Mar 11, 2012 (LBO) – Sri Lanka will soon bring a law to control prices of drugs, a media report said amid protests from the pharmaceuticals trade which had warned that price controls may create shortages of essential drugs from time to time. Sri Lanka’s post-independence rulers, who printed money to run deficit budgets, depreciated the currency and created high levels of inflation resorted to price controls especially in the 1970s.
Price controls create ‘shortages’ and so-called ‘black’ markets as price curbs drive products underground.
The Sunday Times newspaper quoted health minister Maithripala Sirisena as saying that legislation would be brought to parliament within a month to control drug prices with a “pricing formula” to be implemented by the health and consumer affairs ministries.
“The same drug is being sold in ten different pharmacies at ten different prices,” the newspaper quoted minister Sirisena as saying.
“This has to be changed to bring about some uniformity.”
While a pricing a formula, if it takes into account import costs, could help avoid shortages it is not clear how it will create the political objective of ‘uniform’ pricing.
Analysts say in any case a firm could transfer price prod