Allowing pharmaceutical companies to fix prices of the medicines manufactured by them using the 'indicative pricing' tool has led to uneven competition, sources said.
The government's executive order for indicative pricing in 1994 empowering the manufacturers to fix prices of their products, on condition of getting them approved from the drug office, is causing unhealthy competition in the market.
After this order was issued, many factories shut down in the last ten years and many are facing closure now, industry sources said.
A medicine manufacturer alleged that indicative pricing tool is being misused by the 'big players' as they spend more and get lucrative rates of return on with high prices of products.
He said indicative pricing for more than 13 hundred generics has also led the manufacturers who have the financial strength to spend a lot to motivate the physicians by reportedly extending financial facilities.
The medium and small factories who maintain quality but do not have much money to spend unethically are suffering due to the uneven competition, a leader in the manufacturers' association said.
He said more than 30 small companies faced closure in the last ten years and many are facing trouble as their market share is shrinking day by day.
According to an international marketing survey agency, currently top ten pharmaceutical companies dominate with their market share at an aggregate of about 65 per cent while more than 170 companies share the rest 35 per cent.
Square leads the market with 19 per cent market share. Incepta stands second with 10 per cent, Beximco 9.0 per cent, Opsonin 5.0 per cent, Renata 5.0 per cent, Eskayef 4.0 per cent Aristopharma 4.0 per cent, ACI 4.0 per cent, Drug International 4.0 per cent, and Acme 4.0 per cent.
Sources said the top twenty companies transact more than 80 per cent of the total business in the sector and only 20 per cent is shared by the rest.
A leader in the chemist and druggist association said the "big players' share" is increasing day by day as most of the physicians are currently prescribing their products after taking some 'facilities.'
Sources said though there is 'control' over prices of some essential drugs but in reality such drugs are not available in the market as per demand.
The druggist association leader said both the controlled and decontrolled drugs are currently being sold at higher prices in the market.
He said, "The big market players increase prices without giving prior notice. As a result the wholesalers face trouble as the customers think they are being charged higher prices."
A source in the Bangladesh Association of Pharmaceuticals Industries (BAPI) told the FE, "Though there are 'mark-ups' for indicative prices but there should be a limit. If there is no limit, the big players will spend more and sell products at higher prices."
"Till today there is no record that the drug office stopping any big company's pricing", he said.
The BAPI source alleged graft in the drug office. All the pricing proposals, he observed, are being approved without checking as per 'mark-up' and other rules.
A small medicine factory owner said currently more than 60 companies are manufacturing good products maintaining the required standard.
"Except some small companies, most of the manufacturers maintain good manufacturing practices. But our products are not getting popularity as we are unable to spend a lot for unethical marketing", he said.
"We are not able to exploit the indicative-pricing opportunity as we do not have enough money to spend for marketing. As a result our products are not being prescribed and we cannot sell our brand at higher prices, as compared with those of the Top Ten", he added.
Another source in the chemist and druggist association said a few days back Beximco, the third leading medicine manufacturer of the country, increased prices for 21 items by 40 per cent to 60 per cent without giving any notice.
He said not only Beximco, but also all other leading pharmaceutical companies increase product prices round the year. They artificially create demand and increase the prices of their products as the physicians prescribe their products only, he alleged.
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