Why Bangladesh needs to rethink how it prices medicines

In Bangladesh, out-of-pocket expenditure constitutes the vast majority of overall healthcare spending, with medicines accounting for nearly two-thirds of that burden. For decades, consumers have been stuck with a severely outdated framework dating back to 1994, one that capped prices for just 117 drugs while hundreds of newer and critical medicines entered the market largely unchecked.

Earlier this year, the interim government led by Nobel Laureate Professor Muhammad Yunus finally overhauled the country’s essential medicines policy in what it presented as a long-overdue attempt to give the state greater control over the prices patients pay for critical drugs.

The reform expanded the Essential Medicines List from 117 to 295 medicines and introduced a new Drugs Price Methodology to replace rules that had been in place since 1994.

On August 2, the BNP-led government effectively scrapped both reforms and reverted to the old list and pricing formula.

The Cabinet said the changes had been adopted without obtaining advice from the National Drug Advisory Council, as required under the Drugs and Cosmetics Act, 2023. Until a new list is prepared, the government said, Bangladesh will revert to its 1994 Essential Medicines List.

It is easy to treat this as a technical dispute over a number: 117 versus 295. But that misses the point entirely.

An essential drugs list is supposed to track how people actually get sick and what doctors actually prescribe. It is not supposed to be a museum piece. And the country's disease profile has changed enormously since 1994.

Non-communicable diseases, hypertension, diabetes, heart disease, cancer and kidney disease, now account for most deaths here. Unlike an infection that you clear in ten days, these are conditions people live with and medicate for years, often for the rest of their lives.

That distinction matters more in Bangladesh than in many other countries because so much healthcare spending comes directly out of household pockets. A family managing a parent's diabetes and a spouse's hypertension is not paying for medicine once. They are paying every month, for years, sometimes for multiple people at once.

When a government freezes the essential drugs list at 117 items and reverts to a three-decade-old pricing formula, it is not making a neutral bureaucratic choice. It is making a decision about which patients receive institutional protection when it comes to access to essential medicines, and, ultimately, basic human rights.

None of this is an argument for blunt price controls across the board. Badly designed price caps can create shortages and drive manufacturers out of low-margin products. Bangladesh has seen that happen before. But refusing to modernize is not the responsible alternative to bad regulation.

If there were genuine legal or technical problems with the interim administration's expanded list, the answer was to address them through discussion and consultation, and to carry the reform forward until a new law or framework could be enacted. The answer was not to throw the whole thing out and default to 1994.

There is another issue that deserves attention: pharmaceutical marketing.

The pharmaceutical industry spends heavily on medical representatives, promotional campaigns, physician engagement, gifts and other forms of brand promotion. Much of this expenditure has little direct relationship with the cost of manufacturing medicine. Yet these costs ultimately form part of the commercial ecosystem through which medicines reach patients.

This raises a fundamental question: if pharmaceutical companies can sustain substantial expenditure to win market share and influence prescribing behaviour, why is the burden of affordability so often presented as a consequence of unavoidable production costs?

Keeping aggressive marketing and promotional expenditure within reasonable limits could help reduce some of the commercial pressure that ultimately feeds into medicine prices. If affordability is genuinely a policy priority, this part of the industry deserves much closer scrutiny.

The upstream problem

There is another important point.

Bangladesh's pharmaceutical industry likes to tell a flattering story about itself: domestic manufacturers cover more than 97 percent of the medicines we consume, and a handful of companies now export well beyond our borders. It is a real achievement, and one of the genuine success stories of Bangladeshi industry over the past three decades.

But spend a little time looking at where the raw materials come from, and the story gets less comfortable.

Almost all of our Active Pharmaceutical Ingredients (API), the actual chemical compounds that make a tablet a medicine rather than chalk, are imported, mostly from China and India. We are extremely good at the last mile: formulating, packaging and distributing. We remain almost entirely dependent on someone else for the first mile.

That gap should be at the centre of any serious conversation about pharmaceutical policy as Bangladesh heads toward LDC graduation. Instead, the government has quietly made things worse.

The bigger vulnerability is obvious. Every currency shock, every shipping disruption from India or China, and every export restriction imposed by a supplier government can become, almost immediately, a domestic medicine problem.

We saw versions of this kind of fragility play out globally during COVID-19. There is no reason to assume Bangladesh will be insulated from the next disruption. And if prices are not properly regulated, pharmaceutical companies will inevitably have an incentive to maximize profits by passing on the costs associated with every such shock, whether justified by genuine supply pressures or not.

Nobody seriously argues that Bangladesh should try to manufacture every API itself. That would be expensive and pointless.

What makes sense is to identify the APIs that matter most: those with high public-health importance, concentrated supplier bases and genuine exposure to disruption. Bangladesh should build real domestic capacity around those while diversifying suppliers for everything else.

This is the kind of unglamorous, medium-term industrial planning that does not generate headlines but can prevent crises.

The API Industrial Park in Gazaria, Munsiganj was supposed to be exactly this. Years later, it is still hobbled by basic infrastructure problems, power, effluent treatment and other fundamentals that should not still be unresolved.

That is what it looks like when a strategy fails to leave the drawing board.

The LDC clock is ticking

There is also a clock running that most of this debate ignores.

LDC graduation does not strip away every trade flexibility overnight, but it does mark the beginning of the end of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) policy space that has allowed Bangladeshi manufacturers to copy and produce generics relatively freely for decades.

Patent rules, licensing and technology transfer will all become more consequential once we graduate. And the pressure will be greatest for exactly the newer and more complex medicines the country will increasingly need: biosimilars, biologics and complex generics.

Building that capability requires more than factories. It requires people who understand patent law, regulatory science and technology transfer. Bangladesh does not yet have enough of those experts.

The 1982 National Drug Policy is still worth studying because it got one thing right that seems to have been forgotten: medicine is not an ordinary consumer good, and treating it as one is a policy choice with real costs.

But nostalgia for 1982, or a retreat to 1994, is not a strategy for a country now juggling an ageing, chronically ill population, heavy out-of-pocket healthcare spending, import-dependent manufacturing and a shrinking window of trade flexibility.

What is needed is a government willing to regulate essential medicines firmly while actually initiating the unglamorous upstream work, API capacity, regulatory expertise and patent literacy, that nobody notices until it is missing.

Bangladesh has already demonstrated that it can build a globally competitive pharmaceutical manufacturing industry.

The next challenge is much harder.

We must build the upstream capacity, regulatory sophistication and intellectual-property preparedness necessary to protect that industry, and the patients who depend on it, in the post-LDC era.

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Nayema Tasnim is a trainee doctor of cardiology.