Bangladesh pharmaceutical sector: an overview

Bangladesh is the eighth largest densely populated country of the world which is 2.3 per cent of the total size around the globe.With this population, Bangladesh has an emerging economy in the world. During the last 10 years, the GDP growth rate is consistently >6.5 per cent and industrial or manufacturing growth rate is 11.2 per cent which is remarkable.

In the health sector, Bangladesh has emerged rapidly during the last 10 years. The infrastructure has developed during this period.Bangladesh has achieved tremendous success in pharmaceutical sector as well.Pharmaceutical industry is using state-of-the-art manufacturing technology and highly skilled human resources. This industry is the fastest growing sector in Bangladesh. The domestic market size is US$1.136 billion with a growth rate of 23.59 per cent in 2011. During the last several years, this sector is having significant growth. Within next 4-5 years, the expected market size of Bangladesh would be around US$ 2.5 billion per year.

The pharmaceutical industry of Bangladesh is a wonder and one does not require a degree in finance or economics to be able to see the truth in this statement. In a country characterized by political instability and omnipresent corruption, while almost every other form of industries is facing impeding obstacles, the relative calm and stability conspicuous in the pharmaceutical industry are astonishing.

There are 260 registered pharmaceutical companies, among which 191 are in operation. The manufactured products of these companies are meeting 97per cent of the domestic requirement. Some vaccines, anticancer products, hematological products, biotech products are being imported. These 191 companies are marketing more than 1350 molecules with 23500 brands in the country. Bangladesh pharmaceutical industry is dominated by the local pharma companies, i.e. 90 per cent of the market share is owned by the local companies. Top 20 companies are enjoying 82 per cent market share.

Bangladeshi pharmaceutical companies plan to strengthen their global foot-print as they target to take their products to 30 new destinations within 2013-14. Country's pharmaceutical industry has made big strides since the enforcement of the National Drug Policy back in 1982. The sector has gone through a ‘sea change’ over the last three decades. The multinational pharmaceutical companies that once used to dominate the sector now have an insignificant presence. At present, Bangladesh exports pharma products to 87 countries, including the US and a few European nations, after meeting 97 per cent of the local demand by the domestic companies, some of which are fitted with most modern and state- of-the-art manufacturing facilities. The pharmaceutical sector has also been making its mark in the field of export. Last year, the country fetched over Tk.4.0 billion through export of medicines. The export potential is, however, far larger.

Pharmaceutical export is contributing substantially to the GDP of the country, and every year, this contribution is increasing at a greater pace. In terms of foreign currency, pharma sector has been ranked as the second largest potential sector in Bangladesh.

While Bangladesh’s earnings from remittance and RMG exports are facing threats due to global economic and political reasons and domestic problems the impressive prospect of pharmaceutical export is reassuring.

According to the IMS, the size of Bangladesh's domestic drug market was $977 million in calendar year, 2010, $797 million in 2009, and $686 million in 2008, on the basis of moving annual total (MAT).

The IMS, a US-based organization, has been providing pharma market intelligence to more than 100 countries over the past 50 years. Its factual data are based on the country's retail sales only. Institutional sales and import of drug has remained outside the purview of the study. The market size has doubled over the last

five years, mainly due to increased penetration by the local drug manufacturers.

Accounting for just 0.2 per cent of non-OECD pharmaceutical exports in 2009, Bangladesh has a tiny share of the global market – 0.01 per cent in 2009. Even so, it has by far the largest pharmaceutical sector, and the largest pharmaceutical exports, of all Least Developed Countries.

Exports of pharmaceuticals from Bangladesh are still small in scale at just around US$ 67.45m in 2012, worth approximately five per cent of the value of sales in the domestic market. However, they are increasing rapidly – at a compound annual growth rate of 26.1 per cent between 2002 and 2012. Most of the growth is coming from exports to middle income countries and to nearby low income countries (Myanmar, Afghanistan, Nepal). While exports to the EU reached almost US$15 million in 2007, they have fallen off since. Most exports are to markets where pharmaceuticals are unregulated to medium regulated. Even relatively lightly regulated markets can be challenging to access, with significant delays to obtaining approval.

The Bangladesh Pharmaceutical Industry Association has set out a vision of growth for the future, called Pharma Vision 2015.

Major points set out in the vision include

• “To safeguard public health of 160 million people (i.e. Bangladesh’s population) by providing quality product to be produced by all companies”
• “To become a global hub for pharma industry”
• “To export generic products worth US$ 5 billon”.
• “To get approval for 30 companies by the regulatory authorities of developed countries”
• “To get DMF/EDMF16 of API for 40 API producing companies”

The major factories of the sector have achieved some ‘degree of excellence’ and obtained international recognition, such as US certification from the FDA, UK certification from the MHRA & TGA from Australia.

Bangladesh is taking the advantage of TRIPS agreement as being a LDC is exempted from patent protection until 2016. Bangladesh is a market of cheap labour. That’s why MNCs are interested for contract manufacturing and strategic alliance. Moreover, skilled personnel are produced in the country. Presently, Bangladesh is getting the leverage from TRIPS agreement being one of the LDCs, so that we can manufacture even varieties of patented molecules and export them, mainly to other members of LDCs because they are not as well-equipped as Bangladesh. Bangladeshi pharmaceutical companies have already developed their manufacturing facilities with skilled and trained personnel since its independence. The pharma companies earned the potential to easily penetrate into all the LDCs, some Asian and African moderately regulated countries. In addition, pharma industries of Bangladesh are now on the verge of entering into highly regulated overseas markets like Australia, USA and Europe. So it is just a matter of time for Bangladeshi companies to become a major ‘generic player’ in the globe.