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Pharmaceutical supplies: $ 20 m from AIIB aid for arrears payments

25 Sep 2022

  • MOH to pay Rs. 13 b in dues in next two weeks
  • Suppliers delaying release of medicine stocks
The Health Ministry has racked up approximately Rs. 26 billion in arrears owed to pharmaceutical companies, causing some suppliers to delay the release of medicine stocks to the market over fears that pending payments may not be honoured, The Sunday Morning learns. Ministry of Health Secretary Janaka Sri Chandraguptha confirmed that the Government owed the suppliers this amount, adding that the Ministry was planning to pay off bills worth around Rs. 13 billion within the next two weeks, with the funds coming from the Asian Infrastructure Investment Bank (AIIB) and the Treasury. The Ministry is expecting $ 100 million from AIIB, which has agreed to provide the money for the purchase of essential medicines and medical supplies by revising the scope of the Colombo Urban Regeneration Project and the Reduction of Landslide Vulnerability by Mitigation Measures Project funded by the bank. According to Chandraguptha, $ 20 million out of the pledged $ 100 million will be utilised to pay off bills of pharmaceutical companies as some companies are now reluctant to release drug stocks until they receive their due payments. Along with the expected release of Rs. 5 billion by the Treasury next week, the Ministry is planning to settle the entirety of the Rs. 13 billion owed, Chandraguptha said. When asked about foreign funds received to aid the importation of medicines, the Secretary noted that $ 80 billion from AIIB was pending and that several other funds received from the World Bank (WB) and the Asian Development Bank (ADB) would be utilised for orders that were currently being placed, while an amount would be reserved for next year too. Meanwhile, The Sunday Morning learns that Sri Lanka needs at least $ 60 million to import essential medicines for three months. As of now, the WB has agreed to provide $ 10 million for the health sector, while $ 14 million is expected from the ADB. In addition, Japan last week pledged a grant of $ 3.5 million in emergency humanitarian aid to support Sri Lanka. The funds will be channelled through the World Food Programme, the International Red Cross, and UNICEF in order to directly benefit Sri Lankan citizens. – By Maheesha Mudugamuwa  

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