Vienna Convention, which in this instance makes no sense, the issue at hand is the complete lack of common sense on the part of the Sri Lankan diplomat that allowed this controversy to arise in the first place. Despite his insistence on not engaging in politics, which in the case is likely true, this was very clearly a political event, politically conceived, perceived and packaged, organised by a political party, and conducted in the presence of allied politicians who were contesting in a local election. As a foreign diplomatic representative, Geathiswaran should have the cerebral wherewithal to make the distinction or at least seek guidance from his superiors at the Foreign Ministry in Colombo.

Diplomats need not shy away from controversy if it makes sense and benefits the nation. But the incident under reference is purely nonsensical from any perspective. This brings me back to Geathiswaran’s appointment as Sri Lanka’s Deputy High Commissioner in Chennai, itself. What unique experiences did he bring to the post? Of course, he is Tamil-speaking. So are hundreds of thousands of other citizens in the country including potentially competent, well-trained, intelligent and experienced career diplomats. I am not saying that political appointments are necessarily unfavourable, though not ideal unless they bring to the service expertise that the Foreign Service does not have. But what quality and qualification does Geathiswaran possess for the position that is lacking in a career foreign service officer?

Does he bring in access to the different segments of Tamil Nadu political landscape that no one else has? If so, should this controversy not have arisen in the first place, owing to the good connections to the entire political spectrum? In short, he brings absolutely nothing to his office and the country he represents. He also does not have any diplomatic or any other public or private sector experience that would have injected sense and nuance into the present posting. His only qualification is the close political connection to the NPP through family.

This fiasco brings to mind some ideas I presented in 2024 in the government’s own newspaper, the Observer two weeks before the NPP government was established and about one month after President Dissanayake assumed office. Since those conditions still remain valid and the present incident raises the same alarm I raised then, I think it is worth reflecting on them yet again:

“During the last three decades, particularly during the Rajapaksa administration, Sri Lanka’s Foreign Service saw a significant nosedive … In real terms what this means is, the Foreign Service has been encroached by individuals purely based on their political and nepotistic connections, with little or no regard for requisite qualifications, expertise or experience. This is observed not only at ambassadorial level, but also right down to the junior levels in our overseas missions … The main reason for the sorry state of the Sri Lanka Foreign Service is that it has been problematically and parochially politicised over a long period of time, without any pushback … Political appointments are a serious problem. Due to the appointment of completely unqualified individuals on political patronage, there are very few intelligent and well-trained personnel in our embassies in the major cities of the world who are able to proactively work in the country’s interest, when problems arise at the global level. Furthermore, it is also not apparent if there are officials in the Ministry who can advise their unenlightened political superiors without fear and stand their ground on principle. This situation has come about as a matter of simple personal survival and bread-and-butter purposes, owing to which both the larger interest of the Service and self-respect of officers have been clearly compromised.”

Is this not what the Chennai incident also indicates? Geathiswaran being a wrongful appointment is one matter. But it also appears that he did not even have the common sense to seek advice before the meeting in Puducherry or such advice was simply not forthcoming or heeded, as political appointees are generally considered a know-it-all bunch who have the ears of the political hierarchy, and therefore above the norms and regulations that apply to mere career officials.

For many of us the advent of the NPP to power signified the dismantling of the culture of political patronage in which diplomatic postings were rewards for loyalty and friendships. It took less time for the present government than others to go against its own repeatedly stated pre-election positions and to stuff the Foreign Service with incompetent individuals. The present fiasco authored by one of these appointees exemplifies the consequences of this continuing malpractice.

Let me leave readers and government apologists with the words of Tom Nichols, former professor at the U.S. Naval War College about Trumpian ambassadorial appointments, as this applies to our country too: “[With some of his ambassador choices], Trump has elevated diplomatic incompetence to an art.”

Sri Lanka just might outdo the mighty US President on this score.

Key Points

* Lack of transparency and competitiveness in procurement processes

* Financial losses due to coal purchases above international market prices

* Weak contract management and oversight

* Reduced efficiency in electricity generation due to poor-quality coal

* Lack of long-term planning leading to increased emergency procurement

* Inefficient allocation of public resources resulting in lost social benefits

* Additional burden on citizens and the state due to avoidable costs (deadweight loss)

* Not an isolated issue—but a systemic governance failure

Coal procurement, a primary input for electricity generation in Sri Lanka, has, in recent years, become a highly contested policy, financial, and governance issue. Given its direct impact on energy security and the fiscal position of the state, decisions in this sector carry far-reaching economic and social consequences.

However, this issue cannot be understood merely as a matter of cost or operational efficiency. It must be viewed through a broader political economy lens—where power, incentives, and institutional structures interact. In sectors involving large financial flows, such as coal procurement, decisions are not always driven purely by economic logic. They are often shaped by institutional interests, power relations, and political influence.

In this context, the Auditor General’s special report offers more than a record of irregularities. It provides a clear window into deeper structural weaknesses in public decision-making—particularly the misalignment between accountability, transparency, and incentive structures.

The purpose of this article is not only to summarise the findings of that report, but to interpret them through key economic concepts in order to better understand the nature of the problem. Crucially, this is not simply a case of “bad decisions,” but of a system that consistently produces inefficient outcomes.

Irregularities but not the whole story

At first glance, the Auditor General’s findings point to a series of operational weaknesses: lack of competitive tendering, limited transparency in supplier selection, and deficiencies in contract management. These shortcomings undermine both trust and efficiency in the procurement process, leading to market distortions.

At the same time, purchasing coal at prices above international benchmarks places a direct burden on public finances. This is not merely a matter of higher expenditure—it represents a deadweight loss, where resources are spent without generating corresponding social benefits. Ultimately, these costs are passed on to the public, often through higher electricity tariffs.

Weak contract management and delays in supply further increase transaction costs, while the use of substandard coal reduces productivity in electricity generation, pushing overall costs even higher.

Taken together, the absence of long-term planning and the reliance on emergency procurement create a system characterised by uncertainty and inefficiency.

More importantly, these issues should not be seen as isolated failures. They are interconnected processes within a single system. Reduced transparency weakens competition; weak competition leads to overpricing; poor contract enforcement exacerbates quality and delivery problems. Over time, these factors reinforce one another, creating a cycle in which inefficiency becomes self-sustaining.

Economic analysis: A systemic failure

These problems must be understood not as isolated administrative lapses, but as manifestations of deeper economic failures.

First, this represents a failure in public finance. When resources are allocated inefficiently, the result is not merely financial loss, but the erosion of potential social welfare. The burden of this inefficiency ultimately falls on citizens either through higher tariffs or increased fiscal pressure.

Second, this reflects a regulatory failure. The existence of rules and guidelines is insufficient if they are not effectively implemented. Weak enforcement undermines market discipline and distorts price signals, making it difficult to ensure value for money.

Third, this is a classic principal–agent problem. The public (as the principal) delegates decision-making authority to institutions and officials (agents). However, due to information asymmetry and weak accountability, the incentives of these agents do not always align with the public interest.

Taken together, these failures point clearly to a broader systemic governance breakdown.

These economic failures are also interconnected. Inefficient resource use increases fiscal pressure, which, in turn, affects tariffs and budget stability. At the same time, regulatory weaknesses prevent markets from functioning properly, distorting the cost structure of the energy sector and reducing overall economic competitiveness.

From a political economy perspective, these outcomes persist because incentive structures are misaligned. When good decisions are not rewarded and poor decisions are not penalised, inefficiencies are not corrected; they are reproduced. In such a system, maintaining existing processes often takes precedence over achieving efficient outcomes.

Policy implications: Where is the solution?

The central lesson is clear: the focus of reform must shift from individuals to systems.

Institutional reforms are essential. These include transparent procurement mechanisms, robust audit systems, and independent regulatory bodies capable of enforcing rules effectively.

Equally important is the adoption of evidence-based decision-making, where policies are guided by data, analysis, and measurable outcomes rather than short-term considerations.

At the same time, incentive structures must be realigned. A system in which good decisions do not generate rewards—and poor decisions do not carry consequences—cannot function efficiently in the long term.

However, reform must go beyond formal rules. Effective implementation requires systems that are transparent, traceable, and accountable at every stage, from tendering to contract execution. Proper documentation, open access to data, and clearly defined responsibilities are essential for building trust and credibility.

Importantly, reform is not purely technical; it is also political. Existing power structures and vested interests may resist change. Therefore, sustainable reform requires not only new policies, but also a transformation in governance culture, stronger independent institutions, and increased public scrutiny.

Concluding Remarks

The Auditor General’s report is not merely a record of irregularities; it is a profound warning.

The problem is not “bad decisions”

It is a system that produces them

Assigning blame to individuals will not resolve the issue. Meaningful change requires reforming the underlying incentive structures, regulatory mechanisms, and institutional frameworks that shape decision-making.

Ultimately, this is not just a story about coal.

“It is a test of the quality of economic governance in Sri Lanka”.

More broadly, it demonstrates that economic outcomes are rarely the result of isolated decisions. They are produced by systems. Even well-intentioned policies can fail if the systems that implement them are flawed.

Looking ahead, the challenge is not only to correct past mistakes, but to build systems that prevent their recurrence. This requires strengthening accountability, enhancing transparency, and aligning incentives with the public interest.

Only through such reforms can Sri Lanka ensure that public resources are used efficiently, equitably, and in a manner that supports long-term economic stability.

by Professor Ranjith Bandara