It is clear that the pharmaceutical industry is not, by any stretch of the imagination, doing enough to ensure that the poor have access to adequate medical care.
– Paul Farmer-US Educator
Newly appointed Minister of Health Prof. Channa Jayasumana has acknowledged that the country is facing a pharmaceutical shortage and that hospitals are facing difficulties treating patients due to this. He made this statement while speaking in Parliament on April 19. “Yes I agree there is a shortage of medicine in the country right now. But we are taking measures to resolve this issue immediately. But I can assure that there have not been any deaths because of this,” said Prof. Jayasumana.
He further went on to state that out of 646 life-saving essential drugs, 37 are currently out of stock and the Government has taken measures to immediately bring down these drugs. Additionally, Prof. Jayasumana mentioned that out of 486 non-essential drugs, 45 drugs are currently out of stock and will be available soon and out of 8,442 other medications, 1,142 have been ordered and will be available in the coming days.
Health crisis
A health sector trade union affirmed that Sri Lanka’s State-run hospitals are running out of essential medicine and medical equipment while the shortage threatens a major health crisis due to a possible medicine supply chain collapse. Sri Lanka imports 80 per cent of its medicines, but a severe shortage of dollars due to the ongoing economic crisis has led to a shortage of essential drugs and importers are struggling to meet the demand in the country. The Ministry of Health is also facing difficulties in importing the necessary medicine creating a drug shortage in state-run hospitals and pharmacies, forcing hospitals to limit the medications for only for immediate and essential cases.
Indika Rathanayaka, the North Western Convener of the Government Medical Officers Association (GMOA), a doctors’ trade union, told reporters on April 6 that the stocks in most hospitals will last only two weeks. “We saw this problem a month ago. Within another month if this does not get solved, we are going for a health crisis in the country as well,” Rathanayaka said.
Due to the shortage of gas and fuel, the Government has allocated the remaining dollars to obtain fuel, resulting in commercial banks declining the requests of medicine importers to open Letters of Credit (LCs) to import drugs. India has granted a US$ 1 billion Credit Line including US$ 200 million for essential medicine from Indian suppliers, Sri Lankan Government officials have said.
Tenders have been called from the Indian suppliers by the State Pharmaceutical Corporation (SPC) to obtain a list of essential medical supplies given by the Medical Supply Division (MSD) of the Ministry of Health, officials say. The Indian Credit Line only allows the Government to purchase medicine and leaves private medicine suppliers to struggle to import essential drugs. An industry representative said that the private sector drug supply to the market has fallen more than 30 per cent due to the dollar shortage.
“The banks do not entertain any LC applications and ask for credit for up to 180 days for both LCs and documents against acceptance documents.” In the absence of any forward booking mechanism, who knows what the rupee will be against the US$ in 180 days? How do you cost your shipments?” Over 50 percent depreciation of the rupee also has weighed on the drug imports now as the drug prices have risen nearly 30 per cent since the Central Bank of Sri Lanka allowed depreciation. A health official said the Treasury released Rs. 65 billion to buy medicine and medical equipment, but the Government needs further Rs.15 billion to manage the price escalation after rupee’s fall. The Ministry has requested the World Health Organisation (WHO) and other international health organisations to support in obtaining essential drugs for the country,” Saman Rathnayaka, the Secretary to the State Minister said.
The current shortage of Paracetamol brands in the market could aggravate to a situation where life-saving drugs would not be available to patients in a few months, the Sri Lanka Chamber of the Pharmaceutical Industry (SLCPI) has warned. “This could happen if the US dollar shortage is not properly addressed and a realistic pricing formula for imported medicines is not introduced forthwith by the authorities,” they said. At present, the shortage of medicines is about 5 per cent. One might say it is small or unimportant as to be not worth considering. But in 4-6 weeks from now it could increase to about 25 per cent,” they warned. The SLCPI made these comments at a press briefing held in Colombo.
Medicine importers
“The dollar crisis is common to every industry, but we also have a serious problem as medicine importers. Until last month, we did not have a major crisis. But this month and in the last two weeks, the banks have been advised to prioritise allocation of dollars for fuel purchases and it appears that medicine imports have received de-prioritisation on the list of essential imports. If this trend continues, we will have a serious problem in importing even the life-saving drugs. At the moment, it is under control. We have to inform the general public of the evolving situation,” Azam Jaward, Vice President, SLCPI said.
“Our industry is quite energy-driven. Some drugs need to be stored in temperatures between 2- 8 Celsius. Some need -20 Celsius. If we don’t have electricity, we face big issues. We have to run generators and multiple storage facilities. At present, we are managing it. But all of this depends on the availability of fuel. To run a generator for 7-8 hours a day, we need 2,000 litres of diesel per day,” they said.
“The NMRA charges dollars from us to register a product. They adjust it monthly based on the change of the exchange rate. The Government has a fee-charging mechanism based on the US Dollar. Then why don’t they do the same for drugs that are imported for sale? These are two conflicting policies,” they argued.
“We don’t need a price increase. Just amend the prices relative to the value of the dollar. For this we need an intervention by the CBSL. If we can obtain a monthly allocation of US$ 25-30 million per month, we believe that we can supply essential drugs to the public without any disruption,” they said.
Some excerpts of the SLCPI press statement are reproduced below.
“The situation is further worsened as banks find it difficult to honour the LCs that are opened to import drugs. Banks delay opening the LCs until there are sufficient dollars. This has resulted in shipments being scheduled according to the availability of dollars and not according to the needs of the patients.”
In conclusion, SLCPI serves as the representative of over 60 members who account for more than 80 per cent of the private pharmaceutical industry, spanning manufacturers, importers, distributors and retailers. These stakeholders supply Sri Lankan patients with 1,200 molecules from 435 manufacturers from across the world. As the Government is handling the matter with care under new Finance Minister Ali Sabry, PC, this problem would indeed be solved expeditiously.
The writer is an Attorney-at-Law with LLB, LLM, M.Phil.
