3 March 2022 04:05 am Views - 2114
By Nishel Fernando
With the pharmaceutical stocks rapidly diminishing, the Sri Lanka Chamber of Pharmaceutical Industry (SLCPI) yesterday warned of a looming shortage of critical life-saving medicines in the market within the next two to six weeks, due to the worsening foreign exchange crisis and in the absence of a fair pricing formula for pharmaceutical products.
Addressing a media at an event held in Colombo yesterday, SLCPI President Sanjiva Wijesekera outlined the crisis faced by the country’s pharmaceutical importers on multiple fronts.
“We currently face a short supply of about 5 percent of pharmaceuticals, as informed by our retailers. Although we are not in a major crisis right at the moment, what’s unfolding is not good. Banks have stopped opening letters of credit facilitates for pharmaceutical imports, as the government has instructed banks to prioritise financing of fuel imports. Banks are saying that they don’t have enough forex to open letters of credit facilitates for us. If we are unable to import pharmaceuticals, I’m afraid we would run out of our stocks within two to six weeks,” Wijesekera elaborated.
In addition to the shortage of popular painkiller, paracetamol, the SLCPI officials noted that there are reports of short supply of high blood-pressure medicines, diabetes medicines and certain antibiotics. The SLCPI estimates the monthly forex requirement to import essential pharmaceutical at US $ 25-30 million.
Although the SLCPI has held discussions with the Central Bank (CB) to secure the required forex for pharmaceutical imports, Wijesekera said the pharmaceutical importers are yet to receive any assistance from the CB. Although the pharmaceutical importers could import pharmaceuticals by sourcing their own forex outside of the banking system, the chamber pointed out that they are unable to do so due to the price controls in place, which don’t take into account the real exchange rate of the rupee.
As the exchange rate of the rupee has gone up to Rs.260 against the US dollar, despite the Central Bank artificially maintaining it at Rs.200 levels, former SLCPI President Adrian Basnayake stressed that the current pricing control on pharmaceuticals need to be revised to reflect their real cost.
“We don’t generate sufficient profits to cover these exchange losses. So, how can we continue to import pharmaceuticals by purchasing forex from the grey markets?” he asked. In addition, Wijesekera noted that the pharmaceutical costs have been increasing on a global scale due to high cost of raw materials, packaging costs and rising logistics costs. Therefore, he urged the government to come up with a fair pricing formula for pharmaceuticals. Meanwhile, Basnayake warned that the country could run out of critical life-saving drugs within a matter of weeks, as distributors, retailers and consumers have started stockpiling them the worst. “We have seen unusual sales over past couple of months. Although we should be happy about it, the reality is that our stocks are depleting rapidly because patients, who have the knowledge of the looming crisis, have been purchasing pharmaceutical stocks for next two to three months and holding on to them. It’s happening at the level of distributors as well as retailers. We are so worried because we know where we are headed now, as we can’t open letters of credit to import pharmaceuticals anymore,” he elaborated.
Meanwhile, with the collapse of the National Medicines Regulatory Authority’s (NMRA) e-registration system, the pharmaceutical importers are now required to manually submit their applications for registration of pharmaceuticals. The SLCPI officials noted that this has created a large backlog at the NMRA, further causing delays in importing critical pharmaceuticals.
Further, if the looming crisis is not addressed in a timely manner, the employment of over 60,000 employed in the pharmaceutical trade could also be in jeopardy, the SLCPI warned. Meanwhile, the SLCPI views that the proposed US $ 1 billion credit line from India, which is expected to partially finance pharmaceutical imports, would only be sufficient to meet the pharmaceutical requirement of the state sector. “The well-being of our patients is our priority.
During the pandemic, we demonstrated this by ensuring continuous supplies in trying circumstances. We are prepared to work with the government and engage with the relevant stakeholders to secure Sri Lanka’s immediate requirements of medicines and prevent medicine shortages. However, solutions to dollar shortages and more importantly, an acceptable pricing mechanism as well as immediately ironing out the NMRA red tape for registrations are prerequisites,” the SLCPI stressed.