Further discussions need to be held with all concerned parties to move forward with pharmaceutical buyback agreements, according to Health Minister Keheliya Rambukwella.

Speaking to The Sunday Morning, he said that buyback agreements had already been in place and during previous Minister Pavithra Wanniarachchi’s time, there had been one or two agreements.

“We need to honour them as those were Cabinet decisions, but we need to talk with all parties concerned and come to a consensus and move forward. There are concerns from local manufacturers as well,” the Minister said.

The buyback agreements were first introduced in then President and former Prime Minister Mahinda Rajapaksa’s 2010 election manifesto ‘Mahinda Chintana – Vision for the Future’ in order to increase local pharmaceutical drug manufacturing and encourage more investments into the sector.

In 2014, the then Cabinet of Ministers delivered on the President’s promise by approving a proposal to enter into five-year buyback agreements with local manufacturers. 

Despite Cabinet approval being received in 2014, the agreements were only entered into in 2015 by the then Government led by then President Maithripala Sirisena.

The buyback agreements were signed with 11 pharmaceutical manufacturing companies and in 2017 these agreements were extended by a further five years.

It was reported that the State Pharmaceuticals Manufacturing Corporation (SPMC) entered into agreements in 2017 and 2018 to establish joint ventures with several private sector companies which were not part of the buyback agreement.

Sri Lanka is heavily reliant on imports for its local drug requirement and, as a result, a large sum of foreign exchange flows out of the country annually. Only 15% of the local requirement is manufactured locally following the buyback agreements, while previously it was around 5-8%.