The SAITM issues came to some conclusion after a heated week on the coals, with most protesting parties finding peace with the government’s plans to abolish the institution and to transfer the private medical college to a not-for-profit institution.

Deputy Minister Harsha De Silva’s intervention with parents of state medical faculty students who were on a hunger strike was successful as he gave assurances that appeased them. With that the student unions called off their protest and are soon expected to get back to university.

The GMOA bigwigs who were in several rounds of discussion with the government finally agreed to the proposals made by the Government appointed committee to resolve the issue.

Secretary of the GMOA, Dr. Haritha Aluthge was quoted in our sister newspaper, the Dinamina, as saying that the GMOA was not against private medical faculties, as long as they had proper standards that were sanctioned by the SLMC.

News reports said that Vice Chancellors of the State medical faculties were urging students to return to their studies since a favourable solution has been given. While the committee headed by Dr. Harsha de Silva issued a statement on November 8, stating that the government had decided to abolish SAITM and the ban on recruiting new students would continue, parents of SAITM students wanted justice for their children and the new solution will take that too into consideration.

One thing that stands out in all of this is that the government has no wish to take on the South Asian Institute of Technology and Medicine (SAITM), as it would immediately burden the already strained coffers of the Exchequer.

However, they also had no choice but to support this paid education formula and rightly decided on the not for profit solution, which is a world renowned international formula, that has also proved to be successful in Sri Lanka.

Therefore, a newspaper report on Friday, making the Government’s decision to run SAITM as a medical faculty affiliated to the Sri Lanka Institute of Information Technology (SLIIT) in the Malabe office, does not come as a surprise.

Government’s position

Minister and Cabinet spokesman Dr Rajitha Senarathna addressing the weekly cabinet meeting said, the decision made by the government was final and would not be changed under any circumstances as the GMOA and Deans of all Medical Faculties have accepted it as fair. He has also said, the government had no intention of dancing to the tune of any saboteur in this regard, and had no reason to backtrack.

Deputy Minister Harsha de Silva, a day after the hunger strike was abandoned, clarified on his Facebook page that the government’s position on the matter was solid.

De Silva, commenting on his discussions with the hunger strikers, said, “I offered clarifications on the section on the abolition of SAITM as per the President’s communique on the solution to the SAITM crisis. There were suspicions on the ‘abolition’ due to various statements by various people. But it is clear in the October 29 government statement that (abolition) in fact was the position. And that all assets and liabilities as well as students will be taken over by a new non-state and not-for-profit entity upon agreement of current shareholders, financial institutions that have lent money and the to be agreed new entity. And thereafter SAITM will no longer exist.

“So, last night I explained that all current SAITM students will be absorbed to a special purpose vehicle of sorts that will have a specified sunset clause. And that they will continue their education over the remaining period. No new students would be admitted to this ‘sunset’ entity. After all current students complete their education, it would cease to exist.

“I was pointedly asked the question as to whether the Government was trying to mislead the students by saying SAITM will be abolished but in fact attempting to establish a new entity and it was just a change of name? I said, I was not here to mislead nor to lie; that the government position as articulated in the October 29 communique is to establish a non-state not-for-profit entity that meets the (to be legislated) Minimum Standards. But, that is separate from abolishing SAITM. Both will happen over a period of time; and the new entity will begin after meeting compliance conditions of Minimum Standards. Anyway, we agreed to delink the two issues as that was out there in the future, not last night.

It was indeed a mature political discussion where we all agreed on the abolition of SAITM. Of course, certain groups (who oppose any non-state higher education) were not in agreement of the envisaged medium-term outcome. But, we agreed that in a democracy we have the privilege to express differing views.”

SLIIT and Not for Profit

The SLIIT is a leading degree awarding institute approved by the University Grants Commission (UGC) under the Universities Act. A non-state institute, specializing in technology, engineering and business, SLIIT functions as a not for profit organization, awarding undergraduate and postgraduate degrees in computing, business and engineering.

They are members of the Association of Commonwealth Universities (ACU) and the International Association of Universities (IAU). It was also the first Sri Lankan institute to be accredited by the Institution of Engineering & Technology, UK. SLIIT currently accommodates over 7,000 students, including international students from various parts of the world.

Over 9,000 of SLIIT alumni have graduated from their three faculties of Business, Computer and Engineering going on to become software engineers, engineers, business analysts and noted entrepreneurs.

The Government’s confidence in SLIIT was clearly seen when the Finance Minister in his budget speech named them as one of the educational institutes that will support their ‘IT initiative’ which will be backed through a government sponsored angel fund of US $ 3 billion. He said, Colombo, Moratuwa and SLIIT universities will conduct training courses in artificial intelligence, machine learning and python development, in collaboration with the industry.

While the medical degree program of the South Asian Institute of Technology is being looked at by SLIIT to be absorbed as a non-state, not-for-profit, Medical Higher Educational Institute, Dr Rajitha Senaratne has further said that the government would soon announce a minimum standard for medical education.

Once this is done, each and every state and private sector medical faculty would be required to improve its quality of education, curricula and clinical training, accordingly.

Astronomical drug prices and sunshine profits

While looking at the SAITM solution where the government is seen to be bringing private medical education to middle ground, specialists in the Finance Ministry were looking at other parts of the health sector to find solutions to the growing drug prices. An in-depth study done by the Ministry has shown that market prices of essential drugs (even paracetamol) were astronomical in comparison to their real costs.

While Pharmaceutical companies have developed the vast majority of medicines known to humankind, it is also known that they have profited handsomely from doing so, and not always by legitimate means, according to a 2014 BBC report which shows the pharma industry as the highest profit maker across 5 key sectors, such as, media, car manufacturers, oil and gas and banking.

A 2016 Forbes report on the most profitable sectors in the US, says, Health technology and healthcare still remain the highest profit earner with major pharmaceutical companies ranking among the top ten. The situation in Sri Lanka, needless to say, is no different.

However, the national unity government, under the leadership of President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, made a highly progressive step in this regard, by ensuring the passage of the national drug policy in Parliament.

Successive governments in the past did not have the ‘muscle’ to proceed with the National Drug Policy, in the face of heavy pressure mounted by certain influential pharmaceutical companies earning monstrous profits at the expense of patients.

Even the government of former President Mahinda Rajapaksa, which often boasted about its ‘stern’ decisions and the bravado, could not resist the influence of this drug cartel which derailed the national drug policy initiative led by the then Health Minister Maithripala Sirisena.

The issue of the National Drug Policy was one of the major flashpoints between the Rajapaksa administration and Sirisena who later defected from the government and became the Common Candidate of the opposition.

It was President Sirisena who finally ensured the passage of the National Drug Policy in Parliament – within the second year of the National Unity Government. President Sirisena too, on several occasions said, certain powerful elements were attempting to sabotage and derail the drug policy process as it shrunk their avenues of income.

Who’s against drug policy?

In a press release issued by the Sri Lanka Chamber of Pharmaceutical Industries, its Chairman Shyam Sathasivam was quoted as saying that the price control of 48 drugs gazetted in October 2016, enacted almost overnight, caused severe disruptions and losses to the industry.

He had said that the loss which was more than Rs. 1 billion to manufacturers and importers of pharmaceuticals, had led to significant increase in defaults by pharmaceutical retailers and even closure or slowing down of SME pharma retailers and distributors.

The Pharmaceutical Chamber President, in his statement, also said, that the industry had slowly begun to recover their losses but enormous increases on all regulatory fees across the board had further impacted the entire pharma value chain, including small retailers, and that these factors have the potential for negative socio-economic repercussions at a national level.

He requested the Government to enter into consultation and collaboration with all key stakeholders in order to arrive at a fair and feasible pricing formula.

Sunshine profits

Last Thursday, local conglomerate Sunshine Holdings PLC, announced their first half profits for the financial year 2017/18. While the Group reported strong performances in their Agri Business and FMCG sectors, the largest contributor was its Healthcare sector accounting for 38 percent of their consolidated revenue of Rs. 10.3 billion during the six-month period. Interestingly, the healthcare sector of the Sunshine Group is being headed by Shyam Sathasivam, who happens to be the President of the Sri Lanka Chamber of Pharmaceutical Industry.

One must note that Sathasivam was referring to a loss of Rs. 1 billion across the entire industry and that the pharmaceutical business of Sunshine is allegedly not even 2 percent of Sri Lanka’s pharma industry overall. So, anyone can do the math to find out, what kind of profits the local industry makes.

However, the National Medicinal Regulatory Authority (NMRA), was not swayed by this as they were convinced that massive profits were being made across the industry. In fact, the decision of the NMRA to bring the price ceiling for essential drugs into effect, was highly commended by the WHO.

While the entrepreneurship of Sunshine Holdings has to be commended, we also need to count the cost of such success, can such profits be made at the cost of patients with low income levels; which also gives credence to sanctions the Government wants to bring to regulate the pharmaceutical industry.

Doctors and the Pharmaceutical Industry

Having said that, there are probably very good reasons as to why the pharmaceutical industry needs to have such high profits. It has been reported both locally and overseas that marketing budgets of pharmaceutical companies are huge as they need to ensure that doctors prescribe their medicine.

A 2008 Guardian report says that in the UK, the scale of pharmaceutical company sponsorship of gifts and donations, show considerable largesse according to hospital records. This was apart from the all-expenses-paid trips to conferences in various exotic parts of the world on a regular basis that cost companies large amounts of money per doctor. The report says that many of the declarations by doctors did not put a price on the trips they made.

From a local perspective, the same allegation has been levelled at some pharmaceutical companies and doctors in Sri Lanka. Newspaper reports, on many occasions, have stated that of the numerous allegations, the common charge was that of pharmaceutical or drug companies resorting to bribery and corruption to get doctors to prescribe “certain” brands of drugs whatever the illness of the patient.

The news reports also referred to alleged sponsorships of annual conventions of the Sri Lanka Medical Association (SLMA) held in five-star hotels at a cost of several millions of rupees and scholarships given to doctors and family members.

Becoming a generic country

As a solution to all ills, and a way forward, President Maithripala Sirisena and the Minister of Health Dr. Rajitha Senarathna have ambitious plans of making Sri Lanka a country that produces high quality generic drugs. In line with that, a joint venture program under the Ministry of Health, is being set up to produce 100 percent of the generic pharmaceutical requirement of the country.

The government’s target is to reduce imports of pharmaceuticals by 70 percent by 2020, so that essential drugs would become affordable to the common man. Although doctors were asked to prescribe generic drugs, they continued to prescribe brands, as they claimed to doubt the quality of generics brought into the country. A part of the problem was that there were so many drugs coming into the country and the State Pharmaceutical Manufacturing Corporation (SPMC) not having the technical facilities to test all of them, a situation the Government intends changing.

Two quality control labs are also being set up under another joint venture with a Chinese corporation, which will allow the SPMC to do stringent quality controls and issue quality certificates for every batch produced. This is not only expected to bring down prices dramatically, but doctors would be able to prescribe the generic products with the backing of the SPMC quality certificate.

Already, a new pharmaceutical manufacturing plant ​is being set up in the Kandy Export Processing Zone. It will be the largest drug production facility in the country with an annual capacity to produce around 1.9 billion solid and soft-gel drugs, capsules and tablets. The manufacturing facility is a joint venture between Sri Lanka and Indian entrepreneurs with an investment value of US$ 6.6 Mn. It will also create employment for 150 workers including 80 university graduates. The company will be producing a wide range of tablets including Metformin, Losartan potassium, Atorvastatin, and capsules such as Omeprazole and soft gel Vitamins A, E and A & D.

Some private companies have already set up their manufacturing facilities and begun production. A plant in Pallakele is expected to start supplying by January, and an antibiotic plant in Horana with huge capacity, is also in the pipeline. Only one third of this plant’s production capacity would be required locally, which means they will be well placed to export as they already have an EU licence, and would be in a position to export to Europe in the future.

Ambitious plans

Apart from these, a 57-acre land is being developed into a pharma manufacturing zone in Welipenna, where there would be capacity for 17 plants. The zone will house infrastructure, lab and warehouse facilities and each of the plants set up are expected to be investments of between 500,000 - 100,000 US Dollars.

The plan is to supply 100 percent of 10 - 15 drugs out of the 48 that came under a price ceiling last year. This means, these drugs which are mostly used for lifestyle diseases like cardiovascular and diabetes treatment (high in demand) would become even more affordable to the public.

The Government has also considered the various skills required in the pharma manufacturing process and a special school has been set up by the SPMC to give training in the basics of manufacturing. The corporation has initiated this in order to ensure that there is a trained cadre for investors setting up plants in the country. Nearly 2,000 job opportunities are expected to open up with these manufacturing plants being set up, and the Government intends to secure these opportunities for locals rather than the investors having to import labour.

It is a fact that the private and public sector make profits from pharmaceuticals due to the health problems among Sri Lankans brought on by lifestyle patterns. However, the difference is that the State Pharmaceutical Manufacturing Corporation profits are ploughed back into the Corporation’s expansion activities.

It is important to understand that the SPC only manufactures 15 percent of the country’s requirement, while the current import value of pharmaceuticals is said to be Rs. 64 billion annually; hence, the Government’s plan to produce 100 percent of the total generic requirement by 2020 locally. This is a plan that will even out the stranglehold that international suppliers have on the pharmaceutical industry in Sri Lanka.


This week also marked Minister Mangala Samaraweera’s debut as Finance Minister and the presentation of his Blue-Green Budget, a well branded package which was not really meant to depict the coalition colours of the government, but to showcase a Blue-Green Economy, it would generate growth by utilizing what he called the much under-utilized ocean resources and facilitating the diversification of the economy with the adoption of new and sustainable technologies, especially, in agriculture.

Pushing this idea a little further on the blue side, the government as a whole may need to look into a Blue Ocean Economy, which is creating a new, uncontested market space that makes competitors irrelevant and creates new consumer value while decreasing costs. The solution for the SAITM issue and the local manufacture of pharmaceuticals seems to be moving in that direction.

Clear distinction between ‘criminals’ and ‘war heroes’

Investigating alleged war crimes and prosecuting military personnel are, without doubt, tough tasks for any government. Sri Lanka too grapples with this reality at the moment, as key international stakeholders, such as the United Nations Human Rights Council, expect concrete action from the Sirsena-Wickremesinghe government on the accountability front.

Making a clear distinction between ‘criminals’ and ‘war heroes’ is an important step in this exercise, President Maithripala Sirisena, addressing a representative gathering of more than 350 Commanding Officers (COs), Adjutants and Regimental Sergeant Majors (RSMs) of the Army, at the Colombo Army Hospital auditorium on Thursday, made his opinion clear on the matter.

“If there are errant Army officers, they can be produced before courts and tried according to the existing law of the country. Apart from that, no war hero would be asked to testify before foreign tribunals and foreign judges,” the President stressed, while addressing the event.

This is a clear indication that the Sri Lankan government has understood the difference between the real “war heroes” and criminals wearing military uniforms. It does not require a lot of wisdom to understand that those who operated ‘death squads’ in the past, under the directives of the bigwigs of the defence apparatus, were no different from underworld criminals.

“You have all dedicatedly come forward to safeguard the country, and in times of national disasters always at the risk of your own lives, for which we are indebted to you. In the most recent past, you stood by the nation and took the lead when national disasters, epidemics, landslides, struck the country. I need your continued support for the development of our country as we march forward as a peaceful society, rich with co-existence, reconciliation, harmony and understanding,” the President told the Army.

He asserted that no human rights organization would be allowed to exert pressure on the Sri Lankan military forces. The President said, the UN had been informed of Sri Lanka’s ability to find solutions to the country’s internal problems, without any foreign interference.

The President urged the Army not to be misled by various statements by the government’s detractors and some ‘embittered’ political elements.