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INTRODUCTION
The pharmaceuticals sector is one of the fastest growing sectors in Bangladesh. Before
liberation, there was hardly and pharmaceuticals enterprise in Bangladesh. After several years of
liberation, the govt. could not increase budgetary allocations for the improvement of health
sector. After the promulgation of drug control ordinance-1982, the development of
pharmaceuticals industry has accelerated. Due to recent development of this sector, the country
is exporting medicines to global market including European countries.
In recent years, the country has achieved large volume of parental products by which the country
becomes self-sufficient, huge volume of these products are also exported to other countries.
From the year of 2003 BAPI has been organized ASIA PHARMA EXPO which attracting most
of the largest stakeholders of Pharma & associated industry of Asia & Europe.
The economy of Bangladesh is rapidly developing market based economy. The economy has
grown at the rate of 6-7% per annum over the past few years. Pharmaceuticals sector has
definitely contribution this growing. The Bangladesh govt. continuous to court foreign
investment, something it has done fairly successfully in pharmaceutical sectors. The sector
consistently creates job opportunities, especially for highly qualified people. Like other
industries pharmaceutical industry also believes that the human resources are most
valuable
(PCB), regulates the practice of Pharmacy throughout Bangladesh, control pharmacy practice in
Bangladesh.
LOCAL SALES:
EXPORT:
The figure above shows the Local Sales of Pharmaceutical Products. Pharmaceutical Sales
rose by 11.37% in 2014 to BDT 113 bn due to increased medical coverage of the population &
easy access to Health Care Services because of strong distribution network. According to IMS
Health, Annual Pharmaceutical Sales in the Local Market are likely to hit BDT 160 bn by
2018. Sales of Square (the market leader) in 2014 was BDT 21 bn followed by Incepta with
Sales amounting BDT 12 bn & Beximco with Sales of BDT 10 bn.
Bangladesh Pharmaceutical Industry exports a wide range of products covering all major
therapeutic classes and dosage forms to 92 countries. The major destinations for Bangladeshi
medicines are now Myanmar, Sri Lanka and Kenya while nearly 50 countries import
Bangladeshi Pharmacy products regularly. Beside regular forms like; Tablets, Capsules &
Syrups, Bangladesh is also exporting high-tech specialized products like HFA Inhalers, CFC
Inhalers, Suppositories, Nasal Sprays, Injectable, IV Infusions, etc. and have been well
accepted by the Medical Practitioners, Chemists, Patients and the Regulatory Bodies of all the
importing nations. The packaging and the presentation of the products of Bangladesh are
equivalent to any international standard and have been accepted by them. While drug exports
posted double-digit growth from 2010 fiscal through 2014, overseas sales began to decline in
the last few months. The sector made $41.17 million worth of shipments, registering a 2.8%
decline compared to that of FY'14 mark worth $42.4 million in the first seven months (JulyJanuary) of the current financial year (FY'15) (EPB).
Company
SQUARE
INCEPTA
BEXIMCO
PHARMA
OPSONIN
PHARMA
RENATA
ESKAYEF
ARISTOPHARMA
A.C.I.
ACME
Market
Market
Size
Share
(BDT
(%)
Growth
(%)
21.15
11.78
9.56
18.7
10.4
8.5
7.3
15.6
7.6
6.35
5.6
19.8
5.74
5.09
5.07
4.69
4.51
5.1
4.5
4.5
4.1
4.0
13.5
12.0
15.7
9.9
14.1
According to IMS-Health, the top 10 players took 68.1% of the market. Companies ranked
11th to 20th took 17.50% of the market; the next 11 companies took 8.60% while the
remaining 222 companies shared 5.8% among them. Square Pharmaceuticals led the industry
with a market share of 18.70%. Incepta and Beximco took 2nd and 3rd positions with market
shares of 10.4% and 8.5% respectively. Interestingly except for Square, Beximco, Renata and
ACI, none of the other leading 6 companies in the top 10 are listed in the Dhaka Stock
Exchange (DSE) or Chittagong Stock Exchange (CSE). Growth of Healthcare Pharma was
highest in 2014 while Square had the least growth.
The Directorate General of Drug Administration (DGDA): DGDA is the drug regulatory
authority of Bangladesh, which is under the Ministry of Health and Family Welfare. DGDA
regulates all activities related to import and export of raw materials, packaging materials,
production, sale, pricing, licensing, registration, etc. of all kinds of medicine including
inspected by the DDA. Other key features of regulation are restrictions on imported drugs;
a ban on the production in Bangladesh of around 1,700 drugs which are considered nonessential or harmful; and strict price controls, affecting some 117 principal medicines.
2014
2013
2002
2003
2004
2012
20111
20010
2005
2009
2008
2007
2006
HEALTH EXPENDITURE
4.40%
4.20%
4.20%
4.30%
4.00%
4.00%
3.80%
3.60%
3.40%
3.20%
6.70%
7.50%
8.40%
9.30%
10.10%
6.00%
4.00%
2.00%
0.00%
2010
2011
2012
2013
2014
and Beximco had BDT 4.9 billion and BDT 4.4 billion in domestic sales for the last four
quarters. Although a number of MNCs are operational in Bangladesh market, no MNCs are in
the top ten in terms of domestic sales.
Because Bangladesh API capacity is insignificant, pharmaceutical companies import
approximately 80% of their APIs. Fifteen to twenty Bangladeshi firms are involved in the
manufacture of about twenty APIs, but they usually run the relatively easier final chemical
synthesis stage with API intermediaries, instead of the complete chemical synthesis. The other
1,000 required APIs are imported. Approximately 75-80% of the imported APIs are generic.
Company. This Company also obtained listing with Dhaka Stock Exchange on 28 December,
1976 and its first trading of shares took place on 9 March, 1994. Later on 5 May, 1992, ICI plc
divested 70% of its shareholding to local management. Subsequently the company was
registered in the name of Advanced Chemical Industries Limited. Listing with Chittagong Stock
Exchange was made on 22 October 1995.
Beximco
Beximco Pharma started operations in 1980, manufacturing products under the licenses of Bayer
AG of Germany and Upjohn Inc. of USA. It has now grown to become a leading pharmaceutical
company in Bangladesh, and it supplies more than 10% of country's total medicinal needs.
Today Beximco Pharma manufactures and markets its own branded generics for several diseases
including AIDS, cancer, asthma, hypertension, and diabetes for both national and international
markets.
Square
The company was founded in 1958 by Samson H. Chowdhury along with three of his friends as
a private firm. It went public in 1991 and is currently listed on the Dhaka Stock Exchange.
Square Pharmaceuticals Ltd., the flagship company, is holding the strong leadership position in
the pharmaceutical industry of Bangladesh since 1985 and it has been continuously in the 1st
position among all national and multinational companies since 1985. Square Pharmaceuticals
Ltd. is now on its way to becoming a high performance global player.
Renata
Renata Limited (formerly Pfizer Laboratories (Bangladesh) Limited), also known as Renata, is
one of the top ten (in terms of revenue) pharmaceutical manufacturers in Bangladesh. Renata is
engaged in the manufacture and marketing of human pharmaceutical and animal health
products. The company also manufactures animal therapeutics and nutrition products. Renata
currently employs about 2300 people in its head office in Mirpur, Dhaka and its two production
facilities in Mirpur, Dhaka and Rajendrapur, Dhaka.
Incepta
Incepta Pharmaceuticals was established in 1999 and produced its first product, ranitidine, in
December of that year. The company's manufacturing facility is located 35 miles from Dhaka in
Savar, where they produce various types of drug dosage forms such as tablets, capsules, oral
liquids, injections, and nasal sprays. The companys specialties include sustained-release tablets,
quick-dissolving oral tablets, and barrier-coated delayed-release tablets. Incepta also conducts
research and development on advanced dosage forms for various drugs and devices including
poorly-soluble drugs, dry powder inhalers, coated pellets, modified-release products, and tastemasked preparations. The company sells its products in Bangladesh and plans to begin exporting
to both developed and developing countries around the world.
production and import of finished drugs, export, sale, pricing, etc. of all kinds of medicine
including those of Ayurvedic, Unani and Homoeopathic systems. At present, there are 79
Homeopathic companies operating in Bangladesh.
ALLOPATHIC: The Directorate General of Drug Administration under the Ministry of Health
& Family Welfare, Govt. of Bangladesh, is the Drug Regulatory Authority of the country. This
Directorate supervises and implements all prevailing Drug Regulations in the country and
regulates all activities related to import and procurement of raw and packing materials,
production and import of finished drugs, export, sale, pricing, etc. of all kinds of medicine
including those of Ayurvedic, Unani and Homoeopathic systems. At present, there are 258
Allopathic companies operating in Bangladesh.
Tablets: Non-Coated (plain, chewable, dispersible, vaginal)
Coated (sugar coated, film coated, enteric coated)
Sustained/Extended Released (coated, non coated)
Capsules: Granulated Material filled
Pellets Filled
Suppositories: Suppository based
Injections: Vials containing Dry Powder for Injections
Small Volume Liquid Potentials
Liquids: Oral Syrups (Sugar based, Non-Sugar based)
Oral Suspensions
Topical Liquids
Spray, Drops, Ointment, Cream and Powder: Small Volume Sterile Eye & Ear Drops
Small Volume Nasal Drops & Sprays
Topical Ointments & Creams
Topical Antibiotic Powder
Oral Dry Powders: Dry Suspensions (Antibiotic & Anti Infective)
Dry Syrups (Antibiotics)
Dry Powder Inhalers: Partial Filled (Premix) Capsules for Respiratory Tract Application with a
Device
Metered Dose Inhalers: Pressurized Canisters for Oral use with an Actuator
4.1 EXPORT
The export market has shown significant growth over the years. Since 2004, Exports have
increased multifold, with export destinations rising from 37 in 2004 to 84 in 2011.
API
Due to the relaxations provided by TRIPS up to 2016, APIs can bring huge opportunities from
exports. This is because for API (also known as Bulk Drugs), there is no stringent registration
requirement and the operational as well as promotional costs are also nominal. The only
decisive factor in this regard is the cost competitiveness. API can be exported to several
countries if cost effectiveness is ensured.
But being confined to synthesis stage only, Bangladesh has to rely on import of core compound,
solvent and other intermediates. Thus cost effectiveness of local production can be a bit
dependent on import costs. Alongside, these productions often also entail effluent treatment
plans, requiring a high investment. Further, economy of scale is yet to be achieved, and high
investment requirement has troubled achieving entrepreneurs attention.
Formulation
Finished formulations (finished products) have a global market with varying rules and
regulations. In terms of regulatory structure, overseas markets can be categorized in three ways.
First one is the Highly Regulated Markets like USA, UK etc. that require various certifications
like USEDA, UKMCA etc. and need huge investment in facilities and documentation.
Second one is the Moderately Regulated Markets like Russia, Singapore etc. which usually ask
for Bioavailability, Bioequivalence, and Clinical Trials etc.
Third category is the Less Regulated Markets like Myanmar, Sri Lanka, Nepal, Kenya, Yemen
etc.
Bangladesh have already entered less regulated markets. And entry in moderately regulated
markets are already taking place. To continue future growth in exports, Bangladesh will have to
enter the highly regulated markets soon. In this regard, some of the major companies have
already made million dollar investment in their manufacturing and R&D facilities, and are going
for certification in the highly regulated markets.
Pharmaceutical Exports
80
70
60
50
40 32.68
30
20
10
0
2006
67.42
40.21
41.93
2008
2009
46.79
51.68
73.72
56.62
30.39
2007
2010
2011
2012
2013
2014
4.3
Bangladeshi firms that export are slightly more productive than non-exporting firms. Some
possible reasons for this advantage may be due to:
1. Technological lessons learned from foreign buyers.
2. Exporters improved their own technological capabilities to exploit profitable opportunities in
export markets. For example, exporters need to adopt stringent technical standards to satisfy
more sophisticated consumers, and/or they are under more pressure to fill orders in a timely
fashion and to ensure product quality for export markets which are more competitive than
domestic market.
3. Better firms self-selected to enter export markets for the prestige rather than the effects of
exporting necessarily improving the firms.
The pharmaceutical industry in Bangladesh has been aggressively investing in infrastructure.
Most of the companies invested heavily in the 1990s and the late 2000s most likely to upgrade
their facilities to obtain international export certifications. The top ten firms accounted for most
of the investments.
MNCs can operate in a country in multiple ways, including foreign direct investment
(FDI),
arrangement varies in terms of which partner contributes more resources and technical
knowledge, which partner assumes more risk, and which partner accrues more benefits and
profits.
4.4 TRIPS
The WTOs Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)
requires all signatories to legislate twenty-year patent protection for pharmaceutical products
into their domestic law. TRIPS is not a uniform international law, but a framework for
intellectual property protection with minimum agreed standards. While signatory countries must
meet its requirements through legislation, TRIPS provides significant flexibility.
Until 2016, TRIPS provides Bangladesh with domestic, patent-free production rights and
limited exporting advantages. Bangladesh imports approximately 80% of its APIs for domestic
production, 20-25% of which are patented. These API costs will most likely rise as TRIPS
phases in.
Bangladesh enjoys some export advantages from TRIPS. But these advantages are somewhat
offset by the pace and competitiveness of the Indian and Chinese generic markets. In both
markets, companies can produce drugs at highly competitive pricingeven with higher costs
associated with buying patented APIs or paying royalties.
Bangladesh will have to rely on the standard business practices of producing the highest quality
product at the lowest price to compete on the international market. Until 2016, however,
Bangladesh has the following export advantages under TRIPS:
1. Export to any country if the drug is not under patent. Any firm in any country can benefit
from this stipulation. For example, most drugs on WHOs Model List of Essential Drugs are
not patented, as affordability is one of the criteria used in designating medicines as
essential.
2. Export to another LDC or non-WTO country that has not implemented product patent
protection. It seems that most LDCs have instituted patent protection. Only two African LDCs
have not provided for TRIPS- compliant intellectual property protection, one of which was not
yet a WTO member, according to a 2001 Intellectual Property Rights (IPR) Commission
study. In Asia, Myanmar, which is engaged in the WTO accession process, is perhaps the only
country that has not yet put in place a patent protection regime. TRIPS states that any country
using the transitional flexibility period shall not change its laws to result in a lesser degree of
consistency with TRIPS. However, Bangladeshi firms are exporting generic versions of
patented drugs to many LDCs without a problem.
3. Export to a country where the patent holder has not filed for patent protection for the drug.
Companies do not file drug patents in all countries, particularly where sales and profit
prospects are low or there is no meaningful judicial patent protection. These gaps in patent
coverage can be exploited.
4. Export to a country that has issued a compulsory drug license and awarded the production
contract to Bangladesh. TRIPS grants governments the right to issue a compulsory license for
public health purposes, which occurs when a government overrides a patent and grants
another entity the right to produce the patented product. Although Canada, Japan, the United
States and the United Kingdom have all issued domestic compulsory pharmaceutical licenses,
very few developing countries have done so. The expense and time of litigation with
developed countries can act as a deterrent. Governments must also balance fully exploiting
TRIPS flexibilities while maintaining good relations with MNCs, which often use domestic
firms for outsourcing or manufacturing.
Before 2005, many countries could fulfill a compulsory license importation request because
many were manufacturing patented drugs off patent. As of 2005, Bangladesh patented drugs off
patent whereas India and China, the worlds largest suppliers of generic drugs, will no longer be
able to engage in this practice for any drug patented after 2005. Because firms require two to
three years to reverse engineer and start producing a specific drug of quality, if any country
issues an import request for a compulsory license for any drug patented after 2005, Bangladesh
will have an advantage if it is already manufacturing the drug domestically. However, TRIPS
has clearly stated that export for compulsory licensing is intended for health policy not
industrial policy.
The LDCs are exempted from Patent Protection according to the WTO TRIPS policy. This
agreement allows legal reverse engineering and sale of patented product until 2016.This
gives the local pharmaceutical industry an advantage over India and China who do not come
under the exemption agreement.
After entering the global market Bangladesh pharmaceutical industry has made great
progress in export. Between 2003 and 2006 pharmaceutical exports increased to about 61
countries from 51 and quadrupled in value from USD 7.9 million to USD 36.5 million.
Many Bangladeshi companies have acquired international certifications like USFDA,
UKMHRA and TGA, This allows them to penetrate regulated and unregulated markets.
Bangladesh is in a position to emerge as one of the regional R&D centers for Pharmaceutical
Research as reverse engineering has ended in China and India. There is an opportunity to
emulate the Contract Research and Manufacturing Services (CRAMS) model of India.
Currently 80% of the APIs are imported from abroad. But with the establishment of
adequate reverse engineering and API manufacturing facilities the local demand for raw
materials can be met without import.
Bangladesh can provide a strong platform for off-shoring/outsourcing generic bulk and
formulation drugs due to a cheap labor force and established infrastructure. With more and
more western companies looking to cut cost in their manufacture of bulk drugs as they focus
more on the high-cost patented drugs, Bangladesh can present itself as an attractive
destination for off-shoring.
With the establishment of modern technical facilities, the industry can emerge as a regional
hub for pre-clinical testing and clinical trials. The Contract Research Organization (CRO)
model success of India can act as a template to emulate as subject cost will be very low in
Bangladesh compared to that of Western countries.
There is an opportunity for substituting import of vaccines and injectable through
manufacturing it locally.
Many local entrepreneurs are now looking to expand their operations beyond the country
borders. Some are looking to emulate the buying of distressed companies in the west to gain
immediate market access exemplified by the success of Indian powerhouses like Ranbaxy
and. Some are also venturing into newer horizons like biotechnological drugs.
semi regulated countries. To meet all their requirements sophisticated and accredited
manufacturing plant, standardized manufacturing process, proper quality control and above all
highly skilled professionals are required. It is tough to meet all the requirements by small
pharmaceutical companies of Bangladesh.
MEASURES:
Backward integration into API is also very important to reduce import cost.
Providing cash incentive by the govt. to the medicine exporters, like RMG may encourage
pharmaceutical exporters.
International fair arrangement by Export Promotion Bureau (EPB) is a very effective way to
search buyers and to establish business in a new country. A lot of initiative have been taken by
BAPI (Bangladesh Association of Pharmaceutical Industries) in different times, such as, high
level pharmaceuticals delegation team visited foreign countries to explore export initiated by
BAPI. This organization also upheld the demand and urged to the government and other
concerning authorities for API Park, Bioequivalence test laboratory, Central drug testing
laboratory, cash incentives, problems in remit transfer and sample sending etc. But many
issues are yet to resolve.
REFRENCES: