Lanka sends SOS on pharma supplies; drugmakers wary

The Sri Lankan agency responsible for procuring drugs has asked the Indian body representing pharma exporters to “sensitize” its members on the need to ensure medical supplies to the crisis-hit island nation, according to a top official.

The request by State Pharmaceuticals Corp. of Sri Lanka to the Pharmaceuticals Export Promotion Council of India (Pharmexcil) comes amid unprecedented financial turmoil in India’s southern neighbour, where drugstore shelves are fast emptying of essentials.

Indian pharmaceutical manufacturers are worried about payments for their exports to Sri Lanka, which is waiting for an International Monetary Fund bailout after defaulting on its loans, a senior Pharmexcil official said requesting anonymity.

“Our pharma exports to Sri Lanka are not very big. Sri Lanka is facing a serious economic crisis and Indian pharma giants are worried about supplying pharmaceutical items to them because of payment issues. It is too early to say how the tension in Sri Lanka is going to affect our pharma exports to that country,” said Udaya Bhaskar, director general, Pharmexcil.

Sri Lanka is India’s 18th largest partner in terms of pharmaceutical trade. India exported pharmaceutical goods worth more than $274.40 million to Sri Lanka in FY21, marking a 25% growth over the previous year.

Exports declined to $234.56 million in FY22.

“The procurement by the State Pharmaceutical Corporation of Sri Lanka is a regular mechanism. They send circulars to the Indian high commission in Sri Lanka and the mission communicates these to us. Sri Lankan counterparts wrote to the Indian mission even before the crisis started. The latest circular we have received from the mission is for March-end. We have disseminated these circulars to our member-companies if they wish to participate. During the last couple of months, when this disturbance started, the Sri Lankan procurement agency has been seeking supply of drugs and medicines and asking us to sensitize our member companies for exports,” Bhaskar said.

In turn, some Indian companies have reached out to Pharmexcil urging a payment mechanism for ensuring smooth pharma exports. Pharmexcil is the authorized government agency for the promotion of pharmaceutical exports.

“Some of the companies that have already supplied the products before this situation evolved are having problems in getting payments. A few companies have approached Pharmexcil asking for payment mechanisms if any,” said Bhaskar.

It is not unusual for countries in distress to turn to India, which emerged as the ‘pharmacy of the world’ in the wake of the covid-19 pandemic, and has been manufacturing and supplying vaccines around the world, particularly to poor countries.

The Indian pharmaceutical industry appeared confident about meeting Sri Lanka’s needs for medicines.

Said a spokesperson for Sun Pharmaceuticals, the world’s fourth largest generic drugmaker: “The Indian government has extended a $1 billion credit line to Sri Lanka to be used towards providing essential items including fuel, food and medicines. Sun Pharma has a strong presence in Sri Lanka and we continue to supply essential medicines to patients and doctors in the country. Ensuring an uninterrupted supply of medicines to patients is our top priority.”

“For doing any fresh exports in future, our member companies are monitoring the situation in Sri Lanka to come back to normalcy,” Bhaskar said.