Sri Lanka likely to raise drug price up to 7% on June 30 as authorities consider a revision to medicine prices amid rising import costs, currency fluctuations, and mounting concerns over potential shortages in the pharmaceutical market.
Sri Lanka likely to raise drug price up to 7% on June 30 amid cost pressures
The proposed adjustment, which has yet to receive formal approval, comes as stakeholders in the healthcare sector warn that delays in revising prices could discourage imports and create supply disruptions in a country that remains heavily dependent on imported medicines.
Health Minister Nalinda Jayatissa said a price revision is expected to be reviewed on June 30 under the existing regulatory framework governing pharmaceutical pricing in Sri Lanka. According to the Minister, medicine prices could increase by between 6 percent and 7 percent, although a final decision has not yet been made.
“The price revision will be considered on June 30. There could be a 6-7 percent price hike, but this has not been approved yet,” Jayatissa said.
The potential increase follows a significant decline in medicine prices implemented in 2023, when authorities approved a 16 percent reduction. Under current regulations, price adjustments can be reviewed when there is a movement of more than 5 percent in the exchange rate since the previous revision.
Sri Lanka’s pharmaceutical sector is particularly vulnerable to exchange rate movements because the country relies extensively on medicine imports to meet domestic demand. Industry data shows that Sri Lanka imported approximately US$ 667 million worth of medicinal drugs last year, accounting for around 85 percent of the total pharmaceutical market.
This heavy dependence on imported products means that fluctuations in the value of the Sri Lankan rupee have a direct impact on procurement costs, pricing structures, and the availability of medicines.
Over the past six months, the Sri Lankan rupee has weakened noticeably, with the Central Bank’s indicative exchange rate declining by around 8 percent. As a result, importers and pharmaceutical suppliers have faced increased costs in sourcing medicines from international manufacturers.
Industry representatives argue that without timely price adjustments, suppliers may find it increasingly difficult to absorb higher import costs, potentially affecting the availability of essential medicines in the local market.
Concerns about a possible shortage have intensified amid claims that the National Medicines Regulatory Authority has been slow to approve price revisions despite meeting the conditions outlined in existing regulations.
According to stakeholders, the regulatory framework clearly provides for a review of maximum retail prices when exchange rate movements exceed the 5 percent threshold. They argue that delays in implementing these adjustments can create uncertainty for importers and distributors responsible for maintaining a stable supply of medicines.
The National Medicines Regulatory Authority guidelines state that when exchange rates fluctuate by more than 5 percent, whether upward or downward, the authority may review and revise the maximum retail prices of pharmaceutical products.
Although a pricing formula is used to determine allowable revisions, industry participants note that exchange rate movements remain the most significant factor influencing final prices due to the country’s dependence on imported pharmaceuticals.
The discussion surrounding medicine pricing comes at a time when Sri Lanka continues efforts to stabilize its economy following recent financial challenges. While policymakers remain cautious about increasing healthcare costs for consumers, industry experts argue that maintaining adequate supplies of medicines is equally important.
Balancing affordability with sustainability remains a key challenge for regulators. On one hand, authorities seek to protect patients from excessive price increases. On the other, pharmaceutical importers require commercially viable pricing structures to continue sourcing products in sufficient quantities.
The pharmaceutical sector warns that prolonged delays in price revisions could discourage imports, particularly for lower-margin products where suppliers already face significant cost pressures. Such developments could affect the availability of critical medicines and place additional strain on healthcare providers and patients.
As the June 30 review date approaches, stakeholders across the healthcare industry will be closely watching the outcome. The decision is expected to have implications not only for consumers and pharmacies but also for importers, distributors, and healthcare institutions that depend on reliable access to pharmaceutical products.
With medicine imports continuing to dominate the local market and exchange rate pressures persisting, the upcoming review is likely to play a significant role in shaping the country’s pharmaceutical landscape over the coming months. Whether the proposed increase is approved or adjusted, the decision will reflect the delicate balance between ensuring affordability and maintaining a stable supply of medicines for the Sri Lankan public.