State bid to smash drug companies’ monopoly-Country losing Rs.1.5 billion annually due to exploitive practices

By Don Asoka Wijewardena-January 5, 2014

Health Ministry Secretary Dr. Nihal Jayathilaka yesterday stressed that due to the existing monopoly maintained by some drug companies, with the assistance of their local agents, the government had been losing a great deal of money annually. On the instructions of Health Minister Maithripala Sirisena he had instructed the Drug Regulatory Authority to break the monopoly.

He pointed out that he had instructed the Cosmetic Devises and Drug Regulatory Authority (CDDRA) Director Dr.Hemantha Beneragama to break the monopoly; to call for more bidders and enhance competition. More local drug manufacturers would be called upon to bid. At present the local manufacturers were able to manufacture only 10 per cent of drugs.

Dr.Jayathilaka added that some drug companies were having a patent period. As a result, it was rather difficult to break the monopoly. But when the patent period was over, all local manufacturers, including SPMC, would be encouraged to manufacture adequate supplies of the required drugs.

He said that, for instance, the government would be able to save Rs.1.5 billion annually if highly expensive drugs meant for kidney and cancer patients could be purchased at lower prices. Some injections, such as, Herceptin, Mabthara and Protine Bound Paclitaxel were highly expensive injection vials used by patients with malignant cancer. One Protine Bound Paclitaxel vial was Rs.73,000. But a local drug agent had broken the monopoly by selling the drug at Rs.38,000 to the government. It was crystal clear that around Rs.300 million could be saved annually. But the quality and the efficacy of the drug should be assured.

Dr.Jayathilaka said that by saving Rs.1.5 billion from drug purchasing annually, the government would be able to use the money for other development purposes. "I have instructed the CDDRA to break the drug monopoly because some companies’ only motive was profit maximization. Some local agents want to supply highly expensive drugs at cheaper prices. Why should we entertain large-scale local drug agents who are bent on capitalizing on the situation?", Dr.Jayathilaka asked.