BANGLADESH-ECONOMY: Pharmaceutical Companies Want Controls Lifted

By IPS Correspondents Reprint | | Print |

Tabibul Islam

DHAKA, Sep 30 1996 (IPS) - Once dependent on imports and transnationals, Bangladesh is now a leading producer of pharmaceuticals which are in growing demand in world markets.

The credit for this is widely given to the 14-year-old drug policy which banned a range of unnecessary and expensive medicines whose production was monopolised by foreign companies.

But having prospered under the 1982 drugs policy which is hailed as a model for the developing world, a section of the local pharmaceutical industry, backed by influential politicians, is now complaining.

Controls on manufacture and pricing under the policy must be lifted because these are bad for the future growth of the industry, some of the biggest companies demand.

The President of the Bangladesh Pharmaceutical Industry Association, Salman F. Rahaman, a top pharmaceutical manufacturer, says the controls on raw material imports are blocking the further growth of the industry.

He is supported by former Finance Minister M. Saifur Rahman of the main opposition Bangladesh National Party who maintains that drug prices should be freed of government control and be determined by the market. The government’s role should only be to ensure drug quality, he thinks.

But Zafrullah Chowdhury, one of the architects of the 1982 policy — he was one of the nine experts who framed the guidelines — counters these charges. If the policy is not good, how could the local drug industry have done so well, he asks.

Supporters of the policy point out that if discarded it would lead to manipulation of prices by producers, making essential drugs unaffordable for the common people in one of the world’s poorest nations, where only a fifth of the about 120 million people are estimated to have access to modern health care.

Among its supporters are the World Bank, the U.N. Children’s Fund (UNICEF) and the World Health Organisation (WHO) who had advised former Premier Khaleda Zia’s government against scrapping the drug policy.

In a joint letter to Bangladesh’s Health Ministry, the resident chiefs of these bodies said the 1982 drug policy was admired the world over as a progressive measure.

“While no one would deny the need for periodic revisions of such a policy, there seems to be unanimity among international health experts that this policy has had a major positive impact on the health situation of Bangladesh with favourable consequences for the economics of the pharmaceutical industry,” the letter said.

It is agreed by all that the 1982 policy did wonders for Bangladesh’s local medicine industry. Last year, some 190 companies including seven transnationals produced medicines worth more than 237 million dollars.

But not long ago, the bulk of medicines were imported or made by foreign companies. Over the last 10 years, Bangladesh has shaved 186 million dollars off its drugs import bill, say health ministry officials.

A year before the policy was announced, nearly two thirds pharmaceuticals were produced by eight foreign companies which supplied eight out of every 10 medicines sold in the country. By the year 1991, more than 60 percent drugs were made by national companies.

The quality of local medicines has improved over the years. In 1981, more than a third of the drugs made in the country were substandard, but 10 years later, less than a tenth of the samples examined by the National Drug Testing Laboratory were found below the mark.

By banning more than 1,600 brands as unnecessary and harmful, the drug policy limited production to essential medications which are now more easily available and cheaper.

Though the consumer price index rose by more than 170 percent in the decade following the announcement of the policy, the retail price of 25 major drugs increased by an average of just 20 percent, according to a study by the International Organisations of Consumers Unions, UNICEF and the British non-governmental organisation, OXFAM.

Bangladesh has even established a presence in the global drug market, earning seven million dollars last year from exports to 28 countries. Some 16 companies are selling pharmaceuticals to several European, Gulf and Asian nations.

With proper support Bangladesh can earn as much as one billion dollars from export over the next five years, estimates the

Bangladesh Drug Manufacturers Association.

The biggest emerging markets for Bangladeshi pharmaceuticals are its South Asian neighbours and the Commonwealth of Independent States. Bangladeshi drug firms, though, face a stiff challenge from Indian companies.

“Cheap labour and the low cost of production of medicines has given Bangladesh an edge over neighbouring countriesd in the export market,” says a pharmaceutical exporter.