The prices of medicines in the country frequently rise. In recent months, prices have increased by approximately 30% to 90%, depending on the medicine. People with limited income are struggling to purchase medicines at these increased prices, pushing many towards financial ruin. Stakeholders blame unethical marketing practices or promotional marketing activities by producers and suppliers for this uncontrolled rise in medicine prices. They claim that companies provide gifts or bribes to doctors under the guise of promotional marketing, which is ultimately extracted from the consumers’ pockets.
According to health experts, medicine is a primary element in fighting diseases and survival. As a means of curing diseases, there is no alternative to medicine. Considering its importance, the World Health Organization (WHO) has declared medicine as one of the six essential components of the health sector. Thus, the availability of medicine has become one of the key determinants of achieving universal health coverage.
Research by the Health Economics Unit of the Ministry of Health and Family Welfare reveals that 65% of the total healthcare expenditure of the population is spent on medicines. In other words, for every 100 Taka spent on healthcare, 65 Taka is spent on purchasing medicines. This highlights the dependence of the population’s health security on medicines.
In the country, it is rare to find individuals without gastric or acidity problems. Additionally, one in five adults suffers from diabetes and high blood pressure.
Conversations with various pharmacy stakeholders in the capital revealed that the most sold medicines in the market are for gastric issues. Following that, medicines for blood pressure and diabetes occupy the second and third spots on the sales list. Among gastric medicines, the most sold ones are Sarzole, Pantonix, and Maxpro. Additionally, Nap, a paracetamol group medicine, is also among the top-selling medicines.
Stakeholders noted that medicine prices have risen by approximately 30% to 90% in the past few months. People with limited income are struggling to afford these price increases, and there is growing resentment among the general public about the rising prices. Many believe that the uncontrolled rise in medicine prices is due to the lack of government regulation.
Experts claim that one of the main reasons for the increase in medicine prices is the unethical marketing practices conducted under the guise of promotional activities between pharmaceutical companies and doctors. Companies do not bear the cost of gifts or bribes given to doctors from their own funds. Instead, these costs are added to the medicine prices, which are ultimately paid by consumers. If these unethical marketing practices were stopped, the prices of medicines could be significantly reduced, and companies’ marketing costs could be brought down to 10%.
The Huge Gap Between Medicine Production Costs and Sale Prices
The general principle of medicine production and marketing suggests that the cost of goods, i.e., production costs, should be 30% to 40%. Marketing, promotion, and other expenses would account for another 30% to 40%. The remaining 15% to 20% would be the company’s profit.
Healthcare Pharmaceuticals manufactures and markets a medicine named Sarzole in the Esomeprazole group. Sarzole 20 mg is available in the market for 7 Taka per piece, while Sarzole 40 mg costs 11 Taka per piece. Another medicine in the Esomeprazole group, Maxpro, is manufactured and marketed by Renata Pharmaceuticals. Maxpro 20 mg is sold for 7 Taka per piece, and Maxpro 40 mg costs 10 Taka per piece.
According to pharmaceutical company sources, the production cost of each 20 mg Esomeprazole capsule or tablet, including raw materials, is approximately 70 paisa. The cost, including excipients (supporting ingredients), packaging, and labeling, is a maximum of 2 Taka. The total cost of producing each 40 mg Esomeprazole capsule or tablet, including raw materials, excipients, packaging, and labeling, is approximately 2 Taka 70 paisa. In other words, Esomeprazole medicines are being sold in the market at prices several times higher than their production costs.
The production cost of each 100 mg Losartan Potassium tablet used for treating high blood pressure is 0.06 paisa. Including supplementary chemicals and packaging, the total cost is approximately 1.25 Taka per tablet. This is sold at prices ranging from 10 to 12 Taka per tablet, depending on the company. Of this price, 30% to 40% is spent on marketing and promotional activities.
Metformin, used for diabetes, is available in 500 mg and 850 mg forms. The production cost of 850 mg Metformin is 55 paisa, and including excipients, the total cost is 70 to 80 paisa. Including packaging, the total cost of this medicine is approximately 1 Taka. It is sold for 6 Taka per piece.
The average production cost of each paracetamol tablet is 30 to 50 paisa. It is sold for 1.20 Taka, with the remaining amount after marketing costs as profit.
Pharmaceutical production sources indicate that if a medicine is priced at 100 Taka, the government gets 15% VAT, and pharmacies get a 15% profit. Of the remaining 70 Taka, 30% to 40% is spent on production costs, including raw materials, while 30% to 40% goes to marketing and promotional expenses, with the remainder as company profit.
A recent study on the pharmaceutical industry by the Bangladesh Institute of Development Studies (BIDS) reveals that companies spend more than 29% of their turnover on marketing. However, this marketing process is highly opaque. A large portion of this 29% is spent as gifts to doctors.
Experts’ Opinions on Unethical Marketing Practices by Pharmaceutical Companies
ABM Jamal Uddin, Managing Director of Gonoshasthaya Basic Chemicals Limited, said, “A major reason for the rising cost of medicines is the expense incurred through giving cash and gifts to doctors. About 30% of a company’s expenditure is on this. If doctors did not accept these, medicine prices could be 30% lower than current market rates.”
Dr. Syed Sabbir Haider, a professor at Dhaka University’s Department of Pharmacy, stated, “Unethical expenses, including providing gifts or money to doctors in the name of promotions, are added to the price of medicines, which consumers ultimately pay. Companies could reduce prices significantly by cutting these unreasonable expenses.”
Dr. Syed Abdul Hamid, a professor at Dhaka University’s Institute of Health Economics, commented, “We term this aggressive marketing. If medicine prices were determined based on the government’s pricing formula, companies wouldn’t be able to overcharge. When they can’t charge extra, the cost of aggressive marketing would have to come from the company’s surplus, discouraging this practice.”
Dr. Mozaffarul Haque, a former WHO (South-East Asia) advisor and a member of the Health Sector Reform Commission, remarked, “Doctors should provide ethical medical services, and pharmaceutical companies should engage in ethical business practices. If companies conduct business ethically and doctors refrain from accepting unethical incentives, medicine prices could certainly decrease.”
An executive of a pharmaceutical company, speaking anonymously, stated, “If we don’t spend on promotions, our medicines won’t sell. Doctors demand even more. If doctors stopped accepting these benefits, medicine prices might decrease. Our company doesn’t provide unethical benefits to doctors; large companies that do should be questioned about this.”
