Where price control is not unwanted

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Shamsul Huq Zahid | Published: February 04, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

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What should be the price of a 500 gm Ciprofloxacin capsule at the retail level?
Major drug manufacturers in the country have priced a piece of the item at around Tk.15. However, a number of little known companies are selling a 500 mg Ciprofloxacin at less than one-third of that price.
Highlighting this huge difference in the retail price tags of the widely used antibiotic in a front-page report on Monday last, a Bengali financial contemporary claimed that the cost of production of each 500 gm Ciprofloxacin capsule was only Tk1.50 and most companies were making around 1000 per cent profit from this particular medicine.
How authentic is the allegation about this cut-throat profit making by drug manufacturers?
There is no denying that the country's pharmaceutical companies, in the absence of official control over pricing of drugs and medicines, have been hiking the prices of medicines at will in recent years.
The prices of many widely used drugs have nearly doubled over the past couple of years. But, nearly 1000 per cent profit earning sounds quite bizarre, particularly when scores of companies are engaged in competition in a free market environment.
In neighbouring India, the price of a Ciprofloxacin 500 gram capsule or tablet also varies between Indian Rupee 4.0 (Tk.5.16) and 10 (Tk.13).  If seen in the context of Indian price tags, Ciprofloxacin is not that much over-priced in Bangladesh.
But if that was true, how are a few companies selling the same medicine at throwaway prices? Are they making a compromise with quality to keep the price at a much lower level?
This again is the job of the Directorate General of Drug Administration (DGDA) to look into the issue. The wide difference in the price in the case of Ciprofloxacin is not an isolated case. Such difference is also being observed in the price tags of many other medicines.
Unfortunately, the DGDA has turned out to be a non-entity as far as addressing the issues that relate to consumers' welfare is concerned.
Only a few days back, the anti-graft watchdog, the Transparency International, Bangladesh (TIB), made public the rot that has gone deep into this important organisation. The unscrupulous section of its officials and employees are found to be more interested in minting money from almost everything.
The DGDA is supposed to carry out at least 11 major tasks. The fixation of price and certification of price for drug products is one of those. The organisation, from time to time, does fix the price of about 160 essential drugs -- the number being highly inadequate, according to many, needs immediate revision.
The ministry concerned seems to be uninterested to look into the consumers' allegation about unabated and whimsical rise in the prices of medicines for quite sometime.
True, in a free market economy, there should not be government control over price. But there are exceptions. The prices of drugs and medicines are much linked to the physical wellbeing of the rich as well as the common people. The affordability, in terms of prices of drugs and medicines, on the part of the latter is an issue that a government can hardly ignore.
The situation in neighbouring India is altogether different. The country has a very active National Pharmaceutical Pricing Authority (NPPA).  In total, 628 scheduled formulations are direct price control of the NPPA. Recently, the NPPA has brought 52 new drugs under price control mechanism. The drugs include Paracetamol, Glucose, Amoxicillin, Diazepam, Codeine Phosphate, Ciprofloxacin and Diclofenac. The NPPA also regularly monitors the prices of the decontrolled medicines in the market.
The pharmaceutical companies here are free to fix the prices of the medicines mentioned above. At times, prior to any increase the price of a particular medicine, the major players in the market through an unholy alliance create an artificial crisis of the same in the market.
In fact, the creation of any artificial crisis before any price-hike is not necessary when the drug manufacturers are free to fix the hundreds of formulations beyond the list of so-called essential drugs.
The situation as far as the prices of most medicines are concerned necessitates immediate relieving the DGDA of the responsibility of drug price fixation. Instead, an authority in line with the Indian NPPA should be created under the ministry of commerce.
The DGDA has too many tasks that it finds difficult to handle. It does often complain about serious dearth of manpower and logistics. However, there are valid reasons for making such complaints.
But the creation of yet another organisation would not mean anything other than wastage of resources if that body fails to deliver the intended results.  The priority objective of the proposed drug price fixation authority should be to serve the interests of the poor needing medical help. However, while doing so, such an authority will also have to keep in view the economic health of the local pharmaceutical companies that have been witnessing a phenomenal growth in recent year.  
    zahidmar10@gmail.com