Dhaka to give drug policy a free market dose

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FOR 11 years now in Bangladesh, transnational pharmaceutical firms have been squeezed out of the market because of a drug policy that has kept down prices of medicines, increased their production and encouraged the local drug industry. But the big firms looking for big bucks may be back if the government implements a review committee's recommendation made last November to relax controls on drug prices and registration.

Bangladesh was the first Asian country to adopt a drug policy aimed at ensuring easy access to essential drugs at affordable prices and quality drugs that were also useful, effective and safe. When unveiled in June 1982, the World Health Organisation (WHO) and the Asian Development Bank welcomed the policy, but it was vehemently condemned by national and transnational pharmaceutical companies. The Bangladesh Medical Association (BMA) also complained that it had not been involved in the drafting of the policy.

The pharmaceutical industry and the BMA remained critical of the policy for years, prompting the formation of the review committee was formed, consisting of industry and BMA representatives, pharmacists, dispensers, medical practitioners, politicians and government officials. The panel took one year to submit a draft policy to the government. Patients and consumers were not represented on the committee, nor were traditional (ayurvedic and unani) and homoeopathic drug manufacturers. They secured an injunction to prevent the government from circulating either proposals or the revised policy.
However, panel member M A Majed of BMA insists the review is intended to simply remove policy shortcomings, but he concedes allowing the manufacture of drugs under licensing arrangements caters to the government's drive for foreign investment.

The committee's pricing proposals are also controversial. The 1982 policy allows the government to control the prices of certain drugs and pharmaceutical raw material. The committee argues strict price controls "limit the initiatives of firms to spend money on quality assurance and maintain good manufacturing practices...Moreover, prices of most drugs are determined by competitive market forces." It recommends manufacturers fix the retail prices of their products at not more than four times the cost of raw material and packaging.

Majed does not expect drug prices to be affected much by the recommendation and says the draft only tries to strike a balance between the interests of public and industry.
Considerable change The profile of Bangladesh's pharmaceutical industry has changed considerably over the past decade. The drug policy banned 1,666 useless, ineffective or harmful products -- probably its most controversial measure.

Though small in terms of global trade, the Bangladesh market has grown and local companies have done particularly well. The total value of local drug production increased by more than 217 per cent in the past decade. In 1981, eight multinational companies controlled 65 per cent of local production and supplied 80 per cent of the government's drug requirements. By 1991, Bangladeshi companies were producing more than 60 per cent of the drugs, with one national company alone supplying about 70 per cent of the government's requirements.

In 1981, only 30 per cent of the essential drugs were manufactured in the country, but by 1991, this rose to 80 per cent -- a feat touted as "the number one achievement of the drug policy". Essential medicines are not only more easily available but also affordable. Although the consumer price index rose by 173 per cent between 1981 and 1991, the retail price of 25 major drugs increased by an average of only 20 per cent.

Another change was a lower dependency on imported drugs. In 1981, one-third of the import bill was for finished drugs, but in 1991 this dropped to less than one-eighth, saving the country an estimated $186 million in foreign exchange.

Concerted campaign
These turnarounds rattled the transnationals. Already suffering from a tightening global economy, they began a campaign to get Dhaka to change its drug policy. Under the umbrella of the Foreign Investors Chamber of Commerce and Industry (FICCI), which represents foreign companies including pharmaceuticals operating in Bangladesh, a concerted campaign was waged pushing a free-market approach to medicines. The FICCI campaign wanted price controls abolished and the door left virtually open for product registration.

Several arguments were used to discredit the drug policy. It was blamed for driving out transnational companies from the country, increasing smuggling of banned drugs and depriving Bangladeshis of valuable life-saving products.

Cited as proof of companies leaving were decisions by three transnationals -- Squibb, ICI and Smithkline and French -- to sell their pharmaceutical subsidiaries in Bangladesh. But the fact is all three companies are streamlining international operations in the face of a global recession and the need to consolidate operations and focus on major markets and products. They consider Bangladesh to have a small market, little industrialisation and an unstable economy. As a transnational pharmaceutical company representative put it, "Why should we buy problems in Bangladesh? We can get better investments in eastern Europe."

From the day the drug policy was introduced, there were complaints that banned drugs are being smuggled into Bangladesh. Salman Rahman, president of the Bangladesh Aushad Shilpa Samity, which represents most pharmaceutical companies including transnationals, says, "The ban only encourages large-scale smuggling of these items, depriving the country of huge revenue." And, though FICCI maintains drug smuggling has "increased", its spokesperson concedes there is no hard data to prove this and says, "It's just a feeling we get from sales reports."

Surprisingly, essential medicines are not smuggled, because it is more lucrative to bring in a cough medicine containing codeine (a potentially addictive opiate) or an antihistamine (that can have a sedating effect). Several investigations show they are not used to treat illnesses, but as a drug of abuse.

Registration squabble
Mukhlesur Rehman Khan, director of the Drug Administration, denies people are being deprived of new life-saving drugs because of registration requirements. "Anyone can apply to register new medicines," he explains. "They just have to show the product is safe, effective and useful. Even an unregistered product can be imported by doctors or individuals for personal consumption, but not for commercial use. This can be approved in one day. The system is there, including an appeal system."

Registration of medicines is decided on the basis of "safety, efficacy and usefulness." The key word here is usefulness because it permits assessment of whether a product fulfills a public health need and does so more effectively, more safely and more cheaply than products already on the market.

The industry wants "any medicine certified by three developed countries as safe and effective" to be manufactured in Bangladesh or imported, but this position completely ignores the aims and objectives of the drug policy.

A FICCI spokesperson argues that while the registration system appears simple, in practice, registering a drug can take as long as four years or it is refused with no reason given. Argues the spokesperson, "The product is at the beginning of its life cycle when the approval process starts, but by the time it is approved and gets into the market, it can be at the end of the life cycle."

The arguments, however, really revolve around economics, not health. Transnationals, particularly research-based ones, want their products in the market before competitors produce similar drugs or the product patent runs out and cheaper versions become available.

The problem is not so much the drug policy itself as it is its implementation. Registration does not take as long as it does in many industrialised countries. Drugs are refused registration because safety, efficacy or usefulness cannot be proved. In most cases, it is either efficacy or usefulness that has not been shown. Applications for introducing additional formulations of a drug already in the market move quite quickly, but delays occur when a therapeutic agent has not been sold in the country previously and the drug administration wants to collect and carefully study information on the product.

Another change the industry wants is market entry for "home remedies" that "effectively relieve symptoms and provide comfort." It says such products are available over the counter in many countries. Many of these products, however, are "unnecessary and useless medicines" and WHO warns unrestricted availability of medicines for self-medication "may result in their inappropriate use, delay in diagnosis and waste of resources". WHO urges there should be a more careful selection of such drugs.

Rehman Khan has little sympathy for the industry's demand for a more lenient registration system. "If the pharmaceutical industry says it is being squeezed because we don't let them make useless products, it's true," he says. "But the squeeze is not on the manufacture of essential drugs. They can make as many essential drugs as they like."

Quality control
One area where there the industry and the regulatory authority have no difference of opinion is quality control. Earlier this year, both Bangladesh Prime Minister Khaleda Zia and finance minister M Saifur Rahman emphasised to pharmacists the importance of quality control. Although the quality of medicines has improved over the years, there is still considerable room for improvement.

About 90 per cent of the Bangladesh drug market is controlled by just 20 companies, with quality control standards that are high and good manufacturing practices. Poor-quality drugs are usually made by companies without adequate facilities and should never have been licensed. But their sub-standard products have very little impact on the market.

In 1992, however, poor-quality paracetamol syrup was responsible for the death of more than 230 infants. The syrups contained diethylene glycol -- which can cause kidney failure -- as a diluting agent, instead of propylene glycol. Five local companies were involved in producing the toxic syrups. Two directors of a firm were recently sent to prison.

The drug administration banned all paracetamol syrups in December 1992 and ordered a thorough analysis of the 10 available brands of paracetamol syrup. Some of the brands had to be sent abroad for analysis because testing equipment was lacking in Bangladesh and now Rahman Khan regularly calls for modernising drug-testing facilities and increasing the number of drug inspectors.

There is agreement on the importance of quality control, but not on how best to achieve it. Chowdhury calls for establishing an independent drug testing laboratory, tests on products by rival producers and strengthening the government laboratory so as to increase its present capacity of 4,000 samples to 10,000. In addition, he wants to increase the number of drug supervisors from the 30 now covering 20,000 drug stores and 200 manufacturing units in the country.

Majed argues for in-house quality control laboratories within manufacturing plants and automatic punishment for quality lapses. The review, he says, has recommended criteria for good manufacturing practices and once quality control is strictly enforced, the popularity of drugs will be determined by market forces, because people will only buy those medicines rated good.

Other areas that need attention include improving traditional medicine systems, providing better training for dispensers and health workers and a health service that focusses on the rational use of medicine.

By revitalising medical and pharmacy education and training, improving education for consumers, working closely with communities to develop a health care system that meets the needs of the people and strengthening regulatory and quality control mechanisms, Bangladesh can ensure its people get the right drugs at the right price and that they are used wisely.

As WHO points out, "National drug policies and essential drugs programmes are now, and in the foreseeable future, the best means we have available of pursuing and eventually attaining the dual objective of rational management of drug resources and better health for all."

---Andrew Chetley is a freelance journalist in Britain, specialising on health. His article includes inputs from Mostafa Kamal Majumder, a Bangladeshi journalist.