Sri Lanka, the island country in South Asia, scores higher than the regional average in healthcare having a high life expectancy and a lower maternal and infant death rate compared to its neighbors.
Sri Lanka, is an island country in South Asia, located in Indian Ocean to the southwest of the Bay of Bengal and to the southeast of the Arabian Sea. It is separated from the Indian subcontinent by the Gulf of Mannar and the Palk Strait. The legislative capital, Sri Jayawardenepura Kotte, is a suburb of the commercial capital and largest city, Colombo.
Sri Lanka has a free and universal healthcare system. It scores higher than the regional average in healthcare having a high life expectancy and a lower maternal and infant death rate compared to its neighbors. The country is known for having one of the world’s earliest known healthcare systems and has own indigenous medicine system. OPD facilities are readily available in public hospitals situated in major towns and cities, with laboratory and radiology facilities common in most. All doctors and nurses in the government hospitals are qualified and trained, with some of the most experienced staff working at the teaching hospitals.
Despite low levels of health expenditures, Sri Lanka’s health indicators are comparable to more developed countries in the region. The public healthcare system also has long waiting lists for specialized care and advanced procedures. As a result, reliance on private care is increased.
Medical equipment & pharmaceuticals
Asia has the fastest growing medical device market in the world due to the vast population of the region and the rapid expansion of the healthcare industry.
Although US companies have had difficulty entering these markets in the past, government regulations are relaxing to allow more private investment and loosen regulatory hurdles.
Developing Asian markets have high growth potential in the future compared to more mature markets in Europe. Many markets deemed as ‘developing’ have highly urbanized population centers with rising expendable wealth, making certain sectors of markets attractive to US companies.
Demand for healthcare services is rising due to an ageing population. Nearly sixteen percent of the population was 65 years of age and over at end-2016 and that figure is likely to double by 2030.
The government continues with its policy of providing free healthcare at public hospitals. The government expenditure for the health sector was approximately $1.2 billion in 2016. The increased burden for public health care provides opportunities for private sector operators to expand their presence in this sector.
Increasing access to private health services is also a focus of the government, as it is difficult for the public sector alone to meet the demand for healthcare services. The private sector has invested considerably in healthcare, especially in Colombo and some of the major cities, which has eased some of the burden for the state. The demand for private sector health care has increased with higher income levels and changing preferences. The provision of health insurance has also supported the growth in the private health care sector. However, in October 2016, the Government of Sri Lanka issued regulations setting maximum retail prices for 48 medicinal product formulations.
The success of Sri Lanka’s health sector is largely due to its effective public delivery system, which provides both preventive and curative care at low cost. Government- provided healthcare is free for all citizens and accounts for almost all- preventive care and most in-patient treatment.
Public vs. private sector
Approximately 70 per cent of that market share is held by the private sector while public institutions hold the remaining market share. According to pharmaceutical industry experts, the local pharmaceutical industry has grown at a rate of about 15 percent in the past five years and the industry has good prospects for high- volume growth in the future.
The government is encouraging investment in the pharma sector to manufacture drugs locally. Registering of drugs can be time consuming with extensive details required by the authorities. Dismissal of local agents by foreign principals is also complex as the agent has to provide a no objection letter to the authorities for a new agent to be appointed.
The Cosmetic Drugs and Devices Regulatory Authority regulates the pharmaceutical sector to ensure the quality, safety, and efficacy of drugs and medical equipment. Although many pharmaceutical imports are from regional sources, the higher quality and efficacy of Western manufactured drugs is widely acknowledged by medical practitioners and consumers.
Private hospitals in Colombo are equipped with up-to- date equipment, and these hospitals provide good opportunities for suppliers. Government tenders for equipment, pharmaceutical items, and projects represent other opportunities for foreign companies in healthcare. Engaging local representatives with experience in the medical sector and maintaining good connections to both public and private sector health providers are important for medical equipment suppliers to succeed. Diagnostic equipment, operating theater equipment, intensive care equipment, clinical analyzers, and hematology equipment continue to offer the best sales prospects for prospective firms.
The private health sector is likely to benefit from increased opportunities for medical tourism, which is still nascent in Sri Lanka. With the island’s rich tradition of Ayurveda medicine and the government’s focus on boosting overall tourism numbers, hospitals specializing in traditional medicine could increase their revenue by catering to tourists interested in alternative medicine.
Effective public delivery system
Sri Lanka’s expenditure on health (both public and private) was around 3.2 per cent of GDP, or $89 per head, in 2012, according to estimates by the World Health Organization. Despite this low expenditure, the health of the population has made great strides, with life expectancy rising from around 60 in 1960 to 74 in 2012, according to the World Bank.
Furthermore, the mortality rate for children fewer than five has fallen from 98 per 1,000 live births to 9.6 per 1,000 births in 2013. Many of its health indicators rival those of more developed countries in the region, such as Thailand and Malaysia. Thailand, for example, has a higher mortality rate for children under five and a similar life expectancy, but spends more than twice as much per head on health.
The success of Sri Lanka’s health sector is largely due to its effective public delivery system, which provides both preventive and curative care at low cost. Government-provided healthcare is free for all citizens and accounts for almost all-preventive care and most in-patient treatment. However, the public health sector has inadequate capacity, limited access to specialist treatment and inconsistent service standards.
The availability of complex surgical procedures and specialist care in the public sector is limited to the National Hospital of Sri Lanka in Colombo, the capital, and a few other large hospitals in major cities. The waiting list for this type of care is usually very long. In addition to a disparity in the available care between rural and urban areas, the health infrastructure in the north and east of the country is poor owing to damage caused during the country’s civil war.
Addressing these shortcomings is the primary role of the private healthcare sector, which tends to focus on the provision of curative, rather than preventive care, and is predominantly centered in Colombo, where disposable incomes are highest. The private sector provides around one–half of outpatient curative care
and around 5–10 per cent of inpatient care. Individuals pay for most private healthcare out of pocket, as health insurance is not widely available. Patients usually have to pay private institutions up-front for treatment. Non- governmental organizations have a very small role in the healthcare system, focusing mainly on family planning.
Healthcare demands to increase
Expenditure on healthcare has grown steadily. In the period 2005–10 Sri Lanka’s total expenditure on health is estimated to have grown at a compound annual rate of around 11 per cent, according to a local government think-tank, the Institute for Policy Studies. Private sector spending grew by 12per cent a year, while government spending increased by 10per cent a year in that period. Total spending on healthcare per head has risen from $49 in 2005 to $89 in 2012, according to the World Bank.
Healthcare spending is likely to increase owing to changes in lifestyles and demographics. The share of the population aged 65 years or older rose to around 14 per cent from around 8 per cent in 2013. As the population ages, the demand for healthcare will increase and it will require changes to the current system, which is heavily geared to improving maternal and child health and fighting infectious diseases.
Although many poorer citizens will not be able to afford private healthcare, rising incomes will mean that an increasing number of people will find the sector more attractive with its perceived benefits of faster, cleaner and more flexible service delivery.
Medical Tourism
The private health sector is likely to benefit from increased opportunities for medical tourism, which is still nascent in Sri Lanka. With the island’s rich tradition of Ayurveda medicine and the government’s focus on boosting overall tourism numbers, hospitals specializing in traditional medicine could increase their revenue by catering to tourists interested in alternative medicine.
The growth in both public and private healthcare, moreover, will increase the opportunities to export medical equipment and pharmaceuticals to the island. The opportunities for exporting medical equipment are likely be greater because the government imposes prices controls on all imported medicines. Although the island’s changing demographics and income growth are likely to allow for the expansion of private healthcare, the government will face growing challenges to continue to provide universal low-cost healthcare to the population.
The local pharmaceutical industry has grown at a rate of about 15 percent in the past five years and the industry has good prospects for high-volume growth in the future. The government is also encouraging investment in the pharma sector to manufacture drugs locally.
Pharma outlook
With the recent development, Sri Lanka’s aim of developing a pharma industry should be to penetrate the global market since the internal market is not sufficient for any big firm to operate at optimum levels. According to a report published by Indian Council on International Relations, the global market of pharma is about $1trillion, and India’s export of pharma products in 2013 amounted to $13 billion, where as Sri Lanka was nil. Hence, pharma industry offers a very valuable opportunity for Sri Lanka to diversif y its manufacturing and export base and thereby reach the goal of upper middle-income country by 2020 and a rich country by 2035.
The Sri Lanka Chamber of Medical Devices Industry (SLCMDI) appointed its new committee for 2018 at the 3rd Annual General Meeting held in Colombo recently. Speaking at the ceremony Minister of Health Dr. Rajitha Senaratne congratulated the efforts of the chamber and wished it success. He also stressed on the importance of local manufacturing of medical devices in a similar fashion to what was implemented for the pharma- ceuticals industry through the State Pharmaceuticals an d State Pharmaceutical Manufacturing Corporations.
In his inaugural address, President Eran Ranasinghe said, “The chamber represents the collective voice of the medical device importers. Since inception, over 40 members have rallied around the chamber, strengthening its progress. Our quest is to create lasting solutions to the medical devices industry in a regulated, equal opportunity & ethical environment. Representing the collective voice of the medical device importers, the chamber has a growing influence on national legislations. While the chamber does act as an advocate for its members on the various issues, it is also involved in championing issues affecting the medical devices importers at large.”
With over 400 registered importers, the demand for medical devices in Sri Lanka is expected to grow up to $165 million with a steady growth rate of 9.5 percent in 2018. The budget allocation for healthcare for the year 2018 in Sri Lanka is estimated at 178 billion rupees with over 8 billion rupees dedicated to the purchase of medical equipment for the government sector alone.
