Bangladesh, a country having an image of poverty, cyclone and floods around the world, is slowly but surely emerging as a country with a lot of potentialities. The journey started with readymade garments (RMG) industry. The country's image abroad, which was poor so long, made a reverse swing with the flourishing of RMG sector and Bangladesh showed up in the world map as a country with a promise, though not recovering fully from the curse of poverty, disease and hunger. Of late, the booming pharmaceutical sector, capitalising on the benefit it achieved from the patent waiver, under a deal of world trade organisation (WTO), has entered into a favourable business environment in the global market and has given a new dimension to the image of Bangladesh.

The local pharma sector scenario underwent a drastic change with the introduction of National Drug Policy in 1982. Within a short span of ten years, i.e. by 1992, Bangladesh companies held control over more than 60 per cent of local production with the top 5 local companies claiming a stake of 45 per cent in local sales. The import of drugs also substantially declined and the total import came down to less than 15 per cent. After 16 years, the scenario has further changed raising high hopes for the future of the country. The local drug companies are now meeting 97 per cent of the country's requirements and only high-tech drugs comprising of 3 per cent are imported. As per the latest report, 30 companies have already exported to 68 countries and negotiations with a few more are in progress.

Global scenario
As per IMS, a research organisation, the total sale in 2005 stood at 602 billion dollar registering an increase of 7 per cent. Only 10 countries, including America, Europe and Japan reported a stake of 80 per cent in the global sales which shows an increase of 5.7 per cent. In pharmaceutical market, Latin America has also come up as a potential market. In 2005, it recorded an increase of 18.5 per cent in sales. At the year end, Latin American market was worth 14 billion dollar. The Asia-Pacific and African countries are also not lagging behind. In 2005, they recorded an increase of 11 per cent and the volume of total sales was 46.4 billion dollar.

Bangla Pharma
Against the backdrop of world market, Bangladesh pharmaceutical industry recorded a 10 per cent growth, one of the fastest rate ever witnessed in the past. A recent report of ADB reveals that the export of pharma products to global market is increasing at a robust rate of 40 per cent per year and the industry's market share stood at US $500 million last year.

There are more than 200 pharmaceutical companies in the country, of them 20-30 are big and all these big ones have state-of-the-art manufacturing facilities. Among the leading companies that invested heavily in quality control in recent years are Square, Novartis, Beximco, Aceme, Opsonin, Incepta, ACI, Roche, Renata and Orion. On the other hand, in terms of sales turnover in the recent period, the top 20 companies are Square, Beximco, Acme, Incepta, Eskayef, Sonafi-Aventise, Renata, Novartis, Drug International, ACI, Aristopharma, GlaxoSmithKline, Opsonin, Orion, Nuvista, Healthcare, Ibn Sina, Novo Nordisk, Roche and General Pharmaceuticals.

Bangladesh annually exports more than Tk 1.80 billion worth of drugs to 68 countries, including the UK, one of the most regulated markets in the world. The concerned circles hold the view that if proper support from the government is provided, this sector will be able to export Tk 20 to 30 billion worth of medicines per annum. The recent accreditation of UK-based Medicines and Healthcare Products Regulatory Agency (MHRA) to Square and Renata paved the way for increased exports of Bangladesh pharmaceutical products to European countries.

Square Pharmaceuticals and Renata Ltd. have already obtained UK MHRA accreditation, the qualifying yardstick to export products to UK market. More local companies are on the way to get the UK MHRA accreditation by April 2008, which will facilitate Bangladesh's export to European and other developed countries," a Bangladesh Association of Pharmaceutical Industries (BAPI) source said.

Recently, Beximco, a leading player in the pharmaceutical market, made a major breakthrough by completing all formalities for exporting to highly regulated market like GCC.

Bangladesh now produces more than 5,000 registered brands with over 8,000 different dosages in different forms and strengths. The export items cover wide range of products of all major therapeutic classes and dosage forms. It includes high-technology products like inhalers, suppositories, nasal sprays, injectibles and infusions. More than 200 companies are producing drugs in the country but the very basic problem is that the manufacturers are still dependent on 85 per cent of imported raw materials. But initiatives are in place now to set up new industries to produce raw materials and the country's pharmaceutical sector will see a further fillip once these factories start delivery.

BAPI
According to S M Shafiuzzaman, president, Bangladesh Association of Pharmaceutical Industries (BAPI), as the apex and premier pharmaceutical trade and promotion body of Bangladesh, BAPI has been very actively working on the industry development programmes to enhance the existing capability and also to promote the country's industrial opportunities among the developed world by attracting prospective collaborators in terms of technology, product sourcing, infrastructure etc. "At present, our major focus is on increasing our bulk drug manufacturing capacity and the technology to attain self sufficiency. On the formulation front, our industry has achieved substantial growth by now. So that, we are even capable of catering to other markets including regulated markets besides domestic demand."

Domestic Market
New and old pharmaceutical companies are making investments in a big way in the sector, seeing immense export prospects for their products. New investors are also making ventures in this thrust sector. The Department of Drug Administration sources said now 25 new companies are seeking nod from the regulator to start business.

New generation companies like Silva, Mystic, Apex, Rangs, Popular, Supreme and Healthcare Pharmaceutical have already invested around Tk 400-500 million each. An Indian company - Sun Pharmaceuticals - has also made its debut in Bangladesh recently. Square Pharmaceuticals has invested Tk 2.40 billion in a plant at Kaliakoir, Gazipur. Besides, Opsonin and Orion have plans to invest more than Tk 1.00 billion and Tk 1.0 billion, respectively to set up new plants at Barisal and Bhaluka, Mymensingh, respectively.

Also, Acme has spent Tk 700 million to refurbish its plant and has invested another Tk 200 million for a separate plant. Other big players also have plans for further investment, industry sources said. Not only the big shots but also mid-ranking and new houses have also come up with big investments. Renata bought 55 acres of land in Gazipur to set up a new plant at a cost of Tk 700 million. Incepta has built up a new plant at Ashulia, Dhaka with an investment of around Tk 700 million. Aristopharma has bought several plots in Narayanganj BSCIC estate to set up its new plant. Exports

In 2006-07, total export was US $28.12 million with a growth rate of 47 per cent. Pharmaceuticals export rose to $15.72 million in the first eight months of the 2005-06, while it was $14.21 million during the same period of previous fiscal year, according to Export Promotion Bureau (EPB) statistics. Bangladesh fetched $21.26 million in 2004-05 financial year by exporting pharmaceutical products to different countries and the earnings had been $12.69 million in 2003-04 and a mere $9.05 million in 2002-03. The country now exports a wide range of pharmaceutical products covering all major therapeutic classes and dosage forms to around 68 countries including some developed markets. High-tech specialised products like inhalers, suppositories, nasal sprays, injectables and infusions are also being exported.

A senior EPB official said that the country's export earnings from the pharmaceutical sector hit the highest ever Tk 1.65 billion in 2005, the very first year of patent waiver, which is almost double compared to that of the previous year.

According to local experts, now Bangladesh has the potential to export more than US $1.5 billion from this sector. "If Bangladeshi companies can capture a chunk of the international markets, some of them will achieve tremendous growth. Exposure to international markets will enable the companies to learn and be more competitive, and as they grow and learn by doing, they may even be at a point to invest in research. In fact, it is important that Bangladeshi companies reach that level by 2016."

But immediate concerns such as marketing challenges abroad and delay in policy implementations at home are standing in the way of making the best out of the opportunities created by the TRIPS agreement. Companies here complain that Bangladesh has a poor image abroad and it is often somewhat difficult to convince foreign investors that a country like Bangladesh produces quality products. In addition, Bangladesh Bank has set very low ceilings on foreign currency allowed to spend on rent and send product samples. If companies cannot set up reasonably impressive offices at the business hubs of foreign countries, what image are they going to build there when the nation itself suffers from a poor image syndrome?

What is more surprising is that from a foreign exchange accounting perspective, it makes little sense to put up low ceilings on expenses that are meant to bring in foreign exchange in return. If providing US $10,000 a month for operation of an office on a foreign land can bring in US $50,000 in export earnings, what logic is there for not providing US $10,000 in the first place?

Need for creating awareness abroad
Lack of much needed information, especially about the overseas market and product registration is another problem for the pharmaceutical companies when they intend to go for export. As per Bangladesh Bank regulation, any company, which opens a representative or marketing office in a foreign country, is allowed to remit only US $30,000 per year (or US $2,500 per month). This amount is not at all adequate in view of the nature of pharmaceutical business and its huge potentials.

In Moscow and Singapore, only the office rent per month is US $10,000 and US $5,000, respectively and the operational expense per month is around US $25,000. In Europe and Latin America, this expense is much higher. Considering this, necessary modifications should be done in the Bangladesh Bank regulations so that the pharmaceutical exporters can transfer at least US $25,000 per month to a country.

According to the export policy, there is limit on sending product samples - it is restricted to US $5,000 per year. For a country with such enormous export potentials, this limit is not at all adequate.

In the overseas market, the awareness regarding the brands of Bangladesh is insignificant or negligible. So, in order to establish these brands, the pharmaceutical exporters need to promote them to the doctors with literatures and proper samples.

So, they need to send huge promotional samples abroad. Considering this, there should not be any limit in sending products samples for promotion. Participating in the international fairs can also play vital role in developing the required awareness regarding the Bangladeshi companies as well as their brands in the overseas markets. So, the exporters need to send a sizeable quantity of samples for display in the international fairs. Considering this, the limit for sending samples for such fairs should be withdrawn, a leading market operator said.

APIs
All said and done, an active pharmaceutical ingredients (API) park is an urgent need for the rapid growth of country's pharmaceutical sector to exploit huge potential of export earnings. The locally produced pharmaceutical ingredients can meet 30 per cent of internal requirements at present. Most of the APIs and machinery are sourced from India, China, UK and other European countries. The establishment of the park and operations of the pharmaceutical units will help meeting 70 per cent of local requirements and pave the way to exporting APIs.

(The writer is the Editor, THE PHARMA WORLD, Dhaka, Bangladesh and can be reached at thepharmaworld@gmail.com).