Introduction: Bangladesh is one of the ten most populous countries in the world. It is also one of the poorest.

Access to even the most basic of healthcare provision remains sub-standard, despite the ongoing efforts of the government, aided by considerable international assistance. Adequate secondary or tertiary care is beyond the reach of all but a very few. Government hospitals are often little more than clinics, and suffer from severe shortages of trained staff. There is a growing private hospital sector, largely based in Dhaka, which caters for the well-off. It is in the private sector where the most advanced services are located, and where almost all the demand for advanced equipment will be found. Given the countrys lack of spending power, the medical equipment market, at around US$100 million, remains tiny in comparison with the size of the population. Steadily improving economic performance, combined with a general determination to boost the quality of healthcare, should lead to steady, if unspectacular, market growth. Imports in 2005 grew impressively, increasing by almost two thirds compared to 2004, almost a four-fold increase over 2001. The majority of these comprised of more expensive X-ray equipment which may herald an improvement in Bangladeshi facilities. There is very little local production of medical equipment, so the market is heavily reliant on imports, often supplied in conjunction with aid projects. Definition: Medical equipments (also known as armamentarium) are products which are designed to aid in the diagnosis, monitoring or treatment of medical conditions. Types: Imaging: X-Ray, CT scan, MRI, Mammography etc. Cardiology: ECG machine, ETT machine, Holter, Defibrillator etc. Surgery / Anesthesia: OT Table, OT Light, Suction machine, Diathermy, Anesthesia machine, Patient monitor etc. Gynecology: Fetal Doppler, Fetal Monitor, Obstetric Table Neonatology: Baby incubator, Baby suction, Infant warmer, Phototherapy Pathology: Microscope, Digital Colorimeter, Lab rotator, Water Bath, Sterilizer, Electrolyte analyzer etc. Dental: Dental Unit, OPG X-Ray, Dental X-Ray, Curing Light etc.

Equipments Imported From / Manufactured: Most medical equipments are imported from: China, Korea, Taiwan, Japan, Germany, Italy, Netherlands and Finland. China has the largest market share as exporters of these equipments. 99% equipments are imported. Only few local shops located at Panthapath & Aziz Super Market manufactures anesthesia machine which is of poor in quality.

The Market: There are only two types of buyers of medical equipments in Bangladesh: 1. Diagnostic Centers (public & private) and 2. Hospitals (public & private). The public or govt. diagnostic centers & hospitals purchase the equipments through tenders. The private diagnostic centers & hospitals purchase the equipments by both tenders & personal contacts. Percentage of Purchase:

30%

Diagnostic Centers Hospitals 70%

70% of the medical equipments are purchased by diagnostic centers & 30% are purchased by hospitals Type of Good: The medical equipments are strictly related to saving a persons life, prescribing medicines & diagnosis of diseases. So it can be said without any doubt that they are very essential for our well being. From my point of view I strongly refer them as inelastic goods. Well not all of them but most of them. The increment of price or cost will not affect the buyers decision of purchasing the necessary equipments, it surely can affect the consumers who would take the service because the service is not free and it can surely increase. Price controls: Governmental restrictions on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of staple foods and goods, to prevent gouging during shortages, and to slow inflation, or, alternatively, to insure a minimum income for providers of certain goods. There are two primary forms of price control 1. A price ceiling and 2. A price floor

A price ceiling is a government-imposed limit on the price charged for a product. Governments intend price ceilings to protect consumers from conditions that could make necessary commodities unattainable. Example: Minimum wage at garments factories. A price floor is a government- or group-imposed limit on how low a price can be charged for a product. Example: Cell phone call rate. Price control by the Government of Bangladesh: I did a brief research regarding the price control of medical equipments by the Government of Bangladesh (GoB). I found out that there are no such practices by GoB. So, we can say that for medical equipments in Bangladesh, both price ceiling & price flooring do not exist. But GoB does impose different tax & custom duties on different medical equipments. During government tenders, they set a price for the certain equipments they wish to purchase.

The demand & supply of medical equipments:

P DD P=Price Q=Quantity EP=Equilibrium Price EQ=Equilibrium Quantity DD=Market Demand Curve SS=Market Supply Curve

SS

EP D EQ Q

Here in figure 1 we can see the demand and supply curve of medical equipments. As the medical equipments fall in the inelastic good category, I have drawn the demand curve to be inelastic and the supply curve to be elastic. In the long run, the supply curve will be even more elastic. The shifts and movements: The factors which mostly affect the demand of medical equipments in Bangladesh are: Price of substitute goods & Population. The factors which mostly affect the supply of medical equipments in Bangladesh are: technology, other influences & Government influences (Tax).

As the demand curve is pretty inelastic, a minimum rightward shift in the demand curve would increase the quantity demanded of medical equipment to the same extent but a downward shift in the supply curve would decrease the price to a large extent but would not increase the quantity supplied much. We can see this in the following two diagrams:
P DD DD P DD

SS EP EP EP EP Q EQ EQ EQ EQ Q

SS SS

So the equilibrium after an equal rightward shift of demand curve & downward shift of supply curve will be:
PP DD DD An equal rightward shift of

SS

EP EP

SS

demand curve & downward shift of supply curve results in an increased quantity & decreased price. But the price decrease is less proportionate to the increase in quantity.

PQ EQ EQ

The same thing can be shown for a leftward shift in demand and an upward shift in supply. The shifts in demand & supply curve will be more specifically shown when we concentrate on a particular equipment rather than the whole scenario.

Tax Imposition:
P

Price Buyers Pay Total Tax Burden Q Tax burden on producers

Tax burden on consumers

Price Sellers Receive

Taxation of medical equipments is basically imposed on sellers, but it falls heavily on buyers. Because we know that When supply is more elastic than demand, the incidence of the tax falls more heavily on the consumers. A tax burden on buyers also causes a downward shift of the demand curve. The range of tax of medical equipment in Bangladesh would be: 0 %< Medical Equipment in Bangladesh<34.5%

Conclusion: Medical equipment is very essential in our life. I mean they are strictly related to saving life & diagnosis of diseases & health problems. I couldnt show all the implications of the demand and supply & tax regulations of medical equipment. But I have tried to show most of the changes & facts. Hopefully the facts & figures shown will serve the purpose. References:
1. Mark Hirschey, U. o. (2012-13). Managerial Economics, Eighth Edition. The Dryden Press, Harcourt Brace College Pulishers. 2. N. Gregory Mankiw, H. U. (2012-13). Principles of Microeconomics, Fourth Edition. Thompson, South-Western. 3. Syed Aksanul Alam, Managing Director, Transmed Limited