Local pharmaceutical production faces investment risks as manufacturers urge Sri Lanka to adopt a stable long-term procurement policy.
Sri Lanka’s local pharmaceutical production sector risks losing billions of rupees in future investment because of frequent changes to government policy, manufacturers have warned.
The Sri Lanka Pharmaceutical Manufacturers’ Association said policy instability had created uncertainty among investors planning new factories, technology and production capacity.
The warning comes as the Government seeks to expand domestic medicine manufacturing and reduce foreign exchange spending on imported pharmaceuticals.
Officials have placed greater focus on local production after the COVID-19 pandemic disrupted foreign medicine imports and exposed Sri Lanka’s dependence on overseas suppliers.
Addressing the SLPMA’s 60th Annual General Meeting, newly appointed Chairman Dinesh Athapaththu called for a stable and long-term government policy.
He said sustainable industry growth required greater policy certainty rather than temporary relief measures introduced for limited periods.
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Buyback changes unsettle pharmaceutical investors
The main concern involves frequent changes to the Government’s “Buyback Scheme”, which authorities use to purchase locally manufactured medicines.
The programme has supported local pharmaceutical production for many years. However, manufacturers say recent amendments have created serious uncertainty for existing and prospective investors.
Pharmaceutical manufacturing differs from many conventional industries because investments require several years to produce returns.
Building a modern pharmaceutical factory can take between two and five years. Companies then require additional time to complete standards testing, obtain quality certifications and secure regulatory approvals.
Manufacturers hoping to enter export markets face another requirement. The relevant medicine must first establish a successful record in Sri Lanka’s domestic market.
As a result, companies committing large sums to factories and technical systems need confidence that procurement rules will remain consistent.
Industry seeks long-term national policy
The SLPMA has asked the Government to introduce a long-term medicine procurement framework connected to a broader national industrial strategy.
The association also wants authorities to maintain incentives that encourage manufacturers to invest in local facilities, technology and workforce development.
Athapaththu said manufacturers would introduce new technology, expand investment and generate more export revenue if the Government provided policy stability.
Such growth could also help reduce Sri Lanka’s dependence on imported medicines and limit the outflow of foreign currency.
However, unpredictable changes to the buyback system could delay planned projects and discourage investors from committing billions of rupees.
The industry’s progress over the next decade will therefore depend heavily on the Government’s ability to maintain a stable policy for local pharmaceutical production.
