How reasonable is the eye-watering surge in drug prices?

An expert, along with consumers, has questioned the big jump in the prices of the pharmaceutical products

Marium Sultanabdnews24.com
Published : 11 Sept 2022, 10:12 PM
Updated : 11 Sept 2022, 10:12 PM

Zerin Afrin, a private bank employee in Dhaka, has her parents living in a small town in the southern coastal region of Barguna. The family spend around Tk 12,000 every month on medicines because both of her parents are ill.

Zerin’s father was a government employee and retired only five years ago. With all his pensions spent mostly on food and other costs, it was difficult for him to pay for the drugs.

Zerin is feeling terrible because she cannot support her family financially yet while prices of medicines have gone up along with other products. Zerin’s family is one of the many struggling to buy medicines.

In Dhaka, customers appeared surprised, seeking answers from the shopkeepers. “A bottle of Napa syrup for babies costs Tk 35 now. How can the situation be so bad?” said a customer at Shifa Pharma in Farmgate.

“Sometimes the customers think that I'm lying. Then, I show them the MRP on the packet," said Shiplu, the pharmacy's shopkeeper.

Paracetamol, marketed by Beximco Pharmaceuticals as Napa, is one of the most consumed drugs in the country but the price of a 60-millilitre bottle has increased by 75 percent to Tk 35 from Tk 20 recently. The prices of some other medicines have doubled.

In the middle of July, the Directorate General of Drug Administration, or DGDA, increased the prices of 53 types of essential medicine of 20 generics at rates ranging from 5 percent to 100 percent.

Along with the consumers, an expert has questioned the big jump in the prices of drugs.

Officials of the pharmaceutical companies and the DGDA stressed a variety of factors, including the rise of the US dollar used for importing raw materials. They also argue that the prices have not increased in the past seven years.

Professor Syed Abdul Hamid of Dhaka University’s Institute of Health Economics refuted the claims made by the officials.

"The price of Napa syrup cannot go up Tk 35 from Tk 20 only because of the dollar’s rise. There is no logic behind this. Actually, they [companies] have raised the price by a huge margin because they want to cover for the low rates in the past few years.”

THE REASONS BEHIND THE SUDDEN SPIKE

According to the Price Fixation Policy 1992, the government can set the price of 117 generic medicines listed as essentials.

The cost of certain medicines must be adjusted yearly in accordance with the policy, but the prices have been revised three times only, with the last one in 2015.

As the prices were not raised in the last seven years, the companies applied to the DGDA recently for a price hike.

Finally, on Jun 30, the Technical Sub-committee and Price Control Committee of the directorate set the maximum retail price of 53 products of 19 generics, including paracetamol, based on the average price of imported raw materials and packaging materials over the previous six months.

Speaking about the price increase, DGDA spokesperson Ayub Hossain said the increase in the prices of raw materials and packaging materials was the only factor that was taken into account when adjusting the prices. But the markup did not change.

DOLLAR PRICE HIKE HITS PHARMACEUTICALS

Even though the cost of raw materials increased during the Covid-19 outbreak, the price of these medicines was not raised by the government. But, if the price hadn't been increased this time, the pharmaceutical companies would have faced huge losses, said Ayub Hossain.

“What’ll the government do if none of the manufacturers sells paracetamol? It’s also our duty to keep the supply normal.”

He claimed the companies are still in a tight spot over paracetamol’s availability.

Along with the price of dollars and raw materials, he also discussed the rising cost of packaging materials such as blisters, bottles, and ampoules at that time.

WHAT COMPANIES SAY

Although the prices of some medicines have doubled, the manufacturers say the hike is less than what they need because the adjustment was made when the dollar was sold at Tk 95 while now the rate is around Tk 110.

Abdul Muktadir, managing director of Incepta Pharmaceuticals, claimed that as a result of the rise in the value of the dollar from Tk 85, their import costs have increased by 29 percent.

In addition, he said, the gas shortage has forced them to use costly diesel to run their factories, which has driven up fuel expenses by 54 percent.

Muktadir, who is also senior vice-president of the Bangladesh Association of Pharmaceutical Industries (BAPI), defended big spending on marketing, saying no doctor would prescribe their drugs unless they are marketed.

He said the marketing strategy is also good for the local firms because, in the absence of the aggressive marketing policy, the multinationals would have entered the market.

Managing Director of Globe Pharmaceuticals Limited, Md Harunur Rashid said about 25 percent of their expenses are used for marketing. "All over the world, a certain amount has to be spent on marketing to create the competition which keeps the prices under control.”

He added that they cannot promote pharmaceuticals through the media, so they must methodically approach doctors.

Rabbur Reza, chief operating officer of Beximco, said everyone is talking about the hike while no one spoke for the manufacturers when the prices decreased or remained unchanged for years. “That's the other side of the coin."

He claimed they have reduced the prices of at least 19-20 medicines in the last two years. "Even though we import raw materials, we still have the cheapest rates in the world.”

Reza also said it would not have constituted a big jump had the government adjusted the prices annually in line with the law.

IS THERE AN ALTERNATIVE?

Professor Hamid said the companies could be forced to cut back on marketing to reduce costs.

He suggested the firms could provide the doctors with samples and focus on supplying quality products instead of giving them gifts.

Professor Dr Sayedur Rahman Khosru, the chairman of the pharmacology department at Bangabandhu Sheikh Mujib Medical University, believes there is another way to reduce the prices.

If the government bought some of the medicines and distributed them at a lower rate, the prices of other companies’ products would go down automatically, he said.

"Assume the government has decided to buy four out of 22 brands of painkillers. The prices of the 18 others would decrease automatically.”

Toufique Imrose Khalidi
Editor-in-Chief and Publisher