The Bangladesh pharmaceutical industry is looking at the export market along with initiatives to strengthen its active pharmaceutical ingredient (API) production to leverage maximum benefits of Least Developed Country (LDC) status allowed by the World Trade Organisation (WTO).
So far, the country has performed well in the domestic market with its strengths in formulations segment. The Bangladesh pharmaceutical industry is now estimated to satisfy almost 85 to 90 per cent of the domestic medicine market worth US $503 million. The domestic companies also engage in exports of pharmaceutical products to 86 countries. The Bangladesh market is growing at a rate of 10 per cent per annum.
The pharmaceutical industry in Bangladesh is largely dominated by domestic producers like Square Pharmaceuticals Ltd, Beximco Pharmaceuticals Ltd, Aristopharma Ltd, Amico Laboratories, The ACME Laboratories Ltd, Eskayef Bangladesh Limited and Incepta Pharmaceuticals Limited. Multinational companies like Novartis and Sanofi Aventis have their offices in Bangladesh.
Naturally, the benefits of exemption is expected to take the country's drug industry towards market leadership in global arena. The efforts of the industry are in line with these estimations, but the country's feeble presence in API sector act as a stumbling block to these efforts. According to available reports, the pharmaceutical companies need to import 80 per cent of the raw materials from other countries.
API park
The industry and the interim government in Bangladesh is all set to set up an Active Ingredients Park (AIP) by 2008. The government will set up the API facility at an estimated cost of over Tk 4.52 billion (Tk 452 crore) on 300 acres of land in Pausia-Lakkhipur area in Munshiganj district.
The government has been working on the project for the last few months and has sought financial assistance from development partners to set up the park. The World Bank has agreed to provide funds after the completion of a study on social and environmental aspects of the project.
In order to avail aid from the monetary firm, the government has to submit a study report on social and environmental aspects, before allocating the grant to the government for the project. It is learnt that the UK-based Department for International Development (DFID), in principle, agreed to conduct the study by October 2007.
The project, which would be implemented by the government body - Bangladesh Small and Cottage Industries Corporation (BSCIC) -, is expected to be under the management of BAPI. Along with the development partners, the government will bear the project cost from its own fund.
Available information is that the park will have a total of 50 plots for 50 industries, each with 5 acres of land. The park is estimated to generate employment for 19,500 people. The industry hopes that the park will make the country self-sufficient in drug research with quality medicinal plant and effluent treatment facility to meet the requirements of international standards.
The project, which was in cold storage for a long period has been refreshed by the government, with the initiative of Bangladesh Association of Pharmaceutical Industries, (BAPI) is aimed to cash in on the waiver of patent laws offered by World Trade Organisation upto 2016.
WTO waiver benefits
The waiver facility of WTO from its trade agreement has enabled the country to export patented drugs without any limit to other LDCs having no or inadequate drug manufacturing facilities until January 1, 2016. The decision to allow the concession to the LDCs to access essential commodities, including medicines has been taken by the Council for Trade related aspects of intellectual property rights (TRIPS) on June 2, 2003, in accordance with the recommendations of the WTO's Doha Ministerial held in 2001.
The pharmaceutical industry in Bangladesh is exploring the opportunities by increasing its sales to other LDCs, mostly in African continent. The industry, which faces stringent price regulations in domestic market, eye on a huge opportunity in exports, where the drug price is higher than in Bangladesh, to leverage the benefits offered by the TRIPS exemption. The products that are marketed in the country is less than Tk 20. The figure may go up to more than Tk 90 in an overseas market.
The country currently earns around Tk 600 million a year from medicine exports. The implementation of API park project to facilitate local production of raw materials at a low cost with incentives from the government will skyrocket the export earnings to billions of Tk within three years, according to the industry experts.
In order to grab the opportunity, the top domestic pharmaceutical industries like Square and Beximco and multi national firms like the Swiss-based Novartis have increased their production capacity in the last few years. While the local pharmaceutical companies are enjoying a market share of more than 80 per cent, the multinationals have a market share of 20 per cent in domestic market. Both the groups are pursuing export opportunities in the country with strategic movements.
Bangladesh began small-scale export of drugs and medicines after 1980, when a few number of domestic manufacturers took initiatives for exporting their pharmaceutical products to foreign countries. The primary market destinations were some less-regulated neighbouring markets, including Myanmar, Nepal and Sri Lanka.
Further, in the beginning of 1990, the pharma companies made inroads in some of the partially regulated markets with an increased strength of companies on expedition. This time, the destinations included countries like Russia, Ukraine, Georgia and Singapore. The success in entering these markets was viewed as a major breakthrough for the Bangladesh pharmaceutical industry.
From this humble beginning, the companies expanded their operations to venture into more regulated European markets. The local news agencies reports that four leading pharmaceutical companies of Bangladesh - Incepta, Square, Beximco and Renata pharmaceuticals - are planning to foray into European markets by 2008 with their product basket.
The export is expected to grow leaps and bounds high with the government initiates to make the regulatory standards more stringent in future. As mentioned earlier, the stringent price control measures taken by the Bangladesh government have diverted the local players' focus to overseas market.
Price control policy
There are two types of pricing of drugs in Bangladesh - controlled and decontrolled. Price of decontrolled drugs is proposed by the manufacturers, while the government fixes the price for essential drugs for domestic market.
In 1982, the government listed 150 drugs as essential medicines and fixed affordable prices for the medicines under this category. In 1994, the government identified 117 items as common used drugs. While the industry bodies' demand for re-fixation of price of these drugs for the companies to make the business more viable, the health experts are seeking inclusion of more number of drugs in the list as soon as possible. The officials, through the media, has assured the concerned parties that it is planning to come up with a reformed list of essential medicines and prices.
The industry and the people in Bangladesh are looking for a total reformation in the drug policies, on which the government is working on for quite some time. As per reports, Bangladesh is in the process of revising its national drug policy.
Drug policies
The Bangladesh has come up with Drugs Act in 1940 to regulate the import, export, manufacture, distribution and sale of drugs in the country. The act is in the same nature of the drug regulatory act introduced by the government of India on April 10, 1940. The act was adapted in Bangladesh in 1974 through Bangladesh Laws (Revision and Declarations) (Amendment) Act-1974 as Act No. LIII of 1974.
The Drugs (Control) Ordinance enacted in 1982 is expected to control the manufacture, import, distribution and sale of drugs in Bangladesh. This ordinance was made and promulgated by the Chief Martial Law Administrator of the People's Republic of Bangladesh on June 11, 1982 as Ordinance No VIII of 1982.
Bangladesh government became the first country in the world to introduce the principles of Alma-Ata and the essential drug concept into practice through the adoption of a drug policy in 1982. The policy is a course of action adopted and pursued by the government for rational use of substances used in medicine either externally or internally for curing, alleviating, or preventing a disease or deficiency.
The main objectives of the existing National Drug Policy of Bangladesh are:
■ To prepare a basic list of 150 essential drugs and a supplementary list of 100 specialized drugs
■ To use generic names for the manufacture and sale of the 45 primary care drugs
■ To prepare and publish a National Formulary by 1983
■ To eliminate product patents and limit the use of process patents
The Directorate of Drug Administration, under the Ministry of Health and Family Welfare, is currently initiating stringent legal actions to curb malpractices in the industry and traders. The recent efforts by the authority, under the newly appointed director of Drug Administration Sarkar MA Matin, is in the direction of tightening the rules and laws to sack the promoters of spurious and counterfeit drugs, it seems.
The drive also includes verifying drug prices at the wholesale and retail markets and the administration has reportedly recovered about 200 brands of contraband and unauthorised drugs worth about Tk 30 lakh smuggled into the country from different countries including India, Pakistan, Thailand, UK and USA.
The government's efforts to ensure the quality of products in the country will give more authenticity to the Bangladesh drug manufacturers in global market. Apart, the industrial venture to grow in export market will enhance the performance of the pharma sector in Bangladesh.