Making essential drugs affordable

The government's decision to expand the list of essential medicines to 295 and bring all of them under price regulation comes at a time when the cost of basic treatment is increasingly outpacing the ability of ordinary families to pay. In this context, regulating prices offers a practical means of restoring fairness and predictability to an increasingly burdensome market. Essential medicines are not ordinary consumer goods. They are, by definition, the treatments that meet the vast majority of common health needs, which means they determine whether families can manage illness or are pushed into debt and distress. Over the past two to three years, the prices of many commonly used drugs have risen by 60 to 70 per cent, a pace far above income growth for most households. When lifesaving medicines become unaffordable, their very designation as essential loses meaning. Faced with this reality, the state carries both a moral and economic responsibility to ensure that the most widely used treatments remain affordable for ordinary citizens, especially given the high out-of-pocket health spending and limited insurance coverage.

At the same time, price regulation must account for the realities of pharmaceutical production. Bangladesh's drug manufacturers rely heavily on imported raw materials, particularly active pharmaceutical ingredients, and any sharp depreciation of the taka can sharply raise production costs. Even before the government's announcement, the Bangladesh Association of Pharmaceutical Industries (BAPI) had cautioned that rigid price controls could create difficulties for manufacturers amid rising import costs and currency fluctuations. An inflexible pricing formula could push some companies, particularly smaller firms, into financial losses, thereby threatening the continuity of supply. If manufacturers cannot cover costs while earning a reasonable margin, shortages may follow, harming patients as much as high prices would. Rational price setting, therefore, should be based on current data regarding input costs, exchange rates, compliance expenses and reasonable margins, rather than on arbitrary ceilings. The government's plan to phase in the new prices over four years appears to address these concerns pragmatically, giving companies time to adjust while keeping essential medicines affordable. Nevertheless, the fundamental principle of regulating these core lifesaving drugs remains non-negotiable, as leaving them entirely to market forces would perpetuate the very inequities that made intervention necessary. 

What critically weakens the opposition to price regulation is the industry's own recent pattern of commercial behaviour. Evidence indicates that many pharmaceutical companies have chosen to prioritise production and marketing of non-essential drugs where prices can be hiked at will while simultaneously neglecting or underproducing essential medicines most widely needed by the public. Against this backdrop, claims that controlling prices on fewer than 300 essential drugs would threaten the viability of some companies are unconvincing. BAPI itself has noted that its members supply roughly 98 per cent of domestic demand, underscoring their significant market presence. This commanding position is difficult to reconcile with claims that regulating a limited, defined basket of essential drugs would destabilise the entire sector. Price control for these core medicines is a reasonable expectation against the backdrop of the broad commercial freedom companies otherwise enjoy, and it remains an essential measure for safeguarding public health.   

Longer term, the sustainability of pharmaceutical sector can be strengthened by expanding domestic production of active pharmaceutical ingredients, thus reducing reliance on imports. This is an area where the government should actively support industry stakeholders through targeted incentives and coherent policy. Concurrently, stronger regulatory enforcement of quality standards will also protect reputable manufacturers from being undercut by substandard or illicit products. For now, however, a rational price fixation model mindful of cost inputs and a fair profit margin is the pragmatic path forward.