Overpriced drug purchases, unrecovered supplier payments raise concerns

By Sheain Fernandopulle

An audit report has revealed major financial lapses at the State Pharmaceuticals Corporation (SPC), including losses from overpriced medicine purchases and failure to recover money from suppliers.

The report says that when 13 types of medicines were bought for SPC pharmacies, the Central Purchasing Unit (CPU) had paid prices 12% to 425% higher than what the main SPC division paid. This caused an extra cost of Rs. 10.2 million.

In response, the SPC stated that medicines are procured from the local market through the CPU Division, while a limited quantity of medicines must occasionally be obtained from this division to prevent shortages within the pharmacy network. “Failure to do so could result in a collapse of the Corporation’s sales and the loss of consumers from the pharmacy network,” the SPC added.

Meanwhile, the audit also found that by December 31, 2024, SPC had issued debit notes worth Rs. 5,573.64 million to recover money from suppliers who supplied damaged or low-quality drugs. But by March 31, 2025, about Rs. 2,996.65 million had still not been recovered.

Out of this, Rs. 1,651.98 million is owed by blacklisted suppliers, and another Rs. 279.45 million is pending from suppliers who have already received final reminders.

In response, the Corporation said that it has already received Rs. 100 million. In addition to this amount, debit notes have been issued to recover funds related to the importation and distribution of items to the Medical Supplies Division. The Corporation further noted that settlement documents pertaining to the total amount of Rs. 38.21 million receivable from these debit notes should be provided by the Medical Supplies Division.

However, the audit warns that recovering these amounts remains uncertain owing to the weak financial controls within the SPC.

Continuous attempts to contact a senior official at the SPC failed.