Cablegate: Pharmaceutical Industry Deems Sri Lanka

This record is a partial extract of the original cable. The full text of the original cable is not available.

110818Z Aug 05

UNCLAS SECTION 01 OF 03 COLOMBO 001404

SIPDIS

DEPARTMENT FOR SA/INS

DEPARTMENT PASS TO USTR

GENEVA FOR USTR

E.O. 12958: N/A
TAGS: ECON ETRD EAID CE WTO
SUBJECT: PHARMACEUTICAL INDUSTRY DEEMS SRI LANKA
NATIONAL DRUG POLICY ANTI-TRADE

1. Summary. Sri Lankan health authorities are
discussing a new National Medicinal Drug Policy
(NMDP) that would theoretically preserve access to
low-cost, essential medicines. The main selection
criteria for drugs under this new policy will include
cost-effectiveness, need, quality, safety and
efficacy. The policy also proposes to promote the
import of generic drugs and restrict the use of brand
name drugs. The pharmaceutical industry is concerned
about the NMDP and says it is anti-trade and does not
bode well for patient choice, pharmaceutical research
companies, or healthcare in general. End Summary.

2. In late-June, the Ministry of Health convened a
two-day consultation to finalize a proposed National
Medicinal Drug Policy. The NMDP?s key objective,
based on the essential medicine concept, is the
availability and affordability of effective, safe and
good quality medicines, i.e. cheap drugs. Other key
recommendations include:

-- Limiting the number of varieties of a given drug
(brands);

-- Mandating generic prescriptions by doctors;

-- Permitting ?cost effective? generic substitution
by pharmacists with the approval of the patient;

-- Incorporating into national laws the Doha
Declaration on medicinal drugs (to allow parallel
imports and compulsory licensing) to ensure
affordability of needed medicine;

-- Giving preference to local manufacturers in the
supply of drugs to the government sector; and

-- Establishing a National Medicinal Drugs Regulatory
Authority (NMDRA) responsible for regulation and
control of drugs.

3. The consultation appeared to be heavily biased
toward the views of government health officials,
given the number of officials who attended and the
background of the various speakers. The proposed
policy still needs cabinet approval, drafting and
parliamentary approval to become law.

4. There is no comprehensive health or drug policy in
Sri Lanka. Currently, all medicinal drugs, whether
imported or locally manufactured, need to be registered
with the Cosmetics Drugs and Devices Authority (CDDA).
The CDDA is under-funded and understaffed and drug
regulation is weak. Infiltration of substandard and
counterfeit drugs is a problem and self-medication is
on the rise. In addition, practically any drug can be
bought over the counter without a prescription.
Reportedly, over 9,000 drugs are registered in the
country (with about 3,000 brand name and generic drugs
currently available) creating a chaotic situation in
prescriptions and sales.

5. The standard and delivery of government medical
services, which are supplied free of charge, also
leave much to be desired. As a result, Sri Lankans
are increasingly resorting to private sector health
care, although there is no national health care
insurance scheme. Consequently, the cost of medical
care and drugs has become a major political issue.
The NMDP was initiated by the World Health
Organization (WHO), which supported the cost
effectiveness criteria due to financial constraints
faced by the Government and the people of Sri Lanka
in meeting health care expenses.

SUPPORTERS HAIL THE ?PATIENT FRIENDLY? DRUG POLICY

6. The new policy has drawn support from various
sectors. According to pharmaceutical industry
sources, the policy is designed and has the backing
of groups with a socialist ideology in the health
sector. A key supporter is Prof C. Weerasooriya, a
former head of the Pharmacology Department of the
Colombo University and currently a WHO regional
advisor on drug policy. Weerasooriya is the
facilitator of the NMDP and newspapers quoted him
hailing the NMDP as ?a model for South Asia and the
third world in fostering a patient friendly drug
policy.? There are several others in the CDDA and
government medical service who support the move.
The policy has received strong support of health
activists. Some sections of the media have also
hailed the proposed ?patient friendly? drug policy
saying consideration of cost effectiveness and need
when registering drugs will result in cheaper drugs
leading to a healthier life.

INDUSTRY SAYS COST EFFECTIVENESS AND NEED SHOULD NOT
BE CRITERIA

7. The Independent Medical Practitioners Association
(IMPA)(private medical practitioners) and the
pharmaceutical industry oppose the NMDP. Michael
Andree, Managing Director of GlaxoSmithKline Sri
Lanka, the only international pharmaceutical company
manufacturing in Sri Lanka, expressed great concern
about the policy. He strongly criticized the move to
consider cost effectiveness and need when registering
drugs, adding that these two factors have never been
recommended by the WHO as criteria for registration.
He said that evaluation should be purely science-
based and should test for quality, efficacy and side
effects, which are the basic global criteria in the
selection of drugs. Andree also expressed concern
about mandatory generic prescriptions and giving
pharmacists authority to substitute a prescribed drug
with a generic as this will eliminate the doctor?s
and patient?s choice in treatment. According to
Andree, pharmacists might recommend the cheapest
drug, which would not be in the best interest of the
patient and might also violate the contract between
the doctor and the patient. The IMPA also expressed
similar sentiments and added that the decision to
allow generic substitution by pharmacists is
premature due to the present stage of development of
Sri Lanka?s drug regulations and its pharmacy system.
Further, there is no system to test the efficacy of
generic drugs in Sri Lanka.

A BID TO RESTRICT PHARMACEUTICAL RESEARCH

8. According to Andree, the NMDP has been drafted
and supported by a group with an irrational ideology.
It is not in the interest of research-based
pharmaceutical companies such as Glaxo and could
limit the availability of good quality drugs.
However, the absence of a direct presence here of
research-based pharmaceutical companies other than
Glaxo and Aventis (Aventis has a trading operation),
restricts their ability to fight anti-business
policies. Glaxo has had several bad experiences in
Sri Lanka trying to protect its patents and fighting
policies aimed at excluding business opportunities
for research based pharmaceutical companies. He
believes the NMDP will have long-term negative
effects on the health sector and pharmaceutical
companies.

9. Another area of concern is the recommended policy
on parallel imports. According to Andree, the Doha
declaration clause on parallel imports is being mis-
interpreted in the NMDP, by attempting to include
parallel imports in the national policy as a general
clause, and not limiting it to national emergencies.

10. Pharmaceutical industry sources contacted by the
Embassy expressed mixed feelings about the probable
outcome of the policy. While some sections of the
pharmaceutical industry believe the NMDP will never
come through, others think that it will be at least
partially implemented. Whatever the case may be,
Andree foresees the risk that someday, an official
could utilize any small steps taken now and fully
implement this proposed policy. Andree says that
this policy, if implemented, will have a negative
impact on free trade and free choice. Glaxo will
take legal action if it is implemented in its present
form. Some industry representative believe that
India?s recent accession to WTO TRIPS will mean that
manufacturers in India will no longer be able to copy
drugs as freely as in the past, reducing the amount
of generic drugs available in the Sri Lankan market.
Andree, however, disagrees and says that Indian
accession to TRIPS agreement will not immediately
stop generic supplies from India.

11. Comment: With the increasing incidence of self
medication, poor state of government medical
services, public health-related outbreaks, and free
availability of generic drugs, the need for a
national health policy and a drug policy is
defensible. However, as drug pricing is a highly
sensitive issue, it has become easier for officials
to gain political mileage by focusing on drug prices
rather than on the related need for a health policy
and a drug policy. Pharmaceutical companies have not
publicly voiced their dissent although some have
expressed displeasure to concerned GSL contacts.
From a global point of view, although Sri Lanka is a
small market, such biased policies could set a
precedent for other countries to restrict the
operations of pharmaceutical companies. End Comment.
ENTWISTLE

© Scoop Media