Sri Lanka introduces new maximum retail pricing system for medicines

The Government of Sri Lanka has issued an Extraordinary Gazette Notification introducing a new pricing mechanism to regulate the cost of medicines in the country.

The notification was issued by the Minister of Health and Mass Media, Dr. Nalinda Jayatissa.

This new system aims to ensure transparency, fairness, and affordability in medicine pricing for the public.

Under the new regulations, the National Medicines Regulatory Authority (NMRA) has been given the authority to determine and revise the Maximum Retail Price (MRP) and the Maximum Ceiling Price (MCP) of medicinal drugs.

Key Features of the New Regulations:

1. MRP Calculation:
   The MRP will be calculated based on:
   • Cost, Insurance, and Freight (CIF)
   • Duties and Taxes (DT)
   • Supply Chain Total Markup (SCTM)
     The exchange rate used for calculation will be based on the average value over the past three months, as published by the Central Bank of Sri Lanka (CBSL).
2. MCP Calculation:
   The MCP will be determined by:
   • Analyzing retail prices across various pharmacies
   • Considering market shares of different brands and generics
     A median retail price method will be used to arrive at the final figure.
3. Price Enforcement:
   • Medicines cannot be sold above the MCP.
   • If a product’s MRP is lower than the MCP, it cannot be increased.
   • The NMRA will review and revise the MRP and MCP twice a year, or sooner if needed due to exchange rate changes.
4. New Medicines:
   For newly registered medicines, if the MRP is found to be higher than the MCP, the MCP will be used as the selling price.
5. Public Interest Adjustments:
   The NMRA has the legal right to revise or recall existing MRPs at any time to reflect market conditions and protect public interest. This is especially relevant in cases of exchange rate fluctuations.
6. Penalties for Violations:
   Any seller found violating these pricing rules will face penalties under the National Medicines Regulatory Authority Act.

This new regulation is expected to improve access to essential medicines while maintaining affordability and controlling price manipulation in the pharmaceutical market.

Read the gazette from here

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