Pharma Chamber calls for viable pricing mechanism as rupee continues to slide

The Sri Lanka Chamber of Pharmaceutical Industry (SLCPI) yesterday called on the health minister and National Medicines Regulatory Authority (NMRA) for a viable pricing mechanism for the country’s pharma industry, amid the depreciation of the rupee against the US dollar.  

The industry chamber said about 85 percent of all pharmaceuticals are imported and hugely impacted by the rupee depreciation.  

“Today, the Sri Lankan rupee stands in a historically weak position against the dollar and the impact of this massive and unprecedented depreciation is clearly being witnessed across almost every facet of the economy. While some sectors are able to freely adjust and others like the transport industry, which are regulated but still allowed to adjust fares based on substantial increases in cost, there is not a glimmer of hope for the pharmaceutical industry. 

While the Sri Lankan rupee is significantly devaluing, the industry had to face a further price control of 15 molecules, where importers have to absorb the loss on the imported inventory. The absence of a viable pricing mechanism has forced different stakeholders of the industry—importers, manufacturers and retailers—to absorb huge exchange losses,” the SLCPI said in 
a statement.

The industry chamber reminded the authorities that since March 2014, when all pharmaceutical products were gazetted as essential items, the prices of most drugs have remained unchanged, despite the devaluation of the rupee from Rs.130 to the current Rs.167 against the US dollar. 
The SLCPI also noted that the price ceiling on 48 drugs in 2016 was regardless of any currency fluctuation and the prices of medicinal drugs were not adjusted then, with the pharma industry expecting a viable long-term pricing mechanism as envisaged in the NMRA Act. 

The SLCPI said the recent 30 percent price reduction on further 15 drugs by the Health Ministry, amid the rupee depreciating at an alarming rate, has posed several new challenges for the industry to maintain its long-term sustainability. 

“In this context, withdrawing certain drugs from the local market has become an economic imperative,” the SLCPI statement said.  

“However, in the current situation, all reasonable parties can see that these dynamics are totally unsustainable. Hence, we urge the authorities to re-evaluate the current pricing mechanisms on a very urgent basis,” SLCPI President Shyam Sathasivam stated.