Questions/Answers

Sri Lanka transformed the pricing of essential medicines, making drugs more affordable for patients by introducing new pricing mechanism under a Maximum Retail Price (MRP) formula until a long-term solution is implemented. The Government issued a notice by Gazette setting a price ceiling for 48 essential generic medicines (over 300 drugs) used to treat noncommunicable diseases (NCDs), such as diabetes, heart disease, high blood pressure, high cholesterol, and other common diseases. Sri Lanka’s pharmaceutical market is estimated to be worth USD $ 400 million per year. The regulation of the pricing of these medicines has an enormous impact on the health of the population. The revised drug price formula introduced in 2016 ensures that essential medicines should be sold below a recommended maximum retail price at all times. Upon issuing the gazette notification the prices of certain drugs reduced up to 85 % as a result. Successful regulation of pharmaceutical prices shows how evidence based policies can protect patients’ rights, reduce out of pocket expenditure, ensure affordable access to quality assured medicines and advance the principles of Universal Health Coverage. The revised pricing policy is a major achievement in safeguarding patients’ rights to access affordable medicine in Sri Lanka. Reduction of prices of drugs used for cancer treatment was imposed, ensuring improvement of cancer management in Sri Lanka. As a result, certain cancer drug prices have come down in considerable amounts. Availability of quality substitutes ensures the reduction of drug prices to an affordable level. In addition, Ministry of Health has decided to continue cancer treatment without having a maximum local purchasing level to safe guard the lives of patients irrespective of the cost of treatment. This is one of the measures, which ensure the privilege of free health to all the citizens in the country.

1. Reduction of hospitalization and disability due to noncommunicable diseases that has arises with the transition in the demographic profile and improving quality of life of the poorest and the most vulnerable in the country 2. Protection of every patient’s right irrespective of race, gender, education or economic status by ensuring affordable access to quality assured medicines and advance the principals of Universal Health Coverage. 3. Ensuring that by the pricing of essential medicines, enabling cancer patients to continue with their treatment without interruption and safeguarding the lives of patients irrespective of the cost ensuring the privilege of free health to all citizens in the country 4. Reduction of the price of stents and medicines used in cardiac emergencies and making them available in all hospitals of the public sector that provides comprehensive health care to 60% of the population in the country 5. Ensuring that intraocular lenses and injectors used during cataract surgeries are sharply regulated that would enable even the poorest and the most vulnerable and especially older persons, indigenous people, migrants and internally displaced persons to be able to undergo eye surgery in the govt sector free of charge and improve their vision and quality of life

Transforming the pricing of essential medicines and making drugs available for patients was an innovative policy decision taken by the Government of Sri Lanka. This revised pricing policy is a major achievement by the health sector that promotes partnerships to reach the poorest and most vulnerable. Since health care in free for all in the country, expensive items such as intraocular lenses and heart stents are provided free in the government hospitals making all essential medicines and devices available to all irrespective of sex, gender, age, race, ethnicity and other factors. The country was experiencing rising costs of medicines after the pharmaceutical price control was abolished in 2003. As a result of the changing epidemiological and demographic profile, the country experienced increase in the burden of non communicable diseases coupled with the high prices of medicines for treating these diseases that put the need for pharmaceutical price control as a high need. Sri Lanka’s successful regulation of pharmaceutical prices demonstrates that evidence based policies can protect patients’ rights, reduce out of pocket expenditure, and ensure affordable access to quality assured medicines and advance the principles of Universal Health Coverage to all reaching the poorest and most vulnerable.

Despite low expenditure on healthcare, Sri Lanka’s health indicators are on par with more developed countries in the region mainly due to the provision of free preventive and curative health care to all its citizens through a wide network of health care institutions in the country. The ageing population and the rise in noncommunicable diseases resulted in a higher demand for expensive drugs and devices that resulted in patients frequently spending out of pocket for prescribed medicine and devices for health emergencies which left the poor and vulnerable without options. In the past, drug importers based prices on the cost, insurance and freight (CIF) value of medicines vulnerable to exploitation. Realizing the growing need to achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all in order to serve the poor and most vulnerable, the National Medicine Regulator Authority conducted analysis of the country’s approach to pharmaceutical price control with the help of international partners and consensus was reached on the need to regulate the price of essential medicines to improve the delivery of health services that does not exclude any sector.

Consisting of state funded health care that is free at the point of delivery, a sound primary health care policy and widespread health care services, Sri Lanka is a good example of universal health coverage. But health transition and disparities in provision and financing threaten this situation. Even though Sri Lanka did well on the Millennium Development Goal health indicators, Sustainable Development Goal for health has a wider purview, which is to “ensure healthy lives and promote wellbeing for all at all ages”. With health sector reforms stressing public private partnerships, shifting a part of health care costs onto households is inevitable which would affect those falling below poverty lines being unable to purchase for example, “intraocular lenses for cataract surgery or pins for bone fracture repair, coronary stents etc”. The establishment of this maximum retailed price for essential medicines and devices would include a safety net for the vulnerable and the poor that includes men, women, children or the differently able.

As a result of this establishment of Maximum Retailed Price for Essential Medicines and Devices, certain cancer drug prices have come down in considerable amounts. Availability of quality substitutes ensures the reduction of drug prices to an affordable level. Further the Ministry of Health decided to continue cancer treatment without having a maximum local purchasing level to safeguard the lives of patients irrespective of the cost of treatment. This is a measure which ensures the privilege of healthcare to all cancer patients in the country irrespective of their gender, age and economic status. The Ministry also has is taken several steps to prevent NCDs and to improve the lives of people already affected. Cardiac stents are the most popular minimal invasive intervention for the ischemic heart diseases. The government issued the gazette notification to reduce prices of stents for heart patients, which is a life investment, by Rs.350, 000 and their medicine by Rs.50, 000. High quality stents selected by the consultants are provided free to patients who undergo surgeries at government hospitals. In 2016 alone Rs. 640 million alone was spent to provide free stents and measure were taken to provide relief even at private health care institutions.

As per indicator Indicator 3.8.2 of SDG’s “Number of people covered by health insurance or a public health system per 1,000 populations” is covered by Sri Lanka’s universal healthcare system that provides free healthcare to all citizens. Nevertheless there were disparities across different social strata towards affordability of essential drugs and devices due to the pricing formula that existed. Establishment of the Maximum Retailed Price for essential medicines was an innovative measure that abolished this difference.

This was an original innovation in Sri Lanka as it is one of the few countries in the world providing free health care for all its citizens. Sri Lanka’s pharmaceutical market is estimated to be worth USD $ 400 million per year. The regulation of the pricing of these medicines had an enormous impact on the health of the population.

The National Medicine Regulator Authority (NMRA) was established by the former Minister of Health and current President of Sri Lanka,demonstrating the highest-level political commitment to the provision of affordable, safe, quality medicines. The NMRA appointed a Pricing Committee to carry out this mandate that included both financial, material and human resources

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Yes, the initiative is adaptable to other contexts within the healthcare system in Sri Lanka. Sri Lanka has a Universal Care System which makes this system adaptable easily such as regulating the private health care sector that provides health care to 40% of the population in ways such as consultation fees, daily room charges and other essential expenditures that would make the system affordable to a wider range of the population and reducing the huge burden of the public sector. Some studies have shown that the pricing between the actual cost and the cost borne by the patient has a wide berth giving room for establishment of maximum / ceiling pricing for different areas within the health service delivery system in the private sector.

The right to health is a fundamental human right .The goal of Universal Health Coverage is everyone in this Island must be able to access decent, effective healthcare without facing financial hardship or being pushed into poverty. As long as people have to pay out of their pockets for treatment at the time of need there will be vast inequalities and injustices in access to healthcare. The government is allocating significant proportion of its total budget for Healthcare. It is a government decision to allocate money for this initiative .It is a policy decision enacted to government regulations.

This initiative was a onetime decision .It’s not phased out in time intervals.

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The initiative involved the collaboration of the government health sector, the private health sector, The National Authority on Tobacco and Alcohol (NATA),National Medicine Regulatory Authority(NMRA), multiple pharmaceutical companies, the academia, research companies, distributors, importers, delegated from the European Union, National Drug Quality Assurance Laboratory, Ceylon Chamber of Commerce, shippers and many more. The ceiling price of the drugs were decided by a committee headed by the Chairman of the National Authority on Tobacco and Alcohol with Co Chairmanship of the head of the NMRA. Following this there were multiple discussions with all stakeholders on different levels to finalize each step of the process.Once the gazette notification was published, the Health Ministry set up two hotlines to entertain public complaints if they discovered companies sold drugs at higher levels than the ceiling. All public complaints are investigated and if companies or individual pharmacies are found fault with they are prosecuted.

Key lessons learnt 1. It is possible to implement a project of this magnitude if there is political will as well as cooperation from all sectors 2. It is necessary to have continuous post marketing surveillance 3. Monitoring of a project becomes more efficient when there is consumer (in this case patient) involvement 4. There needs to be observations on drug distribution and selling on a continuous basis 5. Ongoing measures are needed to ensure that essential medicines for Non Communicable Diseases (NCD) are affordable and accessible for the entire population in Sri Lanka.Practices such as unethical drug promotion by the pharmaceutical industry remain a concern 6. Further mechanisms are needed to ensure that any tax reductions or exemptions on medicines. 7. The new pricing policy is a helpful measure which sets a maximum cap on the price of core essential medicines for NCDs and other common conditions. For many of the essential medicines, cheaper generic medicines are already available below the maximum retail price. However, the public are often reluctant to purchase them because of concerns about their quality. This should be addressed. 8. Making medicines affordable requires adoption of a comprehensive approach.