• Regulator flags excessive markups as legal challenge delays wider implementation

Prices of some medicines in Sri Lanka have dropped by as much as 30–40% following the application of a new pricing formula, raising concerns over excessive markups in the pharmaceutical market, according to the National Medicines Regulatory Authority (NMRA). 

NMRA Chairman Dr. Ananda Wijewickrama told The Sunday Morning that the price reductions had been recorded despite the depreciation of the rupee, suggesting that certain medicines had previously been sold at significantly higher prices. 

“When this formula was applied, the prices of some medicines declined significantly by about 30–40%,” he said. 

Dr. Wijewickrama said the reductions indicated that some medicines had previously been sold at excessively high prices, highlighting the importance of regulating pharmaceutical prices to protect consumers. 

The pricing mechanism, introduced through a gazette notification and accompanying NMRA guidelines, calculates Maximum Retail Prices (MRPs) based on the Cost, Insurance, and Freight (CIF) value of medicines arriving at Sri Lankan ports, together with approved markups across the supply chain. 

He stressed that price regulation was particularly important given the large number of Sri Lankans who purchased medicines using their own money. “There are a significant number of people who buy medicines out of pocket,” he said, adding that price controls would benefit both the public and the Government. 

However, the NMRA’s efforts to extend the pricing formula to more registered medicines have been temporarily interrupted following legal action initiated by the association of pharmaceutical importers challenging the implementation of the relevant gazette. 

Dr. Wijewickrama said that the authority had been progressively assigning MRPs when medicines were registered, their registrations renewed, or import licences issued, before the court intervention halted the process. 

“We believe the case will be heard fairly quickly. Thereafter, we will have to proceed depending on the decision,” he said. 

Sri Lanka currently has approximately 6,000 registered medicines, although the NMRA does not intend to impose MRPs on all products simultaneously. 

Instead, the authority plans to introduce price controls gradually through the registration and import licensing process, which could take between one-and-a-half and two years, according to Dr. Wijewickrama, subject to the outcome of the legal proceedings. 

He added that some registered medicines may never receive an MRP if their registration holders stopped importing them or did not seek import licences. 

The NMRA maintains that the pricing formula can help reduce excessive medicine prices, although the continuation of the wider regulatory process remains dependent on the court’s decision.