The pharmaceutical industry in Sri Lanka is in its developing stage and is expected to have a better tomorrow, with self-sufficient domestic production and quality drugs. The government of Sri Lanka has drawn initiatives to make the dream come true, it seems.

In order to build up a healthy pharmaceutical sector to fulfill the domestic requirements, the government of Sri Lanka has recently announced additional benefits to the domestic pharmaceutical industry. The government is also initiating efforts to enforce a strict, level-headed drug policy in the country.

As a preliminary step, a special discussion held between the Minister of Industry and Minister of health in the last month has mooted the issues and major problems encountered by the local pharmaceutical manufacturers. The government assured more support to the domestic pharma manufacturers to strengthen the industry.

In the beginning of September 2007, the Sri Lankan government has decided to issue concessions on Value Added Tax and other taxes to uplift local industries. According to the Minister of Industrial Development and Welfare Ranaviru Kumara Welgama, the tax concessions to industrialists provide opportunity to import machinery and equipment.

The government has recently identified that local manufacturers only contribute 10 per cent of the total demand of pharmaceutical items in the country. At present there are 8 manufacturers engaged in the formulation of tablets, liquid, capsules etc with imported ingredients and supplying about 100 locally manufactured drugs to the market.

In July 2007, the Cabinet has granted its approval to waive the duty on finished products and packaging material in order to provide a level playing field for both manufacturers and importers and pass the benefits to the consumers.

Also, an advisory committee representing public and private sector pharmaceutical companies has prepared a five-year development plan to increase the local market production to 30 per cent within the next five years. According to reports, local manufacturers will obtain priority for 20 per cent of local products. The committee also suggested tax exemption for a limited amount of medicines and packaging raw materials and pricing based on an agreement between the local manufacturers and medical supply divisions.

Import scenario
Earlier in 2005, the government had spent Rs 15.5 billion for importing selected medicines from international market to supply through its two drug firms - the State Pharmaceutical Corporation (SPC) and State Pharmaceutical Manufacturing Corporation (SPMC).

The measures to support the pharmaceutical industry is viewed as very important for the country, which depends international suppliers for 90 per cent of its drug needs out of an overall market of nearly US $1 billion.

Currently, around 7400 brands of drugs are being imported to the country, mainly from Switzerland, UK, US, Australia, Germany, India and Malaysia, while the Sate Pharmaceutical Manufacturing Corporation (SPMC) produces about 216 drugs locally.

By the first half of current year, the Sri Lankan authority has finalised an agreement with the government of Thailand to import vaccines on a government-to-government basis.

At phase I, Sri Lanka will buy 500,000 doses of encephalitis vaccine annually from Thailand for the next four years. Snake antivenom, rabies vaccine, antiviral drug and bird flu drug - Oseltamivir are other pharmaceutical products Sri Lanka will be interested to buy from Thailand in future, informed officials.
The pharma exports from India to Sri Lanka have increased 29.16 per cent during April 2006 to February 2007. India has gained a business of Rs 345.84 crore during this period, as against Rs 267.77 crore in the same period of the previous year.

The Sri Lankan government is handling the medicine manufacturing and supply through its two arms, SPMC and SPC. SPMC, which handles the manufacturing process for the government, has a 50, 000 square feet pharmaceuticals manufacturing facility.

SPC, which commenced operations in 1971, also act as a drug manufacturer and drug supplier for the government.

Drug Policy
As part of its effort to improve the quality of pharmaceutical products in the country and to regulate the drug sector, the government is planning to implement a new national drug policy soon. The policy, being drafted by National Drug Authority is expected to implement within next year, it is learnt.

The policy is expected to offer quality drugs for the patients at an affordable price.