Shortage of medicines likely to exacerbate from Paracetamol to life-saving drugs: SLCPI

by Sanath Nanayakkare

The current shortage of Paracetamol and Panadol in the market could aggravate to a situation where life-saving drugs would not be available to patients in a few months, Sri Lanka Chamber of the Pharmaceutical Industry (SLCPI) warned yesterday.

“This could happen if the US dollar shortage is not properly addressed and a realistic pricing formula for imported medicines is not introduced forthwith by the authorities,” they said.

“At present, the shortage of medicines is about 5%. One might say it is small or unimportant as to be not worth considering. But in 4-6 weeks from now it could increase to about 25%,” they warned.

SLCPI made these comments at a press briefing held at Taj Samudra Colombo.

“We have a fear. We want to update the general public of Sri Lanka on the current situation with regard to medicine imports because what is on the horizons is not good. Delays at the National Medicines Regulatory Authority (NMRA), the unrealistic price mechanism and the dollar crisis are biting our industry. The dollar crisis is common to every industry, but we also have a serious problem as medicine importers. Until last month, we didn’t have a major crisis. But this month and in the last two weeks, the banks have been advised to prioritise allocation of dollars for fuel purchases and it appears that medicine imports have received de-prioritisation on the list of essential imports. If this trend continues, we will have a serious problem in even importing life-saving drugs. At the moment, it is under control. We have to inform the general public of the evolving situation,” Azam Jaward, Vice President, SLCPI said.

“The last price increase on drugs was allowed in August 2021 when the USD was trading at Rs. 194. Now the dollar has incresed to Rs. 203 which is the ‘published rate’ by the Central Bank of Sri Lanka, but unfortunately there is no mechanism to address the current disparity in the exchange rate. We need asustainable pricing mechanism which addresses the exchange rate, freight rate, current global prices, inflation, cost of fuel etc,” they said.

“Our industry is quite energy-driven. Some drugs need to be stored in temperatures between 2- 8 Celsius. Some need -20 Celsius. If we don’t have electricity, we face big issues. We have to run generators and multiple storage facilities. At present, we are managing it. But all of this depends on the availability of fuel. To run a generator for 7-8 hours a day, we need 2,000 litres of diesel per day,” they said.

“The NMRA charges dollars from us to register a product. They adjust it monthly based on the change of the exchange rate. The government has a fee- charging mechanism based on the US dollar. Then why don’t they do the same for drugs that are imported for sale? These are two conflicting policies,” they argued.

“We don’t need a price increase. Just amend the prices relative to the value of the dollar. For this we need an intervention by the Central Bank. If we can obtain a monthly allocation of USD 25-30 million per month, we believe that we can supply essential drugs to the general public without any disruption,” they said.

“We have had discussions with the authorities on these matters and we have submitted these facts for them to consider, but we have not yet achieved any results other than discussions.There is undue delay at the NMRA in granting the re-registration of products which have been available in the market for a considerable period, and new product registrations. With regulatory fees increasing by an average of 11-fold, the service of the regulator is below expectation,” they said.

Some excerpts of the SLCPI press statement are reproduced below.

“Over 85% of pharmaceutical products are imported, and these imports are paid for by US dollars. The current US dollar shortage in the country has increased the difficulty of importing essential medicines. In addition to this, companies have been unable to pay their dues. As a result, suppliers are no longer interested in supplying to Sri Lanka.”

“The situation is further worsened as banks find it difficult to honour the Letters of Credit (LCs) that are opened to import drugs. Banks delay opening the LCs until there are sufficient dollars. This has resulted in shipments being scheduled according to the availability of dollars and not according to the needs of the patients.”

acceptable pricing mechanism as well as immediately ironing out NMRA red tape for registrations are prerequisites for resolving this crisis.”

SLCPI serves as the representative of over 60 members who account for more than 80% of the private pharmaceutical industry, spanning manufacturers, importers, distributors and retailers. These stakeholders supply Sri Lankan patients with 1,200 molecules from 435 manufacturers from across the world.

SLCPI told The Island that banks ask them to purchase dollars from exporters to finance their medicine imports, but when they reach exporters to buy their dollars, they ask Rs. 245 per US dollar which is the price in the gray market. “So, how can we buy dollars from them and import and sell at controlled prices?” they said.