ECONOMYNEXT – Sri Lanka will speed up applications to register more suppliers, boosting competition, ending slow registration of drugs, Health Minister Nalinda Jayatissa said.
There has been a backlog of files, which were not cleared in time by the National Medical Regulation Authority, which was reducing competition.
“There was a problem regarding the registration of suppliers,” Minister Jayatissa said. “There were processes to speed up registration of some supplier and delay the registration of others inside these institutions.
“We are taking steps to correct this.
“At the moment in the registration process only about 450 files are remaining at the NMRA. There were 2,500, which we have reduced.”
When fewer suppliers are registered for a particular drug, competition is reduced. In some cases there was only one supplier for a drug, Minister Jayatissa said.
“We will register more suppliers,” he said. “That is how we can do justice by the people. We have gone beyond words and taken action. We will be able to see the results soon.
“So we invite more supplier to come and register. If there are problems, discuss with us.”
The NMRA was set up by the so-called Yahapalana administration, setting up a new agency for price controls and triggering a craze for price controls in the name of price regulation.
Under cost-based price regulation no company has to improve productivity as ‘costs’ are shown to bureaucrats to justify price rises.
As early as 2015 analysts warned that the NMRA’s practice of reducing registrations would lead to reduced competition and higher prices.
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“According to a media conference given by some medical practitioners accompanied by Health Minister Rajitha Senaratne, they wanted to limit the number of different makes of drugs that were available,” EN’s Economic column commented in November 2015.
“Not only that they wanted to reduce the number of registered companies that could bid for hospital tenders for drugs.
“Was this just for the hell of it? Or were they bribed by pharmaceutical companies to restrict supply and drive up process by creating oligopolies. No, apparently it was too much trouble for them to approve a large number of drugs.
“In their convoluted reasoning – whatever that is – these doctors and bureaucrats thought that a wider and freer supply drove prices up. They seem to have no idea at all that the opposite was true in reality.
“If the number of drugs are reduced, the supply of drugs will be reduced and there will be upward pressure on prices.
“If suppliers are reduced, the newly created National Medicinal Drugs Regulatory Authority will then have a reason for existence – to control prices it has driven by its own torpedo aimed at an existing much freer market.
“There are already reports that the NMRA has begun to harass the company that delivers the life-saving drug to your neighbourhood pharmacy.
“When the NMRA delays approvals and sends the pharmaceutical company officials from pillar to post and mistreats and humiliates them as media reports are now saying they are doing, that agency is hurting you the sick person by driving up the cost of drug supply.”
The NMRA also ended up in several controversies and allegations of corruption, which went beyond reducing competition.
There were allegations of deleted files and data.
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The NMRA also coincided with the promotion of generic drugs, which later led to deaths of patients, due to either contaminated drugs or those with little or no efficacy.
Generic drug makers are under no obligation to conduct clinical trial and prove their efficacy, either in Sri Lanka or elsewhere.
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