Owing to the the supportive government policies, faster clearances of projects and the rapid expansion of the market-based economy, Bangladesh is seen as the next investment destination for Indian pharma companies. Several Indian players are scouting for collaborations and setting up facilities to increase their footprint in the region.
Other factors that make Bangladesh an attractive destination are the increasing potential of its domestic market, cost competitiveness , access to workforce, demand-driven growth model, quality of logistics and transportation that helps to accelerate its prospects as a manufacturing hub, large presence of industry, business environment with investor-friendly regulatory environments.
What we are seeing in Bangladesh, is a speedy development of infrastructure like transportation, communication, water and power distribution. These are clear tracks to drive industrial growth. In fact, there has been a steady six percent growth over the last few years. The country is also seen to be a performer in the wake of the global economic slowdown. says a section of pharma entrepreneurs.
The key factors that drive pharma manufacturing investments in the active pharmaceutical ingredients space, is the formulation development activities there. There is also access to affordable labour which makes manufacturing far more cost-effective, they point out.
Economic policies are designed at promoting private sector. There are efforts to privatize the public sector enterprises and liberalizing the import regime . These are factors which could accelerate investments from India. The Indian pharma companies are working towards identifying locations abroad to take off much of the drug manufacturing activities.
Pharmaceutical industry is one of the fastest growing sectors in Bangladesh. During the last several years, this sector has witnessed significant growth. Within next 4-5 years, the expected market size of Bangladesh would be around US $ 2.5 billion per year. It is expected that within next few years Bangladesh will be a leading global player in drugs and pharmaceuticals.
According to some experts, this is prime time for Bangladesh’s pharma sector. It has the potential to become a global manufacturing hub for generics like India and China. The country’s biggest comparative advantage is cost. Prices of Bangladeshi generics are the lowest in the world , almost one-tenth the price of Western drugs and up to 20 per cent cheaper than those made in India.
Despite the economic recession due to continued political disturbances, there has been significant development in healthcare service and pharma sector in Bangladesh.
According to IMS , Bangladesh pharma market size is more than Tk 10000 crore per annum. From Tk 4700 crore in 2008 it has almost doubled in five years to Tk 10000 crore now. The reason for increase in the size of the market can be attributed to expansion of government. and private health network throughout the country. There has been a fresh investment Tk600 crore in the pharma industry which has also been responsible for increase the growth rate of industries.
The sales of chronic care medicines have increased considerably. Whereas in 2000 it was 15 per cent of the total market, in 2012 it has gone up to 23 per cent which indicate that the purchasing power of the people has increased and also the people have also become more health conscious.
There are 267 registered allopathic pharma companies. The average market growth is approximately 12 per cent. More than 90 per cent of the market share goes to top 30 companies. Local companies have the dominance over the market. Among the top 10 companies, all are local. Multinational companies (MNCs) have a share of approximately 11 per cent of the market. Locally manufactured drugs meet more than 97 per cent of countries total demand for pharmaceuticals.
The market has been expanding fast with an annual growth rate of 24 per cent. The sector is the second highest contributor to the national exchequer in terms of revenue contribution. The pharma industry in Bangladesh is the largest white-collar intensive employment sector where highly educated pharmacists, engineers, microbiologists, chemists, biochemists and other professionals have been employed. About 97 per cent of total demand for pharmaceutical in Bangladesh is met by local manufacturing.
There are tremendous opportunities of Bangladesh pharma industry both globally as well as locally. Local opportunities come from the nations GDP growth, which averages more than six per cent per annum. As people are now becoming more health conscious and are seeking better access to modern healthcare facilities, the local market growth is expected to get a boost in the coming days.
As far as global sale is concerned, sky is the limit. Bangladesh has the best infrastructure in manufacturing quality medicines at the lowest cost among all Least Developed Countries (LDCs).
With its skilled manpower, hi-tech equipment and low cost labour, Bangladeshi drugs are among the cheapest in the world. Among 49 Least Developed Countries (LDC), Bangladesh has the best infrastructure to manufacture world-class pharmaceuticals.
Bangladesh is a market of cheap labour. That's why MNCs are interested for Contract Manufacturing and Strategic Alliance. Presently, Bangladesh is getting the leverage from TRIPS agreement being one of the LDCs, so that it 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.
During the last three years, around US$ 500 million was invested for expansion of the facilities and new entries. Different pharma companies have international certification due to their infrastructure development and maintenance. Bangladesh is taking the advantage of TRIPS agreement as being a LDC is exempted from patent protection until 2016.
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 major generic players on the global stage.