A Study in the Rise of Drug Prices in Bangladesh|Spring-Stars|IUB|Spring-2012

INTRODUCTION

In Bangladesh the pharmaceutical sector is one of the most developed hi-tech sectors within the country's economy. After the promulgation of Drug Control Ordinance - 1982, the development of this sector was accelerated. The professional knowledge, thoughts and innovative ideas of the pharmaceutical professionals working in this sector are the key factors for this development. Due to recent development of this sector it is exporting medicines to global market including European market. Two organizations, one government (Directorate of Drug Administration) and one semigovernment (Pharmacy Council of Bangladesh), control pharmacy practice in Bangladesh. The Bangladesh Pharmaceutical Society is affiliated with international organizations International Pharmaceutical Federation and Commonwealth Pharmaceutical Association. The 261 pharmaceutical companies operating in the country manufacture drugs under more than 2,200 brands. With a combined annual sales turnover of more than Tk. 10,000 core, they meet 97 per cent of local demand and export pharmaceutical products to more than 65 countries such as India, China and European countries. The rapidly growing pharmaceutical now exports to nearly 80 countries including United Kingdom, Belize, Costa Rica, Guatemala, Comoros Islands, Eritrea, Gambia, Ghana, Kenya, Libya, Malawi, Mauritania, Afghanistan, Bhutan, Cambodia, Hong Kong, Iraq, Macau, Malaysia, Myanmar, Nepal, Papua New Guinea, Sri Lanka, Tajikistan, The Philippines, Vietnam, Yemen etc. The top pharmaceutical companies (based on market share) are Square Pharmaceuticals, Incepta Pharma, Beximco Pharma, Acme Laboratories, Opsonin Pharma Ltd, Eskayef, Reneta Pharma, Advance Chemical Industries (ACI), Aristopharma and Drug International etc. Recently Pharmaceuticals have significantly increased medicine prices of their drugs and a few of them increased the prices by almost 50 per cent. In 1994 the government has set maximum retail prices (MRP) of only 117 listed generic drugs but the prices of the rest of the drugs are fixed by the manufacturing companies. No government has taken steps to increase prices of drugs since 1994. For the time being at least 50 those fixed priced drugs have not been producing now, in other word those are not available in the market. Moreover, there are rules to adjust the prices once a year considering government declared inflation rate and the rate of US dollars. The pharmaceutical industry owners, however, claimed that the prices of some drugs were hiked as raw material import has become costlier because of the appreciation of the dollar. The government must now enact laws to make the Drug Administration effective for controlling prices of all drugs on the market and increase the number of personnel for monitoring the pharmacies. Also severe punishment must be meted out to the companies that raise prices without justification and approval of the Drug Administration and sell defective drugs.

1| P a g e

A Study in the Rise of Drug Prices in Bangladesh|Spring-Stars|IUB|Spring-2012

OBJECTIVES

The goal of this study is to bring about how unethically the pharmaceutical industries are operating their business. Spring-Stars plans to help to improve the position on health of nations by upholding the current situation to the nations and government. Some activities are required and by all of those activities we belief nearly we can see our valuable pharmaceutical industries at an ethically standard and in a government controlled position. Main objectives in this study of drug price increase in Bangladesh are following: To find the reasons behind the increase in drug price by the pharmaceutical companies. To find/check whether the pharmaceutical companies ethically and legally increasing the price or not. The comments by the Pharmaceutical Companies, Government Authority, Public and the Drugstore. Describing how the society is losing benefits by those unethical practices based on Utilitarian theory, Rights and Justice point of view. We have described all of the above issue throughout this paper and we have tried to show how the pharmaceutical companies are fixing the price without government control as well as how the public is suffering.

METHODOLOGY

This study involved in understanding the current situation of pharmaceuticals and the reasons behind the rapidly increase in drug price. There are significant findings which we have collected by working intensively. Collected and analyzed primary information through market visit, interviewing customers, pharmacy, and pharmaceutical companies as well as media representatives. Collected the primary information from government authority. Collected and analyzed secondary information/data from published research documents, newspapers, and other media. Collected additional Secondary information from Internet and printed resource. Based on those evidences we have found the issue about how unethically and illegally the pharmaceutical companies increasing the price of drugs even in life-saving medicine and without any consulting with government authority as well as without any control by government.

2| P a g e

A Study in the Rise of Drug Prices in Bangladesh|Spring-Stars|IUB|Spring-2012

VIEWPOINT BY RESPRCTIVE PARTIES

The prices of life-saving drugs are increasing seemingly due to costlier imports of raw materials and the depreciation of the taka vis--vis foreign currencies. Poor patients are the worst sufferers of this pricing disorder. Prices for most of the pharmaceutical products are on an upward trajectory, while drug traders blame manufacturing companies for the rise in the retail prices of almost all the drugs. Pharmacists say the prices of a large number of drugs, most of which are commonly used, have gone up since February 1, 2012 without the manufacturers having notified them about a possible price increase. Indications are that some other drugs will soon become pricey. Drug Manufacturers claim they have to revise the prices of essential drugs, from time to time, with the approval of the DGDA and the ministry concerned, because of the increase in raw material prices, depreciation of the taka and a hike in VAT and tax rates. Drug companies willing to increase prices need to apply to the DGDA; the committee headed by the health secretary approves it, if the increase is found to be logical, the high official said. The committee of the DGDA and representatives of the consumers association, Bangladesh Medical Association and Bangladesh Association of Pharmaceutical Industries (BAPI) last met in the end of August 2011, to approve the price increase. The increased prices of 30 items were approved at that meeting. The Health Minister said the government will take initiatives to check the unbridled increase in the prices of medicines. Bangladesh Association of Pharmaceutical Industries (BAPI) claim drug prices are always increased with due approval of the DGDA and the number of drugs that have witnessed a price increase is rather small. They also say the cost of raw materials has gone up 25 per cent due to the depreciation of the taka. Earlier, they bought a dollar at Tk. 70 and now they shell out Tk. 83 for the greenback. That is why we have been forced to increase the prices of some of our products. Deputy Director of the Directorate General of Drug Administration (DGDA), Salim Bharami said The maximum retail prices of only 117 listed generic drugs are set by the government and the prices of the rest are fixed by the manufacturing companies, although the price fixing committee of the DGDA always monitors the prices. We always ask the companies to fix the prices of life-saving drugs rationally he also added. President of Consumers Association of Bangladesh, Quazi Faruque, said that most of companies had increased the prices of their drugs and a few of them increased the prices by almost 50 per cent. Consumers are helpless about the increase in medicine prices while many physicians prescribe drugs of different companies in an underhand dealing with

3| P a g e

A Study in the Rise of Drug Prices in Bangladesh|Spring-Stars|IUB|Spring-2012

medical representatives. He observed that the price increase was severely affecting consumers. Some consumers criticized the price increase saying that pharmaceutical companies were often exempted from paying the 15 per cent value added tax. The general customer are hard to accept this anarchy in medicine sector, ShohelyAkhter, mother of an ailing son, said, My monthly expenditure on drugs was Tk. 2,000 just two months ago, but, now, I need to spend at least Tk. 4,000 a month on medicines for my son, who is suffering from a haematological complication. The pharmacy also is accepting this abnormal increase of drug price, Solaiman Mia, a salesman at LazzPharma, The maximum retail prices of drugs were hiked about two months back, but the prices of most of drugs increased after the first week of February. Earlier, LazzPharma sold Avolac syrup at Tk. 100 and the medicine now sells at Tk. 120, the salesman said, adding, other companies have also raised the price of the same generic drug. He said Square Pharmaceuticals had increased the prices of their 250 products, ranging between Tk. 30 and Tk. 50 per box. From the above discussion it is clear that some are the point to increase the drug price, but how much? The appreciation of dollar is only 18.57% ($70 to $ 83) but the pharmaceutical companies have increased the price 25% and in some cases it rose to 50%. Moreover, the companies does not notify before increasing the price, not only 30 medicines every medicines price they have increased. The silent attitude and corruption by the Directorate General of Drug Administration (DGDA) is one of the main reasons for this Anarchy by pharmaceutical companies. Sources in the drug administration said the price fixation committee always pitched for a rational increase in the prices. Government officials might also be involved in corruption, said Prof. ABM Faruque, head of pharmacology department of University of Dhaka. Through our study we also find that the retailers also increase the price with their association. In our country most of the company gives 10% commission to the retailer. Company directly supplies their drug to the retailer. For this reason company use two types of representative. One is market representative and another is sell representative. Market representative promoted their product and sell representative collect order from the retailer. And company supplies their product. This total process controls the company dipo manager. But the main problem is companies maintain only supply chain management they cannot control the price. So, most of the time retailer unethically increases the drug price. For example: Suppose 25 retail drug shops in Uttara. The all retrial drug shop owner arrange a meeting and they decide they increase every drug price is 5%. If any shop violate this rule Uttare retail drug association fine BDT 10,000 which also contributes to increase the consumer price.

4| P a g e

A Study in the Rise of Drug Prices in Bangladesh|Spring-Stars|IUB|Spring-2012

PRICE COMPARISON
Price of some life-saving drugs has also marked an abnormal increase and the poor cannot afford to buy such essential drugs. The meeting held at the end of August 2011 by associated parties, has increased prices of 30 items. Drug prices can be raised in proportion with the increase in dollar price, freight, packaging cost etc, but the recent shoot-up in the prices is not acceptable. By visiting the market we have collected randomly some medicine price for checking and uphold that anarchy to the public.
Price Comparison Table based on Actual Data

Sl
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Drugs Name
Tofen 100 mg Omep 20 mg Angilok 50 mg Dibeno 5 mg Antacid max 400 mg Prozo 20 mg V- plex- vitamin 15 ml B-50 injestion B-50 capsuls Osartil-50 Osartil-50 plus Pantonix-20 mg Pantonix-40 mg Amadocal-5 mg Amadocal-10 mg Amadocal-50 plus Neoceptine-R Entacyd Lithosunsr 400 mg Seclo 20 mg Lescol xl 80 mg Average Increase

No. of Tablets
10 10 10 10 10 10 15ml

Price Before 3 Months

15 40 60 60 12 20 15 5

Present Price
20 50 80 70 20 30 22 10 10 80 80 40 60 50 70 80 25 65 50 50 550

Increase Price
5 10 20 10 8 10 7 5 4.5 20 20 10 10 10 10 20 5 30 10 13 80

Percentage Increase
33.33% 25.00% 33.33% 16.67% 66.67% 50.00% 46.67% 100.00% 81.82% 33.33% 33.33% 33.33% 20.00% 25.00% 16.67% 33.33% 25.00% 85.71% 25.00% 35.14% 17.02% 39.83 %

10 10 10 10 10 10 10 10 10 200ml 10 10 10

5.5 60 60 30 50 40 60 60 20 35 40 37 470

From the above table its clear that some of the medicine price increase 100% and some of the medicines price rose to 50%. Moreover, the average increase of drug price is about 40%.

5| P a g e

A Study in the Rise of Drug Prices in Bangladesh|Spring-Stars|IUB|Spring-2012

INCREASED PIECE: ETHICAL PERSPECTIVE

The increase of price in drugs especially in live saving drugs is not only unethical but also it is an illegal activity. The monopoly attitude of the pharmaceutical companies deviates from the ideals of capitalist justice, economic utility and negative rights. Utilitarianism Point of View: The main concept of the utilitarianism is to maximize the benefit and minimize the harm/cost. The present consequence, however, is just opposite of utilitarianism principle thats maximizing the harms and minimizing the benefits. The customer is not getting the benefit in return of their expenses equally; the consumer has to pay more than the actual price. As a result, the society is losing the benefits, as the pharmaceutical companies are imposing more cost on society. Rights Point of View: Increase in drug price is violates the both the Moral Rights, Negative Rights as well as the Positive Rights. The pharmaceutical companies has adjusted its price at higher than logical so only the patients/customer who has the ability and highly necessity of such drugs are going to pursue those medicines. The poor people/patients who has highly necessity of medicine but is not getting those desire medicines because of financial inability is violating the peoples right to pursue their interest. The authorized group like the government and the Drug Administration is not supporting to control the medicine price is also violates the peoples rights. Moreover, from the moral point of view it is violates the peoples right as the medicine save the life so every peoples should have the right to get the medicine without facing any dishonesty. Justice Point of View: Where the increase in drug price is opposite of human rights and utilitarianism so it is normal that it also separated from justice. The main concept of Capitalist Justices is that what each person receive should equal to what s/he is has paid. However, the people is paying much more that they are actually getting from the pharmaceutical companies which is injustices. Finally, the people living in any society have the right to maximize the utility, and should have the right to know the particulars or the relative issue with those have impact on their live. Not only those but also the respective parties like government and other administrations should provide the support to the peoples with the rights to live with maximum utility, with rights an obviously with justices and fairness.

6| P a g e

A Study in the Rise of Drug Prices in Bangladesh|Spring-Stars|IUB|Spring-2012

FINDINGS OF THE STUDY

Our public health -care sector is falling behind with less health-care services for the people of the country at affordable prices and also free of charge. We are also observing recent rise in prices of medicines manufactured by the local pharmaceutical companies. In recent we have seen that some essential drugs have almost doubled in price. Which have also creates a serious burden for the general public especially to the poor people. Thorough our study the more specific findings are as follows: Prices of life-saving drugs have shot up phenomenally across the country and these have restricted patients access to their medicines and left them to the whims of pharmaceutical companies. While thousands of patients, in the wake of steep price hike, are steering clear of expensive medicines, the Directorate of Drug Administration that has the responsibility of monitoring the drug market in regard to price and quality seems to do nothing in lowering the costs and ensuring access to medications for commoners. No government has taken steps to increase prices of drugs since 1994 when they fixed prices of 117 commonly used drugs. But there are rules to adjust the prices once a year considering government declared inflation rate and the rate of US dollars. The concerned government authorities and the Drug Administration have not been monitoring regularly the sales prices of the drugs on the market. Pharmaceutical companies raising the medicine prices without governments approval. The MRP has not been approved by the Drug Administration before placing the drugs on the market. The pharmaceutical companies are justifying their price rise saying that reasons behind the rise in price is due costlier import of raw materials because of Taka depreciation increase of import prices and customs duties. But in actuality the consumers are observing a steeper rise in prices than that warranted by the rise in imported materials prices and the devaluation of the taka. Among the 117 fixed priced items over which the drug administration has the authority, at least 50 items are no longer available on the market. Besides those findings, another remarkable issues that the pharmaceutical companies blaming the depreciation of Taka to increase the drug price. But the US dollar price only rose 18.57 percentage while they have increase the price more than 18.57% and in some case becomes double. Moreover, the triviality of government and the bribery of the government authority have made this situation more serious.

7| P a g e

A Study in the Rise of Drug Prices in Bangladesh|Spring-Stars|IUB|Spring-2012

RECOMMENDATIONS OF THE STUDY

Pharmaceutical drugs in Bangladesh have advanced much in quality, variety and quantity, due to the qualitative advancement of the Pharmaceutical companies. Some of our drugs are being exported abroad on a regular basis. But we are now faced with a situation where our Drug Administration is unable to tame the drug producers. The rapidly increase in medicine caused many patients have already decided to go without medication or stopped taking the prescribed doses endangering their lives. Many buyers who come to buy medicine are going back without buying. These people do not know why drugs are much more expensive now than they were before. However, thorough our study we have reached some recommendations which are as follows: The consumers have to verify the selling price inscribed on the packet while buying medicines from retail shops. An active monitoring by the Drug Administration and re-fixing of prices after taking into account the increased prices of the imported materials used in manufacturing drugs have to be undertaken immediately. The healthcare sector in Bangladesh has to be efficient and price-sensitive to offer the optimum medical services for our people most of whom are poor. Re-fixing of drug price is urgent as the medicine price scenario is severely affecting proper health care and recovery of people from illnesses. The government should more strict to pharmaceutical companies to control price and quality. Government should fix all medicine and continuously should monitor. The pharmaceutical companies must justifying their price rise saying that reasons behind the rise in price is due costlier import of raw materials because of Taka depreciation increase of import prices and customs duties. The customer should more conscious, they should compare price by asking/visiting at least two/three pharmacy. The area based retailers union should be monitored and control by the government as well as the pharmaceutical companies. Finally, the immediate actions by the government as well as the corruption free actions by the drug administration and pharmaceutical companies only can play a crucial role to control the price.

8| P a g e

A Study in the Rise of Drug Prices in Bangladesh|Spring-Stars|IUB|Spring-2012

CONCLUSION
Whenever and wherever there are meaningful discussions to create better socio-economic conditions in the society or to make the world a better place to live in, the discussions invariably touch Business and Industry or Trade and Commerce also besides other areas of human activities. Those who run their business or industry on principles of honesty, integrity and justice are the ones who raise the prestige of their nation and are inspiring examples unto others. However, there are people who indulge into unfair, unjust, dishonest or socially harmful activities and do not believe in fair play and excellence. The price of a common medicine that commonly needed had gone up overnight by a hefty margin. Re-fixing of those drug prices is urgent as the medicine price scenario is severely affecting proper health care and recovery of people from illnesses. We look forward to immediate action by the government proposed by the Health Minister to rationalize drug prices.

9| P a g e