Local pharma manufacturers seek price revisions as Middle East conflict drives up costs

Sri Lanka’s pharmaceutical manufacturers have warned the government that the surging global input costs, supply chain disruptions and the sharp depreciation of the rupee are threatening the commercial sustainability of the local medicine production, raising concerns over the uninterrupted supply of essential drugs.
In a letter sent to the government this week, the Sri Lanka Pharmaceutical Manufacturers’ Association (SLPMA), which represents 25 local pharmaceutical manufacturers, said the ongoing conflict in the Middle East has sharply increased the cost of key raw materials and logistics, placing severe pressure on the domestic manufacturers already grappling with operational challenges.
The industry body cautioned that without timely price adjustments, the manufacturers could struggle to maintain supplies to both the state-run Medical Supplies Division (MSD) and private market.
“The present global situation is creating significant disruptions to the pharmaceutical supply chains, which are expected to have a substantial impact on the availability and cost of key inputs required for the local pharmaceutical manufacturing,” the SLPMA said.
The association noted that the prices of Active Pharmaceutical Ingredients, excipients and packaging materials had risen sharply in the recent months, while the logistics and insurance costs had increased nearly three to four times from the previous levels.
The manufacturers also pointed to operational difficulties stemming from the domestic fuel constraints, saying the companies were incurring additional transportation costs to ensure staff attendance and uninterrupted factory operations.
Moreover, the SLPMA said the Sri Lankan rupee had depreciated by more than 10 percent against the US dollar since the last Pricing Committee meeting, further intensifying the cost pressures for the manufacturers dependent on the imported raw materials.
“Under the prevailing circumstances, the currently approved prices are no longer commercially sustainable,” the association said, warning that prolonged cost pressures without revisions could affect the availability of essential medicines within the healthcare system.
The pharmaceutical manufacturers said they had continued to support the government through periods of crisis, including the COVID-19 pandemic and recent economic downturn, by ensuring uninterrupted medicine supplies to the MSD and private sector.