By The Pulseline News Desk
Sri Lanka is moving to impose maximum retail prices (MRPs) on around 90% of imported medicines over the next year, in a major expansion of the country’s pharmaceutical price-control mechanism aimed at curbing price disparities and protecting patients from excessive retail mark-ups.
National Medicines Regulatory Authority (NMRA) Chairman Dr. Ananda Wijewickrama has said the regulator is carrying out brand-specific price determinations covering more than 6,000 registered formulations, as pharmaceutical companies apply for their annual import permits.
The system will not simply assign one price to a medicine based on its generic name. Instead, each registered brand will be assessed separately.
“For example, if we take the medicine called Metformin, I think it is registered under more than 30 brand names. We determine prices for all 30 of these separately,” Wijewickrama has said.
The NMRA expects the mechanism to cover most medicines actively imported into Sri Lanka during a 12-month period.
However, some medicines imported only occasionally for government tenders may fall outside the annual pricing cycle.
Prices to be reviewed as costs change
The move comes as authorities seek to bring greater consistency to medicine prices while accounting for changes in international costs and the exchange rate.
According to the NMRA, price determinations will remain an ongoing process rather than a one-off exercise. Prices can therefore be adjusted to reflect changes in raw material costs and currency movements.
A key element of the mechanism will be scrutiny of the prices declared by importers.
The NMRA intends to benchmark the Cost, Insurance and Freight (CIF) value of imported medicines against retail prices in their countries of manufacture, including major pharmaceutical supply markets such as India and Bangladesh.
The approach is intended to prevent artificially inflated import costs from being passed on to Sri Lankan consumers through higher retail prices.
All approved maximum retail prices are also expected to be published on the NMRA website, allowing consumers to check the permitted price of a particular medicine.
Ending regional price disparities
The regulator says the system will also address differences in medicine prices between parts of the country.
At present, the same pharmaceutical product can be sold at different prices depending on the pharmacy and location.
Wijewickrama has said standardised MRPs would help eliminate such disparities, meaning a patient purchasing the same product in Jaffna, Anuradhapura or Colombo should not face substantially different prices simply because of geography.
For patients who depend on regular medication, even relatively small differences in the price of commonly used medicines can translate into significant additional costs over the course of a year.
The availability question
While price controls are intended to make medicines more affordable, the policy also raises a separate question: what happens if manufacturers or importers decide that the controlled price is no longer commercially viable?
International pharmaceutical companies operate across markets of vastly different sizes, and Sri Lanka represents a relatively small market.
Industry critics have argued that if an MRP is set below the price at which a particular branded medicine can be supplied profitably, a multinational company could choose to reduce or discontinue its supply rather than sell at a loss.
That could create a different challenge for patients — affordability may improve for medicines that remain available, but patients could face fewer choices if certain brands leave the market.
The concern is particularly relevant for branded medicines for which patients or doctors may prefer a particular formulation or manufacturer.
A reduction in branded options could also increase reliance on generic alternatives, although the availability of an approved generic does not necessarily mean it will be viewed by every patient or prescriber as a direct substitute for a particular branded product.
Balancing affordability and availability
The expansion of MRPs therefore places the NMRA in the middle of two competing objectives: keeping medicines affordable while ensuring that pharmaceutical companies continue supplying a sufficiently broad range of products to the Sri Lankan market.
The regulator’s brand-by-brand approach and its intention to periodically review prices are designed to account for changing import costs, exchange rates and international pricing.
The publication of approved MRPs could also give consumers greater transparency when purchasing medicines and provide authorities with a clearer benchmark for identifying excessive pricing.
But the effectiveness of the system will ultimately depend not only on the prices set by the regulator, but also on whether those prices provide enough incentive for manufacturers and importers to maintain uninterrupted supplies.
With more than 6,000 formulations being brought into the pricing process, Sri Lanka is preparing for a significant expansion of pharmaceutical price regulation — one that could reshape both what patients pay at pharmacies and which medicines remain commercially available in the market.
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