Shortage of essential medicines and price controls on drugs

Sri Lanka’s economy has made commendable progress from the depths of the harrowing crisis it endured in mid-2022, and the scarcity of essential items the citizens were experiencing has more or less been fully resolved. Yet, the agony associated with the deficiency of critical medicines has been continuing for a prolonged period of time. The short supply has affected a wide range of vital drugs, including those for cancer, diabetes, epilepsy, and psychiatric illnesses.

The public healthcare system has gone into peril as government hospitals and dispensaries have run out of vital medical prescriptions, causing an enormous amount of distress towards the helpless and impoverished communities as they rely heavily on the cherished taxpayer-funded healthcare system of the country. To compound the matters worse, some of the most sought-after prescriptions are not available even in private pharmacies. An investigation carried out by the Daily Mirror last month found that key drugs were not available among a number of private pharmacies across Colombo.

The absence of critical medicine was a prominent issue which was exploited by the NPP and SJB politicians at the election campaign of the last presidential election. Experts have attributed the crisis situation to poor forecasting, inadequate planning, as well as monopolies created by preferential drug registration practices. Delays associated with the lengthy and cumbersome procedures of the government’s procurement systems have contributed in no small measure towards the unfortunate predicament. Meanwhile, the Government Medical Officers’ Association had emphasised the urgent need for a systematic approach to address the national supply of medicine. The prominent association of medical practitioners had highlighted the importance of streamlining procurement, improving transparency, and ensuring effective coordination among stakeholders to prevent supply disruptions. The practice of the pharmaceutical global supply chain prioritising larger and wealthier nations has left smaller and relatively impoverished countries like Sri Lanka helpless.

Another issue which requires attention with regard to the problematic state of affairs is the system of price controls on drugs. The National Medicines Regulatory Authority (NMRA) maintains Maximum Retail Price (MRP) levels to control the prices of drugs and the price limits are generally reviewed once every six months. The NMRA was established in 2015 by the Sirisena-Wickremesinghe coalition and the then controversial Health Minister Rajitha Senarathne was a passionate advocate of the price controls. Through the price controls, the pharmaceutical regulator intends to make medicines more affordable and accessible to the public, particularly for those with chronic illnesses or limited financial resources. However, at times, the rigidity of price controls has been responsible for medicines becoming scarce in the market. On certain occasions, the NMRA has demonstrated a reluctance to revise the MRPs to accommodate the increases in sourcing costs of suppliers. In such instances, the supply of medicines at the stipulated prices becomes financially unviable, particularly whenever there is a rapid decline in the value of the local currency. As a result, drugs disappear from the market as the price levels imposed by the regulator do not reflect the actual cost of importing.

Some have also lamented that due to price controls, the islanders have been denied the opportunity of purchasing premium medicines that were developed by pharmaceutical companies in North America and Europe. Hence, the pharmaceutical market of Sri Lanka is dominated by low-price drugs from countries in South Asia, thereby restricting the freedom of choice of consumers, which is considered as a fundamental tenet of a free market economy. Perhaps, a more relaxed MRP regime by the NMRA would increase pharmaceutical imports from the US, which would appease the White House which is grumbling about Sri Lanka’s trade surplus with America.

Given the gravity of the issue, a holistic and systematic approach, including reviewing the price controls of the NMRA, with inputs from both the private and public sector stakeholders is required to provide a lasting solution to the shortage of essential medicines in the country.