The Hon. (Dr.) Nalinda Jayatissa - Minister of Health and Mass Media and Chief Government Whip

¶ 01 Hon. Deputy Speaker, I respond to the Question raised on 19.06.2025 under Standing Order 27(2) by Hon. Ravi Karunanayake regarding procurement delays causing medicine shortages.

¶ 02 1. Based on the Medical Supplies Division’s (MSD) annual requirement, supplies are provided by the State Pharmaceutical Corporation (SPC) and local manufacturers. In certain instances, regional purchases are also used. Consequently, medicine shortages at MSD and government hospitals vary over time and place. Due to local purchase permissions, nationwide figures fluctuate across facilities and cannot be precisely aggregated at a single point.

¶ 03 2. MSD supplies hospitals according to a priority list. Daily availability depends on SPC deliveries to MSD and hospitals’ own regional procurements. Therefore, the percentage availability of National Formulary items fluctuates daily.

¶ 04 3. This is a key cause of recent shortages. The 2025 annual procurement should have been initiated in January 2024, since the end-to-end process takes 9-11 months. However, orders were delayed and released between March 2024 and May 2025, causing intermittent gaps.

¶ 05 For 2025, 493 orders were received, but 206 were received too late for timely processing, leaving insufficient lead time. Accordingly, MSD requested that 2026 orders be placed at the beginning of 2025. SPC received the 2026 order lists in January 2025.

¶ 06 By 31 January 2025, SPC had called 443 tenders (covering 447 items) for 2026 requirements. All calls have closed and moved to evaluation; 121 have been submitted to the Procurement Committee, and 45 tenders have already been awarded. We expect the full 2026 annual requirement to be supplied without delay, given these reforms.

¶ 07 Following COPA’s Third Report (Parliamentary Q-Series No. 291), a five-member committee was appointed to study issues and recommend a more efficient and effective supply chain. It has submitted short- and medium-term action plans, and an Operations Committee now oversees progress, follow-up and supply chain continuity.

¶ 08 4. Coordination between MSD, SPC and private suppliers has not broken down. MSD and SPC are working in close coordination on about two-thirds of procurement activities. Issues with private suppliers are jointly managed by SPC and MSD to maintain continuity, with weekly Health Ministry review meetings every Thursday to direct interventions, including convening NMRA, SPC and, where needed, the Ministry of Finance to resolve bottlenecks. Current problems stem from past process failures; we are correcting them.

¶ 09 International competitive bidding typically takes ~9 months; national competitive bidding ~4 months. Emergency procurement is used only under legally defined conditions (e.g., pandemics or verified national shortages) and cannot be invoked arbitrarily.

¶ 10 Hospitals already use the Treasury’s electronic procurement system for market-price-aligned local purchases. The e-procurement platform is being enhanced to support international competitive bidding as well; once completed by the Ministry of Finance, it will improve efficiency and transparency across the supply chain.

¶ 11 The National Procurement Commission is responsible for a National Medicines Procurement Policy and is updating the 2022 “Guidelines Compendium for Medicines and Medical Devices” to current needs.

¶ 12 All institutions—NPC, NMRA, SPC, Health Ministry, and Finance Ministry—share the ultimate objective of uninterrupted access to quality medicines. If existing processes delay that, we must fix them. The President recently chaired a meeting with the Procurement Commission and others to address such barriers. Discussions are ongoing.

¶ 13 We operate the “Swastha” IT system linking MSD, SPC, NMRA and hospitals. It enables visibility and inter-facility transfers of medicines where feasible, using national and regional data access, which is why a single national shortage figure at a moment in time is impractical, though facility-level gaps can be managed.

¶ 14 We are prioritizing and facilitating local manufacturers, including tax relief where appropriate, prioritizing hospital-essential production, and buy-back guarantees. Cabinet last week approved a buy-back guarantee framework to provide assurance of government off-take, improving confidence and capacity expansion. NMRA prioritizes registration of new locally manufactured medicines. SPC is also expanding production capacity.

¶ 15 10. To ensure supply assurance, an IT-based hospital purchasing mechanism and 2023 guidelines have been introduced to register private hospitals and suppliers, enabling hospitals to procure required items when necessary.

¶ 16 Regarding the Kalubowila clinic list tabled: for example, while amoxicillin 500 mg was unavailable, 250 mg was available; similarly with cephalexin. Thus, although a specific strength may be out, alternatives allow management. Therefore, that document is not fully accurate. Additionally, Rs. 35 billion has been provided from the Treasury for regional purchases with guidance issued, enabling facilities to buy urgently needed items.