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Drug prices and State guidance

Prevailing drug prices and those of certain other essential consumables make a mockery of the popular saying that the 'Consumer is King'. In fact the converse seems to be correct in Sri Lanka today, considering the near stranglehold traders seem to be having over some prices.

The introduction of VAT was expected to bring down the prices of essential goods and services but this doesn't seem to be the case in "the open market". Decrees on paper seem to be proving unimplementable in practice. In fact, some errant traders are said to be nonchalantly hiking prices and blaming it all on "VAT". So intransigent are sections of the retail trade.

Nowhere are these contradictions more glaring than in the drug trade. As reported by us yesterday, most patrons of local pharmacies are finding that drug prices are remaining unaltered or even higher than they used to be, the introduction of the VAT regime a few months back notwithstanding. This situation as regards drug prices could be said to be intriguing because VAT or any other indirect taxes of the like are not applicable to drugs and pharmaceutical products, in accordance with a Government decision. VAT was waived on these products and if there is a price decline it should be most evident in the prices of medicines. But this doesn't seem to be the case and it could be said that anything seems to be going as far as everyday trading activities are concerned. In fact, in this sphere the traders' guile seems to be right.

As we argued a couple of days back in this commentary, there is no getting back to those sad old days of the suffocatingly "closed economy", but it is crucially important that the State intervenes selectively and when necessary to ensure that the consumer is treated right by the trader and gets what he is entitled to.

The State Pharmaceutical Corporation, the veritable drug supplying arm of the State, had some good news for the older citizen when on International Elders' Day it announced the sale of drugs at its outlets at reduced prices for senior citizens. This was a bonanza which we welcomed at the time, but are we to believe now that nothing has come out of these efforts? We do not disbelieve the SPC but it apparently needs to ensure that its decisions are implemented. Perhaps, a close probe on the sale of its drugs would help to put things right.

Apparently not everything could be left to the discretion of traders and sales persons. When it comes to consumer affairs, the State needs to show its guiding arm, for, human greed knows no bounds in some circumstances.

The weekend newspapers featured colour advertisements run by the CWE which showcased favourably the prices of essentials sold by them in contrast to the prices prevailing in the so-called open market. This is one instance where a State agency is doing what is expected of it. Perhaps a greater presence of the State in consumer affairs could remedy the situation to a degree in regard to prices of other consumables too. We urge Consumer Affairs Minister Ravi Karunanayake to consider opening more CWE sales outlets to ensure a degree of justice for the consumer. The cooperative system too could be rejuvenated and used for these beneficial purposes.

Wholesalers of drugs have gone on record as saying that drug prices could show a decline by mid-October. Well, mid-October is already here, but no price reductions have been registered.

The time seems to be ripe for the SPC too to consider expanding its network of sales outlets. This is one way in which, the less affluent and poorer patients could be shielded from the vampirical greed of errant pharmacists.

Whether we like it or not, a price control mechanism is a much needed facility. The State cannot abdicate its responsibilities in these areas. If traders are not inclined to follow just regulations, they must be compelled to do so.

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