Pharmaceuticals Procurement in Bangladesh

Pharmaceuticals are a complex and large sector in Bangladesh, with significant corruption and health impacts. The excess profits of the top companies allow them to market their drugs as ‘better’ drugs, by funding grey or illicit payments to doctors to prescribe these expensive drugs.

SOAS-ACE undertook two interrelated projects to provide a joined-up analysis that seeks to increase competition in the sector as a way of reducing corruption and cutting prices for poor consumers. The first project identified the weaknesses of the regulatory structure and the most feasible points of entry. The second looked at the economics of the pharmaceutical sector and mapped how the top companies effectively bribe doctors to prescribe particular brands whose prices are higher.

If successful, this project will stop the top companies paying doctors to prescribe their brands for particular molecules because there will no longer be excess profits in these areas. In an incremental way, this strategy could expand the market for the smaller pharmaceutical companies by squeezing out a damaging type of rent-seeking and thereby reducing out-of-pocket expenditures for the poor.

SOAS-ACE is currently undertaking research in Bangladesh and Nigeria, including in the education, health and power sectors, as well as on successful collective action that overthrew a corrupt autocracy. Moving beyond pure research, we are also monitoring the implementation of anti-corruption strategies our research has recommended, such as a strategy to reduce pharmaceutical companies’ overpricing of medicines.

Our partners on this project were Transparency International Bangladesh and the London School of Hygiene and Tropical Medicine (LSHTM).