New medicine price formula, a step in the right direction?

Despite having a State Pharmaceutical Corporation in place, certain drugs which were imported were valued at exorbitant rates due to heavy taxes and other costs

The passage of the new pricing formula for imported pharmaceutical drugs in Parliament could be considered a key strategy to address shortages of medicine and to ensure transparency in the provision of medicines to the public. Unregulated costs of medicines have become a burden to the average citizen, who finds it a challenge to allocate a considerable amount of their expenses to purchase medicines. In most instances, patients are inconvenienced due to unpredictable medicine shortages, which force them to purchase medicines from private pharmacies. 
Despite having a State Pharmaceutical Corporation in place, certain drugs which were imported were valued at exorbitant rates due to heavy taxes and other costs. But under the new framework to set a Maximum Retail Price (MRP), medicines cannot be sold at varying prices, and it ensures transparency and fairness based on dosage, form and strength. 
According to the gazette issued on the pricing formula, the MRP of an individual product is determined by the Cost, Insurance, Freight (CIF) value, Supply Chain Total Markup (SCTM) and Duties and Taxes. Explaining further, Health Minister Dr Nalinda Jayatissa told Parliament that the new pricing formula also includes a Maximum Ceiling Price (MCP) which would be determined by using an internationally recognised information portal for identifying the market share by value of different brands or generic versions of a particular medicine; verifying retail prices of the relevant dosage form and strength of a particular medicine from retail pharmacies of different parts of the island and information provided by the State Pharmaceutical Corporation; and using Internal Reference Prices, External Reference Prices and SCTM.
Despite the complexity of the process, it is fair to say that the government has taken a bold step in delivering one of the key promises in its election manifesto, which is to ensure quality and fair pricing of medicines. The government also has a daring task of eliminating corruption and fraud during the import and distribution of medicines. One of the most unforgettable cases in Sri Lanka’s medical history is the distribution of contaminated Prednisolone Acetate eye drops that caused permanent vision loss in many individuals who underwent cataract surgeries at several state-run hospitals. It is rather ironic that the right to healthcare is not recognised as a fundamental right in the existing Sri Lankan Constitution. However, Article 27(14) mentions that the state is obligated to provide access to medical care for all citizens. 
Patients have faced grave injustices when it comes to the availability and purchase of medicines, particularly due to corruption, fraud and malpractices of this nature. There are reported incidents of end-stage cancer patients who have suffered kidney disease as a result of purchasing substandard medicines simply because they couldn’t afford better quality, high-cost medicines. Prices of essential drugs have been changed on numerous occasions, but similarly to fuel price revisions, these decisions haven’t had a significant impact on reducing people’s cost of living. 
However, this decision to bring about a pricing formula to determine the cost of medicines has been challenged by various factions. The National Chamber of Pharmaceutical Manufacturers claim that the new pricing formula which mirrors the Indian system is not suitable for Sri Lanka and that it would impact local production. But according to the National Medicines Regulatory Authority Chairman Dr Amanda Wijewickrama, the new mechanism doesn’t apply to the local market, and he said that the industry is trying to mislead the public. On a similar note, several Opposition MPs who spoke in Parliament following Dr. Jayatissa’s explanation on the new medicine price formula raised concerns about the import of substandard medicine as a result of the new price formula. However, Dr. Jayatissa assured that there won’t be a compromise on the quality of medicines and that the new mechanism would ensure transparency when procuring drugs. 
The government now needs to score on its elaborate manifesto of promises by ticking them one by one. With some of its recent decisions being reversed, one can only be hopeful that the government would proceed with this decision in the best interest of all citizens.

‘Your Thought’ is a space, a right of the readers to support or contradict and discuss the issues highlighted in the editorial and other articles in the editorial and op-ed pages. Designed as the reader’s editorial; our readers can send in their writings, with a word count not exceeding 200, to ‘Your Thought’, Daily Mirror Political Features Desk, No 8, Hunupitiya Cross Road, Colombo 2 or email to [email protected]