The pharmaceutical industry, one of the fastest-growing sectors in Bangladesh and contributing hugely to the country's economy,is forging ahead with a renewed thrust on exports as well as with an all round growth in local sales.
As manufacturers pursued an aggressive marketing strategy, medicine exports from Bangladesh witnessed an impressive jump in 2010. At the same time growing health consciousness in both urban and rural areas, advanced manufacturing processes and new investments in the sector boosted local sales. Moreover the country's economic development, rising remittance earning and robust agriculture production also helped drive the local sales.
There are 250 small, medium and large local and multinational pharmaceutical companies operating in Bangladesh. The local companies supply 97 per cent of their pharmaceutical needs and produce more than 500 types of medicine.
High-quality pharmaceuticals are being exported to more than 70 countries, including many LDCs, to meet primary health care needs. The export of the country's pharmaceutical drugs started at first to neighbouring countries like Myanmar, Sri Lanka and Nepal. Soon it spread to regulated markets in Asia, Africa, Europe and the Middle East as the country started to produce quality drugs.
Renowned hospitals and institutions in various countries, including Kenya, Pakistan, Singapore and Sri Lanka are using Bangladeshi drugs for treatment, according to an ADB report. There is also the advantage of low-cost labour in Bangladesh, which is sough to be tapped by major multinational companies shifting their production here
The pharma market here has grew 18.4 per cent last year alone, and is also one of the most technology-oriented sectors. Pharma exports increased by 11.39 per cent in July-May of the fiscal 2009-10 and the sector earned around Tk 268 crore.
As many as 15 Bangladeshi pharmaceutical companies received prospective export orders amounting to US$ 29.08 million in a single country trade fair 'Bangladesh Pharmaceuticals Expo-10 held in Manila recently.
According to a report published by Intercontinental Marketing Services (IMS), the global intelligence agency for the pharmaceutical market, local sales stood at Tk 5,781 crore in the period.
Shipments of pharmaceutical products grew 14 per cent to US$35.40 million during July- April period of fiscal 2009-10 over $31.22 million earned in the same period of last financial year, according to Export Promotion Bureau data.
There had been a surge in order from Western buyers following an aggressive marketing policy pursued by the local pharmaceuticals, Abdul Muktadir, general secretary of Bangladesh Association of Pharmaceuticals Industries (BAPI) said recently.
"Now, we are getting more and more orders as the situation is improving worldwide following an economic meltdown," he said.
He said the exports slumped in 2009 initially due to fall in demand from many importing countries that were hit hard by the recession. "But we have strongly come back and the order is increasing," he told.
Many African and South American countries, major buyers of Bangladesh drugs, also faced currency devaluation, he said "But currently they have come back and started importing medicines again."
Bangladesh's reputation as world-class drug producing country has also helped regain the market, he added.
Bangladesh has immense prospect to emerge as an alternative source of medicines for the US after China and India, thanks to more international accreditations and rising domestic sales.
Abdul Muktadir expects that at least 25 of the 203 local makers, now in operation, will gain international accreditation.
Dwelling on the better chances now open for Bangladesh as a medicine exporting country, he pointed his finger at China's rising domestic demand for medicine. Perhaps, at one stage the Chinese companies will remain confined to merely meeting their local demand, rather than exports, Muktadir says.
Another positive development in the world pharmaceutical market, he says, is US President Barack Obama's new healthcare policy. This policy ushers in a possible $150 billion USA market expansion.
“If Bangladesh can make an entry to this market, it will be a big boon for Bangladesh pharmaceutical sector,” Muktadir said.
If the present growth continues, he says, the local drugs sales will reach $1.7 billion by 2014.
Such sales will touch the $1 billion mark by 2011, $1.3 billion by 2012 and $1.5 billion by 2013, Muktadir says. Last year, local sales stood at $796 million, while the figure was $526 million in 2005.
He also expects around $1 billion investments in the industry within the next few years to maintain the present growth.
Explaining Bangladesh's basic strength, Muktadir said skilled manpower flow is one of the main drivers. The country's 40 universities churn out thousands of pharmacist, biochemist, doctor and engineer every year.
According to Abdus Sabur Khan, organising secretary of BAPI, locally manufactured medicines are of high quality as the manufacturers maintain the GMP.
The country's pharmaceutical companies, including Incepta, Beximco, Renata, Eskayef and Square, have recently obtained quality certificates from European countries, say industry insiders.
Muktadir forecasts a significant growth in drug export over next two to three years with functioning of the Active Pharmaceutical Ingredient Park."The export is increasing significantly. During this fiscal year, we have seen a significant jump in shipment. We hope this trend will continue in the coming days," he said.
Setting up of a specialised park for the pharmaceutical industry will help Bangladesh to get rid of import dependency through producing basic raw materials locally and will make its pharmaceutical industry globally more competitive, cost-effective and increase export volume through producing quality products.
Currently the pharmaceutical sector imports 60-70 per cent of its basic raw materials from the international market. Though there are 250 small, medium and large local and multinational pharmaceuticals operating in Bangladesh, while only seven are producing raw materials.
Though Bangladesh has the strongest base to manufacture pharmaceutical products among the Least Developing Countries (LDCs),the country at present is addressing the need of the basic raw materials for the industry through importing from India, China, Italy and Germany.
Once the park becomes a reality the local pharmaceutical companies would be able to produce world's best quality products through minimizing production cost and be able to export it at high prices apart from addressing local requirements with affordable cost.
With this the the pharmaceutical industry in Bangladesh would be able to boost its global competitiveness through producing world's best quality products .
The specialized park will help Bangladeshi pharmaceutical companies to be prepared for maintaining growth in local sales and exports and remaining competitive in the post-2016 period, when patents will be imposed on all generic drugs, according to officials of pharmaceutical companies.
The soaring drug manufacturing costs in the highly regulated western market has prompted major pharmaceutical companies to contract out drug making to companies in low-cost countries.
This has provided huge opportunities for Bangladesh. Low labour and power costs, depreciation of US dollar against most currencies and comparative advantages for Bangladesh under the WTO's agreement on Trade-Related Aspects of Intellectual Property Rights have inspired many global pharma giants to set up their contract manufacturing base in the country, say industry insiders.
Studies conducted by the Bangladesh Pharmaceuticals Society (BPS) have found that contract manufacturing by local companies could earn export revenues worth approximately BDK200 billion (US$2.9 billion) a year.
According to some experts, Bangladesh can export drugs worth Tk200 billion a year if the local medicine makers upgrade their facilities to a level that’ll enable them to do contract manufacturing for foreign pharmaceuticals.
According to analysts, Bangladeshi pharmaceutical companies should prepare to maintain growth in local sales and exports and remain competitive in the post-2016 period, when patents will be imposed on all generic drugs. While upgrading product quality is one major area the companies should focus on, other areas include capacity building in research and engineering, opine experts.