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Demand for Pharmaceuticals in Sri Lanka

A growing and aging population will boost demand for pharmaceuticals. According to the UN Population Division, the number of people living in Sri Lanka will increase from 18.85mn in 2000 to 22.58mn in 2022 – a rise of nearly 20%. The percentage of the population over 65 years of age will jump from 9.4% in 2000 to 16.0% in 2020, which means that investment in healthcare facilities and treatment will be necessary.

The government’s 2014 budget, outlined in November 2013, allocated as much as LKR2,000mn ($15mn) to tackle non-communicable diseases under a three-year plan focusing on improvements in infrastructure, this is more than double the LKR900mn that was earmarked in the 2011 budget when Mahinda Rajapaksa was sworn in for his second presidential term. The new budget allocated a total of LKR74.1bn ($562.4mn) to both healthcare and education spending, up from LKR46.1bn ($350.3mn) in the 2012 budget, although the authorities did not provide separate figures for the two sectors.

The State Pharmaceuticals Corporation (SPC) is the sole importer of medicinal drugs for the state sector and also imports a significant proportion of drugs for the private sector. Pharmaceuticals are purchased on a system of worldwide tenders, restricted quotations or monopoly quotations. Drugs imported for the state sector are distributed through the government’s Medical Supplies Division whereas those imported for the private sector are sold at SPC retail outlets (Rajya Osusalas), Franchise Osu Salas and other private pharmacies.

A ‘Rajya Osusala’ outlet

Government (MSD) purchase of hospital supplies through Medical Supplies
The Medical supplies division (MSD) is managed directly by the Line Ministry who is responsible for ensuring timely and smooth distribution of drugs and selected medical supplies. Though the Sri Lankan health system is decentralized, the countrywide requirement of drugs and medical supplies are purchased centrally by the MSD through the State Pharmaceutical Corporation (SPC). Depending on the demand and estimated requirements (provided by all provinces), the quarterly requirement is distributed to 26 Regional Medical Drug Stores (RMDS) located in 26 health districts.
According to the Ministry of Health budget, the funds allocated to purchase medicine/devices for MSD have risen from LKR16.7bn ($127mn) in 2012 to LKR31bn ($237mn) in 2014. MSD would retain ~25% of the allocated budget for emergency purchase in case of shortages. MSD distributes nearly 1000 varieties of essential drugs to government hospitals and dispensaries. Health ministry Budget allocation to purchase drugs was LKR28bn in 2013 for SPC and SPMC.

The drug regulatory authority of Sri Lanka is the Cosmetics, Devices, and Drug regulatory authority (CDDA) and there are no state controlled regulatory agencies. CDDA intends to provide a legislative framework to control the use of pharmaceutical drugs with respect to its Registration, Manufacture, importation, Sale (wholesale and retail), Labeling, Transportation, Advertising, Distribution of samples, Testing (through NDQAL) and Disposal of expired /outdated products. Local GMP compliance certificate is required to start manufacturing for the domestic market while WHO cGMP is required for export. For importer/ foreign suppliers – need to submit stability data of the real time; however, in the case of local manufacturers, six months stability data (accelerated) is required. ICH guidelines are well in place. The registered products will have an initial one-year provisional license followed by 5 years validity which can be renewed. All local pharmaceutical manufacturing facilities are inspected at least once in every two years to assess the compliance with GMP. Currently, foreign manufacturers are only required to provide an attestation by the competent authority of that country that a given product has been manufactured on its premises and has used operating practices that conform to GMP.


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