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Forex crisis: Severe pharmaceuticals shortage in the offing

09 Jan 2022

By Maheesha Mudugamuwa An acute shortage of essential medicinal drugs has been reported around the country as pharmaceutical companies are struggling to secure necessary imports due to the ongoing dollar crisis. The Sunday Morning learns that both Government and private sectors have been affected and are expecting a severe shortage of essential medicines in a month’s time unless the Government prioritises the pharmaceutical sector and releases funds to pay for Letters of Credit (LCs) already opened by importers. Accordingly, it is learnt that a request has been made to the Treasury as well as the Central Bank of Sri Lanka (CBSL) and Foreign Ministry to make funds available immediately. State Pharmaceutical Corporation (SPC) General Manager Dinusha Dassanayake said the dollar crisis had affected pharmaceutical imports as it had affected all other sectors and SPC was also experiencing a shortage. Therefore, it had already informed the Health Ministry’s Medical Supplies Division (MSD) and necessary arrangements would be made by them, Dassanayake noted. Prior to the shortage reported recently, prices of all pharmaceuticals were increased to reflect the falling rupee. Health Minister Keheliya Rambukwella issuing an extraordinary gazette notification last August amended the Medicines (Ceiling on Prices) Regulations of 2019 published in the Gazette Extraordinary No.2123/35 of 15 May 2019 by increasing the Maximum Retail Prices (MRP) of 60 essential medicines, 38 intraocular lenses/lenses with delivery system (preloaded provided with cartridge) by amending the Medical Devices Pricing Regulations No. 1 of 2017 published in the Gazette Extraordinary No.2006/45 of 17 February 2017 as amended by regulations published in the Gazette Extraordinary No.2114/54 of 15 March 2019. Further, the MRP of two selected medical devices including blood glucose monitoring system and test strips for blood glucose monitoring system have also been revised by amending the Medical Devices (Pricing) Regulations of 2018 published in the Gazette Extraordinary No. 2086/37 of 31 August 2018 as amended by regulations published in the Gazette Extraordinary No. 2114/54 of 15 March 2020. The last price revision was made in May 2019 when the exchange rate was at Rs. 178 per United States Dollar (USD). But, as claimed by pharmacists, consumers are facing difficulties as they cannot find some common medicines in the market. “Several medicines are in short supply. Some of the most essential medicines are out of stock. We were not given an exact date on when they will be restocked,” All Ceylon Private Pharmacy Owners’ Association (ACPPOA) President Chandika Gankanda told The Sunday Morning. “If this continues, most items will be in short supply.” According to available data, in 2017, pharmaceutical expenditure in Sri Lanka (hospital and pharmacy medicine sales at consumer prices) reached a value of $ 642 million and by 2022, the market is expected to reach a value of $ 787 million. Sri Lanka imports medicines worth Rs. 130 billion annually, comprising some 85% of its annual requirement. Local State and private sectors produce only 15% of the requirement. The State Pharmaceuticals Manufacturing Corporation (SPMC) owns a plant in Ratmalana and along with several private pharmaceutical manufacturing factories produces medicines required for the country. Sri Lanka Chamber of Pharmaceutical Industry (SLCPI) President Sanjeewa Wijesekera said: “There is a dollar crisis and we are also in difficulty when establishing LCs. There could be a delay in shipments as we are unable to establish LCs.” "Previously, priority was given to oil and pharmaceuticals and our industry has facilities with the two State banks. Unfortunately I feel like they have been assigned to establish LCs for petroleum importation. We were asked wherever possible to channel public banks to establish LCs,” he noted. “In the private sector there isn’t much of a shortage. If this continues there could be a shortage,” Wijesekera added. Generally, about 14 days to one month’s stocks are available with retailers, so importers carry about one- or two-and-a-half months’ worth of stocks. There should be an ongoing process of establishing LCs and getting stocks and any lag would become an issue later, he explained. State Ministry of Production, Supply, and Regulation of Pharmaceuticals Secretary Dr. R.M.S.K. Ratnayake said a discussion had been held with stakeholders on Thursday (6) and they had decided to send a list of essentials with shortage timings to the Finance Ministry to prioritise accordingly. “We have prepared a list with the dates from which the respective stocks of the medicines will be in short supply and the Government will release funds accordingly.” Meanwhile, Rambukwella said the Government was looking at all possible methods to secure stocks and maintain uninterrupted supplies. “We have held discussions with stakeholders and informed the CBSL too; necessary arrangements will be made to release funds to import essential medicines.” When asked how long it would take to recover from the ongoing crisis, Minister Ramkuwella said at present dollars had started to come in through tourism and foreign employment. “We hope the ongoing crisis will end in six months to a year. The Government is focusing on diversifying methods of bringing down dollars, including by expanding the foreign employment sector.”  


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