Post-WTO era is of specific significance for pharmaceutical sector of the less developed countries (LDCs) who have been exempted until Jan. 1, 2016 from meeting the patent regulations of World Trade Organizations/Trade Related Intellectuals Property Rights (WTO/TRIPs). For Bangladesh, this exemption period is of particular importance, as Bangladesh is significantly different from most of the LDCs in many aspects. Bangladesh is placed in such a unique position that it can bring revolution in its pharmaceutical sector if the country could capitalize the opportunities optimally.
Pharmaceutical Sector: At a Glance
In Bangladesh, pharmaceutical is one of the fastest growing sectors. In 2004, the total size of the pharma market of Bangladesh was estimated to be 28,416 million taka. With an annual growth rate of about 10 percent, Bangladesh pharmaceutical industry is now heading toward self-sufficiency in meeting the local demand. The industry is the second highest contributor to the national exchequer after garments, and it is the largest white-collar intensive employment sector of the country.
There are about 450 generics registered in the country. Out of these 450 generics, 117 are in the controlled category i.e. in the essential drug list. The remaining 333 generics are in the decontrolled category. The total number of brands /items that are registered in Bangladesh is currently estimated to be 5,300, while the total number of dosage forms and strengths are 8,300.
Bangladesh pharmaceutical industry is mainly dominated by domestic manufacturers. Of the total pharmaceutical market of Bangladesh, the local companies are enjoying a market share of around 80 percent, while the multinationals are having a market share of 20 percent. Out of the top 10 pharmaceutical companies in Bangladesh, eight are local pharmaceutical companies, while only two are MNCs.
The top two domestic manufacturers, namely Square and Beximco Pharma are having a market share of about 25 percent of the total pharmaceutical market of the country.
The finished formulation-manufacturing base of Bangladesh is very strong as most of the pharmaceutical companies have their own manufacturing facilities. Unlike most of the import based countries of South Asia and Africa, 95 percent of the total demand of Bangladesh is being met by local manufacturing. The remaining 5 percent basically constitutes import of very specialized products like vaccines, anticancer products etc.
Overseas Market: Past and Present
The history of pharmaceutical export from Bangladesh dates back to late 80’s. At that point in time, only one or two pharmaceutical companies of Bangladesh took proactive efforts to initiate export of pharmaceuticals from Bangladesh. Despite the fact that there was no support or incentive from the government, these companies with their own initiative started exporting finished formulations to some of the neighboring less-regulated overseas markets like Myanmar, Sri Lanka and Nepal.
After being successful in these less-regulated markets, in early 90’s few major companies of our country also took initiative to explore some of the more-regulated markets like Russia, Ukraine, Georgia and Singapore. Success in registering and marketing these products in these countries was a major breakthrough for Bangladesh pharmaceutical industries. This was a clear testimony not only to our excellent product quality, but also to our capabilities to meet stringent regulatory requirements.
Today, Bangladesh pharmaceutical industry has successfully started exporting its quality products to about 52 countries across four continents. Although volume wise the amount may not appear to be huge, but most importantly it is growing at a very fast pace. Today, Bangladesh is exporting a wide range of pharmaceutical products covering all major therapeutic classes and dosage forms. Beside regular brands, Bangladesh is also exporting high-tech specialized products like inhalers, suppositories, nasal sprays, injectables and Infusions. The product quality, packaging and presentation of our products have been highly appreciated in all the countries we are exporting.
Opportunities for Export
From Jan. 1, 2005 onward, huge export opportunities have already been opened for the pharmaceutical sector. As a signatory of WTO /TRIPs, countries like China and India have already implemented “Patent Laws” in their countries and hence, these countries are no longer allowed to export patented drugs. On the contrary, the situation is just reverse for Bangladesh. As a member of LDCs, Bangladesh has already got the exemption from abiding by the patent laws until Jan. 1, 2016, which is going to open the door to “Enormous Export Opportunities” for the Pharmaceutical Sector of the country. Although, all the 49 LDCs have got this exemption, except Bangladesh all 48 LDCs are basically import based in pharmaceuticals and will not be able to exploit this export opportunity. Bangladesh with its strong manufacturing base in pharmaceuticals is the only country that would really be able to capitalize this opportunity by exporting pharmaceuticals to other LDCs.
Needless to mention that, Bangladesh can also ensure huge value addition by pharmaceutical export since the export price is much higher than the local price. For example, in Bangladesh the price of one fluconazole capsule is Tk. 8 whereas fluconazole is exported to Pakistan at a price of 38 taka. Similarly, the price of paracetamol syrup in Bangladesh is 13 taka but it is exported to Russia at a price of 100 taka.
Nowadays, most of the companies are not interested to invest in manufacturing facilities. Considering the “cost-benefit” of their investments, most of the companies use all of their resources and expertise in marketing. With regards to manufacturing, most of the companies are now going for “toll manufacturing”. As Bangladesh has a very strong manufacturing base in pharmaceuticals, so other countries could get their products manufactured in Bangladesh through “toll manufacturing”. Needless to mention that huge investment has taken place in this sector during the last few years and a number of companies have already constructed facilities as per USFDA and UKMHRA standard and are going for certification in the regulated markets.
Since India and China have very good expertise in API and formulation R&D, they may like to manufacture the APIs outside their countries as they cannot manufacture these “patented” APIs in their countries after 2004.
Because of cost advantage, large pharmaceutical companies of highly regulated markets are now going for joint venture projects. They have already signed several contracts with companies of India and China. Bangladesh also has enormous opportunities to go for joint ventures with these large global companies for manufacturing pharmaceutical finished products.
(Writer is the secretary-general of Bangladesh Association of Pharmaceutical Industries.)