- Cites increased electricity and transport costs
The Sri Lanka Chamber of the Pharmaceutical Industry (SLCPI) has urged the Government to review pharmaceutical prices in a month, taking into consideration the unexpected exchange rate fluctuations in the market at present, The Sunday Morning learns.
Speaking to The Sunday Morning, SLCPI President Sanjiva Wijesekera said the industry was operating at a loss and the sudden increase of the exchange rate and the reduction of prices by 16% would aggravate the issues faced by the industry.
He stressed that the industry would not be able to survive with a 16% price cut if the exchange rate went up further.
When asked whether a sudden increase of the exchange rate would negatively affect the industry, Wijesekera said: “It’s definitely going to affect the industry. There will be losses. The parity rate for us after the reduction is Rs. 295. The previous increase given in April 2022 took the parity rate to Rs. 352.19.
“When calculating this, we have taken into consideration the exchange rate parity and the price increase given to the industry since the price control came into effect in 2016. When 16% is deducted, the parity rate becomes Rs. 295.”
Wijesekera explained that when the industry met the Health Minister and discussed the prices, the parity was below Rs. 295 and the industry was under the impression that it would drop further.
“But later on the Government lifted the temporary ban on certain items, including electronic items. With that, we believe the companies would have opened Letters of Credit (LCs). Suddenly the dollar went up to around Rs. 335 two days ago and, as a result, the industry is incurring a loss between Rs. 295-319,” he stressed.
Wijesekera noted that the losses that they had calculated to be between Rs. 295-319 were only the losses calculated based on parity, but there were several other things that needed to be taken into consideration when calculating the prices, such as energy.
“Our industry is heavily dependent on energy. We have to run cold chambers and freezer trucks as well as spend on transportation. Even at the discussion, we told the Minister to give us a formula so that we can adjust accordingly,” he stressed.
Wijesekera reiterated that the prices should be reviewed in a month as the industry would not be able to survive beyond that. “Since the prices were revised recently, it cannot be revised again in a week’s time. We can hold on for a month but not beyond that,” Wijesekera added.
A new gazette was issued by the Health Ministry last week revising the Maximum Retail Prices (MRPs) of 60 types of medicines, including paracetamol.
According to the gazette issued yesterday (17), the prices of the medicines have been reduced by 16% with effect from 26 June.
The gazette states a manufacturer or importer who sells any scheduled medicine specified in the Schedule to the Medicines (Ceiling on Prices) Regulations of 2019 (last amended in 2022) shall not sell such medicine at a price more than the MRP specified in the schedule to these regulations.
A manufacturer or importer who sells any scheduled medicine at a revised retail price which is less than the MRP specified in the Schedule to the Medicines (Ceiling on Prices) Regulations of 2019 shall reduce proportionately such revised retail price by a total 16%, as stated in the gazette.
As a result of exchange rate fluctuations, the prices of all medicines have been revised thrice since 2021, by 9%, 29%, and 40% respectively.
In 2021, medicinal drug prices were increased by 9%. Again in 2022, local pharmaceutical prices were revised twice to meet the gap caused by the drastic devaluation of the rupee in 2021. In March 2022, the prices of 60 essential drugs were raised by 29% via an extraordinary gazette notification.
Attempts to contact the Minister of Health and the Health Ministry Secretary regarding the request made by the SLCPI and the possibility of a further price reduction for pharmaceuticals failed.