Archives

Consumers forced to swallow bitter pill

by Bharatha Malawaraarachchi and Edward Armambewela

Despite claims by the pharmaceutical industry that drug prices had decreased after the introduction of VAT, consumers complain prices remain at the same level or even higher.

The Government owned State Pharmaceuticals Corporation (SPC) says drug prices have come down since VAT was imposed.

"We brought down the prices of drugs by about 5.6 per cent from August 01, when VAT came into effect," SPC's Deputy General Manager (Marketing) E.F.M. Samuel told the Daily News yesterday, adding that there is a clear reduction of prices in the market.

He said the prices are adjusted by a formula set by the Fair Trading Commission.

"That's true. But we have also got complaints that prices have not yet come down," said Fair Trading Commission Chairman Prof. A.D.S. Indraratne adding that prices should decrease as GST or VAT are not imposed on pharmaceutical items.

It is learnt that private sector drugs companies were scheduled to bring down prices from October 01 as they had stocks imported before the introduction of VAT.

"Earlier, GST was imposed on such items and later VAT. We got it waived, so prices had to come down unless the import prices have gone up drastically but there is no confirmation that this had happened," said Prof. Indraratne.

Retailers are complaining that the they are unable to reduce prices as wholesale dealers are yet to change prices. "We have written to the Internal Trade Department to examine this."

However, private pharmaceutical companies say the prices had come down only marginally. "There is a marginal decrease," said Erandajith Ranasinghe, a director of George Steuarts Pharmaceutical.

He said purchases made after the imposition of VAT would enable them to sell the drugs cheaper. "We have to sell the old stocks at the earlier prices but they are now almost over. By mid October we might be able to sell medicine at cheaper rates. We import drugs on dollar terms. If the dollar goes up, prices will automatically go up," he added.

SPC Quality Assurance Manager Kumari Wijeratne yesterday assured the public that as far as efficacy is concerned there is hardly any difference between the generic and the brand name drugs. She said there is no reason why doctors could not specify generic drugs to patients and thus help cut down health expenditure in the family budget rather than specifying high priced brand name drugs.

She said most drugs manufactured in India and Britain conform to a standard formula and specification. Differences, if any, are minimal.

News | Business | Features | Editorial | Security
Politics | World | Letters | Sports | Obituaries |

Produced by Lake House
Copyright 2001 The Associated Newspapers of Ceylon Ltd.
Comments and suggestions to :Web Manager