The NMRA has approved another batch of medicine price revisions because of the depreciation of the rupee. That may be commercially understandable. But for patients already struggling with the cost of treatment, another question matters just as much: when the currency moves the other way, do medicine prices follow?
Sri Lanka’s National Medicines Regulatory Authority has published a second list of approved revisions to Maximum Retail Prices of medicines specifically resulting from currency depreciation.
The latest list covers applications reviewed and approved by the NMRA Pricing Division up to September 21. It follows an earlier list published on September 17 and a regulatory process established to allow pharmaceutical companies to seek revised maximum prices when movements in the US dollar exchange rate cross the prescribed threshold.
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There is an economic logic behind the exercise.
Sri Lanka remains heavily dependent on imported medicines and imported pharmaceutical inputs. When the rupee weakens against the dollar, the local-currency cost of bringing those products into the country rises.
The pharmaceutical industry has been warning for months that currency depreciation, freight costs and other pressures were making existing controlled prices increasingly difficult to sustain. Earlier this year, industry representatives warned that failure to accommodate significant exchange-rate movements could eventually affect medicine availability.
The NMRA’s own procedure recognises that problem.
Its published rules allow Marketing Authorisation Holders to apply for an MRP revision where the relevant average US dollar exchange rate has moved by more than 5%. The Authority has also specified that revised prices apply only to consignments imported after approval of the new MRP.
That qualification matters. Medicine already imported under an earlier cost structure should not simply acquire a higher price because a new ceiling has subsequently been approved.
But there is another side to the equation, and it belongs to the patient.
For a person taking medication every day for diabetes, hypertension, heart disease or another chronic condition, even apparently modest price movements accumulate month after month. Medicine is not an optional purchase which can simply be postponed until prices improve.
The question therefore is not whether pharmaceutical companies should be protected indefinitely from genuine increases in import costs. If regulated prices make importing essential medicines commercially impossible, the eventual result can be shortages – which may be considerably worse for patients than a transparent price adjustment.
The question is whether the mechanism operates equally in both directions.
If depreciation of the rupee provides grounds for increasing an approved maximum retail price, appreciation should logically create the possibility of reviewing that price downward when the relevant conditions are met.
Sri Lanka has been here before. Currency movements following the economic crisis produced dramatic changes in import costs, and medicine pricing became one of the clearest examples of the tension between commercial viability and affordability.
That makes transparency particularly important now.
Patients should be able to know what the previous approved price was, what the revised ceiling is, the exchange rate upon which the adjustment was calculated and whether subsequent currency movements trigger another review.
There is also an important distinction between a maximum retail price and the price that must necessarily be charged. An approved increase in the ceiling does not mean every medicine must automatically be sold at that maximum.
The NMRA says it is now publishing the approved lists online rather than separately emailing individual agents, an improvement in public visibility of the process. It has also moved the status of medicine pricing reviews and import-licence pricing applications online in what it describes as an effort to improve transparency and access to information.
That is welcome.
