The political economy of controlling transnationals: The pharmaceutical industry in Sri Lanka (1972–1976)

This paper analyses the experience of Sri Lanka in reforming the structure of production, importation and distribution of pharmaceuticals, a sector dominated by transnational companies. It traces the complex interplay of economic, political and ideological factors that affected the process of regulating transnationals and of establishing a State Pharmaceuticals Corporation, stressing the role of the medical profession in resisting reform and of political leadership in initiating and, later, retarding it. Sri Lanka's experience offers valuable lessons for understanding the transnational phenomenon in general, and the difficulties of reforming the pharmaceutical industry in particular: it also illustrates clearly the advantages that developing countries may gain from such reform.