The Sri Lankan government is to do away with tender procedures in purchasing medicinal drugs from local manufacturers for state hospitals, Health Minister Maithripala Sirisena said this week.
The cabinet sub-committee on procurement of drugs for government hospitals has already approved this new purchasing system.
Minister Sirisena told a gathering at the opening ceremony of a new pharmaceutical tablet manufacturing facility of the GlaxoSmithKline company at Ratmalana that it’s more feasible for the Ministry to enter into an agreement with a local manufacturer to purchase drugs rather than resort to long-drawn tender procedures to import drugs from foreign companies.
However this new practice is not possible at present since there are only a few local manufacturers producing the required drugs.
That is why the government is encouraging local and foreign producers to manufacture medicinal drugs for all hospitals locally, he said adding that tax relief and other concessions will be provided for investors who will set up pharmaceutical production factories in the island.
This was included in the 2012 budget, he said. He pointed out that when drugs are manufactured in Sri Lanka they can be monitored as all locally manufactured goods have to pass the WHO standards and the company has to comply with annual certification from the Pharmaceuticals and Drugs Authority.
The government spends more than Rs. 20 billion for the purchase of western drugs for government hospitals annually while the private sector spends Rs. 4-5 billion on their imports.
He added that state hospitals require more than 50 million paracetamol tablets a month (600 million annually) for a population of 20 million. Accordingly, one person is using at least two and half tablets.
He noted that ‘this was unbelievable.” But we have to go by statistics and that was the reality,” he added. Currently the State Pharmaceutical Corporation’s manufacturing capacity is just 60 % of this requirement, he disclosed.
Sri Lanka sees the manufacturing of pharmaceuticals as a Strategic Import Replacement Enterprise, by granting tax holidays for investment in the pharmaceuticals production, he added.
|GSK to invest over a billion rupees on Lankan expansion
GlaxoSmithKline (GSK) Sri Lanka, a global pharmaceutical giant and one of the 20 leading pharmaceutical manufacturers in the world, is to invest Rs. 1.4 billion to expand its operations in the island, boost its pharmaceutical manufacturing sector and help stabilize domestic prices, according to T.S Dayanand, Managing Director of GSK Consumer Healthcare Sri Lanka.
He told the Business Times on the sidelines of the opening of GSK’s new pharma tablets manufacturing facility in Moratuwa on Tuesday that the new facility was built at a cost of Rs. 217 million as part of the Rs. 1.4 billion investment. GSK has invested Rs. 500 million in the last five years, and it has been able to save foreign exchange amounting to US$ 32 million per annum by localisation of products, he said.
The new plant has the capacity to produce 2.5 billion Paracetamol tablets per annum under the brand name Panadol. However it will be operated at 50% capacity for the manufacture of Panadol tablets. The remaining capacity will be used to manufacture other pharmaceutical tablet formulations for the country, he said.
The new plant was opened by Basil Rajapakse, Minister of Economic Development in the presence of Maithripala Sirisena - Minister of Health, Jeewan Kumaratunga - Minister of Posts, British High Commissioner John Rankin and GSK Sri Lanka officials including Managing Director Stuart Chapman.
Mr. Dayanand said the facility is one of the single largest investments in Sri Lanka’s pharmaceutical industry.
GSK while concentrating on the expansion of its production facility in Ratmalana will also explore the possibility of setting up production plants in other parts of the country, taking advantage of government concessions, he said. “We are looking to bring in state of the art technology to Sri Lanka."