सिंहदरबार संवाददाता
Kathmandu. Nepal Drug Limited, which is fully owned by the government, is facing a financial crisis due to the government’s own policy. The then Pushpa Kamal Dahal-led government had decided to produce 20 of the 98 types of medicines that were available free of charge.
For that, the Ministry of Finance had also formed a secretary-level committee to manage the budget of Rs 240 million. However, when the Limited started producing medicines, the financial assistance due to the change of government was stopped, resulting in a financial crisis.
Nepal Drug Limited General Manager Kailash Kumar Paneru said that although 10 of the 20 medicines have been produced, the government has not been able to receive the Rs 240 million that it promised. He said that there is a problem in producing additional medicines due to not being able to receive the budget from the government. In the absence of the budget from the government, the Limited plans to produce additional medicines with the money received from selling medicines.
General Manager Paneru said, “The then Prime Minister Pushpa Kamal Dahal had called us and formed a high-level committee to immediately produce 20 types of medicines and the government would invest in it. He had formed a team including the Industry Secretary, Health Secretary, Finance Secretary, etc. As directed by that committee, an agreement was reached that Nepal Medicines Limited would immediately produce 20 types of medicines and the Ministry of Finance would release the required Rs 240 million for that. 10/12 medicines are in RND. There has been a slight delay due to the lack of money from the Nepal government, otherwise we would have produced them by now.”
General Manager Paneru said that the Limited is meeting its administrative expenses and producing additional medicines from the production of Jeevan Jal and Citamol. He said that since the government is not providing budget, they are making the money received from selling medicines as their budget and increasing the production of medicines with the remaining money.
According to him, the Medicine Limited is currently manufacturing 11 types of medicines including MZID, folic acid, glycerin, sanitizer, distilled water. The Limited aims to manufacture medicines for cholesterol, sugar, pressure and others in the near future.
‘So far, we have manufactured 11 types of medicines including MZID, folic acid, glycerin, sanitizer, distilled water. Now we have medicines for cholesterol, sugar, pressure and others that are used for chronic patients. The plan to manufacture those medicines has already gone into planning. I think it will come to the market by the next fiscal year,’ he said.
Relying on Jeevan Jal and Cetamol
Nepal Aushadhi Limited currently depends mainly on the income generated from the sale of Jeevan Jal and Cetamol. But since the government itself determines its selling price, it is forced to sell it at a price below cost, said General Manager Paneru. He said that it is difficult to make a profit as the price of raw materials sometimes increases and sometimes decreases.
General Manager Paneru said, ‘We sometimes buy raw materials for three hundred rupees and sometimes for a thousand rupees. However, the selling price is set by the government, due to which we always remain at a loss.’ The government itself does not buy the medicines of the Limited, the private sector dominates the market
Although the medicines produced by the Limited are of high quality, additional problems have arisen when the government does not purchase the original medicines from the company it owns.
The government’s tendency to not purchase medicines itself, not providing budget and giving priority to the private sector has put the very existence of the Limited in danger. Currently, there are three levels of medicine supply in Nepal – the federal government, the provincial government and the local level.
Even though all of them purchase medicines worth crores, they give priority to private companies instead of buying from Nepal Limited, said General Manager Paneru. He said that while citizens are complaining that the government is not providing cetamol, they are distributing medicines by importing raw materials at high prices.
He said, “We are delivering 98 types of medicines that the government distributes free of charge. Now we are trying to sign an MOU with the health department. We will also write to the three levels of government to purchase medicines produced by Nepal Medicines Limited. We will also go ourselves. What will we do if the government does not buy medicines produced by a company that is fully owned by the government? Our medicines are of high quality. Therefore, the demand now is that the government should buy our medicines.’
The government should provide a solution by providing raw materials
General Manager Paneru clarified that since Nepal Medicines Limited is a government industry, it will not seek profits like the private sector. He said that although the aim of the Limited is to produce quality medicines and make them available to the citizens at an easy and affordable price, it has not been able to grow due to the high cost of raw materials.
He said that since the government did not provide the necessary raw materials to produce medicines, raw materials had to be imported from India, China and third countries. He said that since the Limited is capable of producing and distributing the 98 types of medicines that the government has promised to provide free of cost, the government should make the necessary raw materials available for that.
If the government’s policy is not favorable, the necessary budget is not provided, and government hospitals and agencies do not purchase the products of the Limited, it will be difficult for this Limited to survive, he said.
He further said, “The raw materials required for medicines are not produced in Nepal, all of which come from India, China and other third countries. The problem with that is that we have been paying the bank for 90 days to bring the goods we bring from India. If our financial situation was better, we could have produced the 98 types of medicines that the government has promised and given them to the citizens. But we have reached this situation due to financial weakness and the government not providing them even when we asked for them.” We have now reached an agreement with the Bagmati Province Government and Kathmandu Metropolitan City. If that happens, it will be easy for us.
Government control over drug prices should be removed
The demand is that the drug company itself should be able to determine the market price of the drugs it produces. He said that since the price of the medicines produced by the Limited is fixed as per the government’s directives, the fluctuation in the price of the required raw materials has created a big problem.
According to him, the disparity between the production cost and the selling price of the medicines due to the fluctuation in the price of raw materials has made it difficult for the Limited to rise.
He said, “The government sets the price of Jivanjal and Cetamol, but the price of the necessary raw materials is so problematic that sometimes it is available for three hundred Indian rupees. Sometimes the same goods are available for one thousand Indian rupees. That raw material is not available in Nepal. But when we sell the medicines, the price is the same. We cannot sell them for more than one rupee, no matter how cheap or expensive we bring them. We have now renamed the medicine Cetamol. Citizens do not say that the government did not provide medicines, they say that they did not provide Cetamol. But as a government industry, we have also bought raw materials at high prices and given them to the citizens. Because we could not recover from the losses at that time, we have not been able to manufacture medicines in bulk even today.’
Need to ensure budget and government market
The government has not ensured the budget for Nepal Drug Limited, which is owned by it, and there has been a problem in producing more medicines. The General Manager of the Limited, Paneru, has demanded that the government ensure the budget to ensure the continuity of the supply of medicines produced by the Limited and to make the upcoming production plan successful.
Currently, the Limited has increased its production of medicines with a small amount of income from the sale of medicines without expecting the government’s budget, but it is not enough. He said that the company has faced problems in drug production and supply as the government has not ensured the budget. He said that due to the lack of budget, even sending employees who are eligible for retirement is a problem due to financial problems.
He added, “The private sector has the right to give bonuses. They have the right to set the market price. Therefore, we cannot compete with the private sector. We could not immediately retire government employees and we have not been able to change them. If we could have sent them home and employed new manpower, our expenses would have been significantly reduced. Second, we have not looked for the private market. If the government buys drugs from a government-owned company, then the government’s money will go with the government and it will be easier to run the drug company.” That is why our current demand is this.’
Although the Limited has increased its drug production capacity in recent times, due to the lack of necessary support from the government, the production of Jeevan Jal and Cetamol has had to be curtailed. If the government manages the budget for the government-level drug manufacturing industry and arranges the necessary raw materials, crores of rupees will be prevented from going abroad and consumers can get quality drugs.
Now is the time for the government to think – should it support the government-level drug manufacturing industry or encourage the private sector?
The government does not even have data on drug production in Nepal. Drug traders claim that 48 percent of Nepal’s drug production demand is met by domestic production.
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