Who actually sets medicine prices in Bangladesh?

The abrupt withdrawal of Bangladesh’s new essential medicines list and drug-pricing framework has put forward a simple question…who actually has the power to determine what a medicine should cost in Bangladesh?

The short answer is the government. The longer answer involves the Directorate General of Drug Administration, the National Drug Advisory Council and a regulatory structure in which their respective powers are often blurred in public discussion.

Under the Drugs and Cosmetics Act, 2023, the Directorate General of Drug Administration, or DGDA, is Bangladesh’s principal medicines regulator. It licenses pharmaceutical manufacturers, registers medicines, oversees quality and safety standards and enforces the regulatory rules governing the industry.

But describing the DGDA simply as the authority that “sets drug prices” misses an important legal distinction.

Section 30 of the Drugs and Cosmetics Act gives the government statutory authority over medicine pricing. In practice, that regulatory system is administered through the DGDA, which implements government price controls and deals with the approval or determination of maximum retail prices where those controls apply.

In other words, the DGDA is the regulator at the center of the machinery, but the statutory authority ultimately rests with the government.

That division between statutory authority and regulatory implementation is not unusual internationally. In India, for example, the central government exercises price-control powers under the Drugs (Prices Control) Order, while the National Pharmaceutical Pricing Authority, or NPPA, implements the regime, including by fixing or revising ceiling prices for scheduled medicines. 

India’s National List of Essential Medicines plays an important role in determining which medicines are brought within that system of scheduled price control. The arrangement illustrates how the agency that actually calculates, publishes and finally enforces prices need not itself be the ultimate source of the legal power.

That distinction has become particularly important after the government scrapped two measures introduced earlier this year: the National Essential Medicines List 2026 and the Drug Pricing Method 2026.

Why was the reform important?

The reforms represented a significant expansion of state intervention in pharmaceutical pricing. The new essential medicines list increased the number of medicines receiving special regulatory protection from 159 to 295. The accompanying pricing methodology established a framework for determining the prices of medicines covered by the list.

Both measures relied on the authority provided under the Drugs and Cosmetics Act.

But the government withdrew them on August 3, saying the National Drug Advisory Council had not been consulted before they were adopted. The decision effectively returned Bangladesh, at least temporarily, to its previous essential medicines list and pricing regime while a replacement framework was prepared.

That explanation has placed another institution — the National Drug Advisory Council — at the heart of the controversy.

The council is established under Section 13 of the Drugs and Cosmetics Act. Its responsibilities include advising the government on national drug policy, the pharmaceutical industry, the production and supply of medicines and the designation and periodic revision of essential medicines.

The operative distinction is that the council advises.

The law does not make the council Bangladesh’s drug-pricing regulator, nor does it give the council the power to independently determine medicine prices. That authority remains with the government, while the DGDA administers the regulatory system.

Here, too, Bangladesh is hardly alone in separating technical advice from the final exercise of regulatory power. In Australia, the Pharmaceutical Benefits Advisory Committee assesses medicines and advises the health minister on whether drugs should be subsidised through the Pharmaceutical Benefits Scheme. 

The committee’s recommendation is enormously influential — a medicine generally cannot be listed without a positive recommendation — but the advisory body does not simply become the government itself. Pricing and reimbursement emerge from a larger statutory and administrative process involving government authorities and negotiations with pharmaceutical companies.

The United Kingdom offers a different model. The National Institute for Health and Care Excellence, or NICE, evaluates medicines largely by asking whether their clinical benefits justify their costs to the National Health Service. It can recommend whether a treatment should be routinely available, while the broader pricing and commercial arrangements involve the government, the NHS and pharmaceutical manufacturers. The British system therefore distinguishes between evaluating whether a medicine represents sufficient value for public expenditure and the mechanisms through which its effective price is negotiated or regulated.

The controversy, therefore, turns partly on the legal significance of consultation.

The government rationale 

The government’s decision to withdraw the 2026 measures rests on the position that the absence of consultation with the National Drug Advisory Council created a procedural deficiency serious enough to require their reversal.

But Section 13 describes the council as an advisory body. That leaves a separate legal question: whether failing to consult it necessarily invalidated the entire essential medicines list and pricing methodology, or whether the procedural deficiency could have been corrected without abandoning the reforms themselves.

International practice shows why the wording of the law matters. An institution may formally be described as advisory while its recommendation is, under the relevant statute or regulations, a necessary step before a government can act. Elsewhere, consultation may be influential without amounting to a legal veto. 

The crucial question is therefore not simply whether the National Drug Advisory Council is called an “advisory” body, but precisely what Bangladesh’s law requires the government to do before exercising its powers.

The distinction is more than bureaucratic.

Bangladesh has a large domestic pharmaceutical industry, while patients continue to bear a substantial share of health care costs themselves. Decisions over which medicines fall under government price controls can therefore shift considerable economic consequences between pharmaceutical manufacturers and millions of consumers.

The 2026 framework would have substantially expanded the universe of medicines receiving direct price protection. Its withdrawal narrows that intervention, at least until the government introduces a replacement.

Other countries demonstrate just how consequential the design of such a system can be. India uses ceiling prices for medicines covered by its scheduled price-control regime. 

Australia relies heavily on the purchasing power of a publicly funded reimbursement system and negotiations over the prices the government will subsidise. Britain combines health-technology assessment with national purchasing and commercial arrangements. France, meanwhile, links reimbursement and price negotiations to assessments of a medicine’s therapeutic value, with prices negotiated through the Economic Committee for Health Products. 

These are different institutional models, but all recognise the same underlying problem: pharmaceutical prices cannot be treated solely as ordinary market prices when governments are simultaneously responsible for public health and access to essential treatment.

The international comparison also highlights something distinctive about the Bangladesh debate. The question is not whether governments elsewhere intervene in medicine prices — many do. It is how the authority to intervene is distributed among ministries, regulators, technical committees and reimbursement agencies, and which procedural steps are legally indispensable. 

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