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Health Ministry spares substandard drug suppliers; no compensation for victims
View(s):The Health Ministry has failed to claim compensation from suppliers of substandard drugs, specifically concerning the prednisolone acetate eye drops, which resulted in 12 patients at the Nuwara Eliya hospital suffering allergies and becoming vision-impaired.
This was revealed in a National Audit Office (NAO) report annexed to the Health Ministry’s 2024 annual performance report presented to Parliament.
It also showed that medical supplies issued to government hospitals—including medicines and surgical and laboratory materials—worth Rs. 4.2bn were withdrawn from use due to poor quality in 2024, while another Rs. 1.36bn worth of other medicines were temporarily suspended due to poor quality.
Prednisolone acetate ophthalmic suspension is a common steroid and anti-inflammatory medication used after eye surgery in the state health sector. In 2023, the Health Ministry withdrew a batch of this medication—manufactured by India’s Indiana Opthalmics and supplied to the State Pharmaceutical Corporation (SPC) by Mumbai-based supplier Alvita Pharma—after it was found to be contaminated with the Burkholderia cepacia bacterium.
A total of 50,000 bottles worth Rs. 3.61mn were ordered by the Medical Supplies Division. Defects were discovered approximately one-and-a-half months after the stock was received in 2023.
While patients at the Colombo National Eye Hospital and the Nuwara Eliya District Hospital suffered allergies after the use of this drug, 12 patients in Nuwara Eliya became legally blind due to permanent visual loss in one eye, while three others suffered more than 70 percent vision loss.
The audit states that a committee appointed in June 2023 to investigate the incident held that failure to check the drug before distribution had caused serious harm to patients and said the manufacturer should be held accountable.
Other recommendations included ensuring that those affected received compensation through the company, incorporating provisions in procurement documents to obtain compensation for substandard medicines, and increasing random quality checks.
In February 2024, on Cabinet approval, a technical committee was appointed to determine the amount of compensation due to patients. The cabinet also directed the Health Ministry Secretary to take appropriate steps to obtain compensation for damages in accordance with common law.
However, as of April 10, 2025 (almost two years after the incident), the supplier company has failed to provide compensation to the patients concerned, the audit report states. Furthermore, no steps have been taken to obtain compensation through the company for those affected by the drug.
The SPC has also not yet taken steps to include provisions in procurement documents to obtain compensation from companies supplying substandard medicines, it points out. And no steps were taken to blacklist such suppliers.
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