- Local industry warns of impact from blanket price
- Claims industry stakeholders reached consensus on price cap formula
Two months after imposing Maximum Retail Prices (MRPs) on 350 medicines, the National Medicines Regulatory Authority (NMRA) is preparing to review and reduce the prices of a further 200 medicines by the end of next week, it is learnt.
NMRA Chairman Dr. Ananda Wijewickrama told The Sunday Morning that although court cases related to medicine pricing were still ongoing, the removal of the earlier injunction had cleared the way for further price reductions.
“Since the injunction is no longer in effect, the NMRA can reduce the prices of additional medicines beyond those that were recently revised,” he said.
A committee appointed by the NMRA is currently evaluating the pricing of the selected medicines. “We will soon announce the new prices,” Dr. Wijewickrama told The Sunday Morning.
Price reductions
Last November, the NMRA announced MRPs for 350 medicines with immediate effect. These included commonly used medicines for blood pressure, worm treatment, long-term conditions such as epilepsy, and several cancer medications. Under the revised prices, aspirin is now capped at Rs. 5.85 per tablet when sold in blister packs and Rs. 4.50 per tablet when sold in bulk.
Significant reductions were also seen in oncology medications. The MRP of the cancer medication paclitaxel was reduced from Rs. 42,000 per vial to Rs. 26,332.29. Nimodipine, used to prevent paralysis following a stroke, was brought down from Rs. 6,348 to Rs. 4,100. Long-term anticonvulsant medication carbamazepine now costs Rs. 47.46, down from Rs. 58.32.
The NMRA has instructed pharmacies to prominently display price lists and has urged the public to report instances where medicines are sold above the approved MRP. Complaints can be submitted via email to complaints@nmra.gov.lk.
Opposition from stakeholders
However, the price control regime has drawn strong opposition from industry stakeholders. Speaking to The Sunday Morning, All-Island Private Pharmacy Owners’ Association (AIPPOA) President Chandika Gankanda warned that blanket price ceilings could destabilise the pharmaceutical sector.
“There are around 7,500 registered medicine brands in Sri Lanka. When Rajitha Senaratne was the Minister of Health, only about 60 medicines were under price control,” he said. “A blanket ceiling price poses a major risk, as many quality pharmaceutical manufacturers are pulling out of Sri Lanka due to non-viable margins.”
Gankanda said industry groups had long advocated for a pricing formula based on the Cost, Insurance, and Freight (CIF) value of medicines. “During Keheliya Rambukwella’s tenure, a pricing mechanism was developed by a committee including doctors and economists, headed by Prof. Sirimal Abeyratne. It was finalised after considering all stakeholder views. But when Ramesh Pathirana took over, the implementation stalled again,” he said.
Referring to recent negotiations, Gankanda said all three stakeholder groups – importers, distributors, and retailers – had agreed to a 75% price reduction mechanism. “If a medicine comes into Sri Lanka at Rs. 100, it could be sold at Rs. 175, accounting for clearance costs and margins. The NMRA initially agreed to this,” he noted.
However, he claimed that the NMRA had later introduced a contradictory regulation. “They brought in a tiered system. We are against this because it reduces the markup retained by pharmacists. Importers have also said that under the new mechanism, the margins given to pharmacies will be reduced,” he said, stressing that the reversal placed severe financial strain on the sector.
Pricing formula
In May 2025, the NMRA officially issued a new guideline outlining the pricing mechanism for medicines, reinforcing the legal provisions of the NMRA Act No.5 of 2015 and regulations published in the Extraordinary Gazette No. 2429/12 dated 25 March 2025.
Under the updated formula, the MRP is calculated based on three components: the CIF value converted to Sri Lankan Rupees, applicable duties and taxes, and a structured Supply Chain Total Markup (SCTM). CIF values must be submitted in US Dollars and converted using the Central Bank’s average selling exchange rate for the previous three months. The tiered markup ranges from 75% for CIF values below Rs. 40 to 45% for CIF values above Rs. 6,500.
The guideline applies to both newly registered and re-registered medicines. Manufacturers and importers are required to submit extensive documentation, including international reference prices, prior NMRA approvals, and recent import and sales data.
The NMRA will rely on External Reference Pricing (ERP) and Internal Reference Pricing (IRP), using benchmarks such as India’s National Pharmaceutical Pricing Authority, Bangladesh’s Directorate General of Drug Administration, and the British National Formulary.
No MRP is permitted to exceed the gazetted Maximum Ceiling Price (MCP), and where the calculated MRP is lower than the MCP, the lower price will apply. Exchange rate-driven revisions exceeding ±5% will be reviewed and implemented as necessary.
The NMRA stressed that any requests for price increases must be formally justified and approved by the Pricing Committee, with appeals directed to the authority’s Appeals Committee. All MRPs must be printed on product labels, and pharmacies are legally required to display them. The guideline will be reviewed at least every six months.
Sri Lanka’s pharmaceutical pricing debate is closely tied to broader fiscal pressures. Since 2021, medicine prices have been revised at least three times due to exchange rate fluctuations, with increases of 9%, 29%, and 40%. While prices of 60 medicines were reduced by 16% in June 2023, the sector continues to face funding gaps, supplier arrears, and import constraints.
With public health expenditure at 1.5% of GDP and an ongoing struggle to balance affordability with supply sustainability, the NMRA’s latest move signals a renewed push to rein in medicine prices – one that is likely to keep regulators and industry players on a collision course in the months ahead.