From good enough to world-class

In late 2014, a cheerful octogenarian in a wheelchair rolled into a pharmaceutical factory in Rajendrapur, Gazipur. As he was escorted from room to room, his demeanour changed markedly. No longer engaging in light conversation, his goggle-eyed expression clearly pointed to a man completely befuddled by his surroundings.

The confusion was not due to dementia, for his mental faculties were functioning admirably. Having been a stalwart of the pharmaceutical industry from 1965 to 1994, a medicines factory ought to have been familiar territory. Yet it clearly was not.

Something really big had happened since his active days in the industry. A wondrous transformation.

The man in the wheelchair, Syed Humayun Kabir, founder chairman of Renata PLC, was no stranger to state-of-the-art technology. The factory he had built atop a hillock in Mirpur, Dhaka, during the last days of East Pakistan, had continued to be a centre of excellence well into the 1990s. Yet, at the turn of the century, things had changed even more dramatically.

At Rajendrapur, the sophisticated machines impressed him, but it was the futuristic aura that inspired awe. Spotlessly clean floors and walls, fresh air flowing through HEPA filters, spacious corridors leading to pressurised rooms with airlocks, workers dressed in spacesuits.

As the tour ended, tears of happiness rolled down his cheeks. He realised that Renata had become one of several Bangladeshi pharmaceutical companies with world-class manufacturing capabilities.

The real revolution in the sector, however, has been in quality assurance. Since the early 1990s, global manufacturing practices have shifted towards embedding quality control at every stage, from product development to the distribution of finished products. Quality is no longer an afterthought; it is woven into the process.

In the 1980s, quality control was minimal. A small laboratory would run a few tests to confirm whether the product contained the correct dosage or dissolved properly in the body. Stability was checked to ensure products remained effective until the expiry date. These measures were sufficient for the time, and the cost of quality assurance was negligible, almost a rounding error for most companies.

That is no longer the case.

Quality now covers far more ground. In addition to numerous tests for efficacy, there are multiple considerations relating to safety, replicability and traceability.

The result is that quality is now a major expense. For Renata, just the variable costs of quality assurance account for nearly 23 percent of factory running expenses. This excludes capital investments, amounting to hundreds of crores of taka, directly tied to maintaining quality.

Despite this drastic shift in costs, policymakers remain largely unaware. This fuels persistent criticism of the industry, especially over high prices and alleged profiteering. Under the current Interim government, the rancour has reached a fever pitch. Many still believe the 1980s cost structure applies, leading to inflated perceptions of profitability and misunderstandings about actual costs. This has triggered public calls for lower prices  -- understandable but not grounded in reality.

The truth is that medicine prices in Bangladesh are among the lowest in the world. Data from multiple sources, published and freely available online, confirm this.

The belief that pharmaceutical companies enjoy huge profits is equally misplaced. Until recently, firms earned about a 15 percent net margin on sales. Today, that figure is closer to 5 percent, due mainly to currency devaluation and rising costs. Yet the government appears set on imposing price controls on a wide range of medicines. The Ministry of Health and Family Welfare has formed a committee to explore the option, but history shows that administered prices lead to shortages and compromised quality. This is why most countries have adopted market-based pricing instead.

The push for price controls is driven by the desire to leave a populist legacy, one where medicine prices are slashed for the public good. But such measures are short-sighted and dangerous.

Visionary market-based policies introduced during the 1992-1994 period played a key role in shaping the dynamic, competitive industry Bangladesh has today, capable of producing high-quality medicines at affordable prices.

Reverting to populist measures reminiscent of the low-quality standards of the 1980s would undermine decades of progress and ultimately jeopardise public health in the long run.

The writer is the CEO of Renata PLC