Turning Sri Lanka into a pharmaceutical manufacturing hub a practical, feasible plan

Sri Lanka already has the building blocks for a competitive pharmaceutical sector: a functioning regulator (NMRA), an existing state manufacturer (SPMC), targeted investment incentives and growing political support for export-led growth.

- SHAMAL FERNANDO

But the country imports the vast majority of medicines and exports only a tiny fraction. If the government pursues a focused, realistic strategy — regulatory strengthening, targeted incentives, infrastructure and skills investments, industry clustering, and export market entry — Sri Lanka can scale local manufacturing for domestic security and become a regional supplier of selected generics, niche formulations and traditional/herbal products. The payoff: lower import bills, jobs, higher-value exports and stronger regional supply-chain resilience.

eSupply & demand: Sri Lanka’s market is small but growing — estimates put the market near USD ~0.7-0.8 billion by mid-decade, while local manufacturing still meets a minority of demand and exports are tiny (low millions USD). Imports remain the major source of finished medicines and APIs.

e Institutions: The National Medicines Regulatory Authority (NMRA) regulates manufacture, import, quality assurance and clinical trials — a major advantage if used as the backbone of an export-quality system. The State Pharmaceuticals Manufacturing Corporation (SPMC) exists as the state producer and manufacturing anchor.

e Investment framework: The Board of Investment (BOI) and investment guides offer fiscal incentives and capital allowances for manufacturing projects; new FTAs/agreements (e.g., Thailand FTA) expand market access opportunities.

1. Contract manufacturing / toll manufacturing for regionally focused generics. Lower-cost, high-quality generic tablets & capsules for small molecule drugs (off-patent India-origin molecules) where Sri Lanka can compete on cost and service.

2. Specialty formulations & packaging (high-margin): modified-release, pediatric syrups, sterile eye drops and consumer health products (OTC, nutraceuticals, herbal formulations). These require less API heavy investment and can command higher margins.