"The pharmaceutical industry in Bangladesh emerges as a cornerstone of innovation and healthcare, fostering a robust presence in the global market. In the midst of evolving healthcare dynamics, Bangladesh's pharmaceutical prowess stands poised to shape the future of medicine and well-being on a global scale."
The primary feature of Bangladesh's pharmaceutical industry is the prevalence of Allopathic medicine, which stands for both traditional and contemporary medical procedures. The manufacture of allopathic medications is closely linked to all major pharmaceutical corporations, with rights given under the Trade-Related Aspects of Intellectual Property Rights (TRIP) agreement and regulation by the Directorate General of Drug Administration (DGDA) facilitating this connection.
The primary products of Bangladesh's pharmaceutical industry include antiretrovirals, vaccines, and generic medications.The Daily Star reports that 98 percent of the country's pharmaceutical needs are met by regional firms, which place a deliberate focus on treating chronic illnesses in line with changing healthcare patterns.
The global pharmaceutical market is expected to be worth USD 1.6 trillion in 2023, according to Statista databases. The nation is exempt from patent protection until 2033 as a result of its upcoming LDC graduation in 2024, allowing local businesses to produce patented drugs without fear of repercussions.
Since China and India provide 90 percent of the industry's supply of active pharmaceutical ingredients (APIs), the value chain is vulnerable to possible disruptions and challenges like price adjustments. This makes the industry's heavy reliance on imported excipients and APIs a serious concern.
Recognizing the vulnerabilities associated with API dependency, the government is taking proactive measures to enhance backward linking. The establishment of API parks, which are scheduled to open for business in 2022, and the passage of tax advantages for API manufacturers demonstrate a commitment to reducing reliance on foreign suppliers.
By 2025, Bangladesh's pharmaceutical industry is predicted by BIDA to grow to a value of over USD 6 billion. Despite the challenges posed by the pandemic, the industry has shown resilience, particularly in light of the fact that 98% of the demand for finished pharmaceutical products is satisfied locally. However, the fact that more than 90% of raw materials and APIs are imported suggests a heavy dependency on them, which has some hazards.
Even though Bangladesh's pharmaceutical industry has expanded dramatically, the nation still heavily dependent on imports of Active Pharmaceutical Ingredients (APIs) for a variety of reasons:
a) Lower Costs: Manufacturing facilities for active pharmaceutical ingredients (APIs) require significant up-front investments and specialized knowledge. The manufacturing of Active Pharmaceutical Ingredients (APIs) by respectable foreign suppliers, who can benefit from economies of scale, is currently more cost-effective than that of domestic producers.
b) Limited raw materials: Some of the essential raw materials needed to make active pharmaceutical ingredients (APIs) are difficult to get in Bangladesh.
c) Technological expertise Deficit: Due to a lack of easily accessible technology and expertise, it could be necessary to import some complicated Active Pharmaceutical Ingredients (APIs) production procedures from Bangladesh.
d) Quality control: Maintaining consistent quality and conforming to international standards in the production of Active Pharmaceutical Ingredients (APIs) can be challenging in the absence of advanced infrastructure and procedures.
Intellectual property rights: Complex regulations pertaining to specific Active Pharmaceutical Ingredients (APIs) and restrictions on patents may limit the capabilities of domestic manufacture.
Market uncertainties: Due to possible changes in the market and competition, investing in the large-scale manufacture of Active Pharmaceutical Ingredients (APIs) poses risks.
Focus on finished goods: Bangladesh is able to focus its resources on developing and manufacturing pharmaceutical products by importing Active Pharmaceutical Ingredients (APIs) by taking advantage of its advantages in formulation and packaging.
Competitive environment: By utilizing foreign APIs, Bangladeshi companies might be able to offer full goods at competitive prices on the global market.
To counter this, the government has implemented measures to encourage the manufacture of locally produced APIs, such as tax holidays and VAT exemptions. Among the Guidelines Are:
Benefits of the 2018 Production and Export Policy for API and Laboratory Reagents
From 2017 to 2022, all domestic and joint venture manufacturers of laboratory reagents and APIs will benefit from a five-year, unconditional tax exemption. A manufacturing manufacturer: every year between 2022 and December 31, 2032, a minimum of three molecules will be eligible for a 75% tax holiday, and a minimum of five molecules will be eligible for a 100% tax holiday.
Until 2032, purchases and sales of locally generated APIs, lab reagents, raw materials, and real estate will not be subject to sales tax or VAT deduction at source.
a 20% cash payout if producers provide 20% or more of the total value. After 2026, the requirements for value addition must be reviewed.
The length of period loans for factories and equipment has been extended from 6 years to 12 years.
40% of export earnings are retained by raw material manufacturers.
The single borrower cap will not apply to reagent and API producers.
API manufacturers are eligible for facilities for successive letters of credit.
First dibs will be given to reagent and API producers for land in API parks and economic zones.
API manufacturers are compensated in foreign currency. An article published by LightCastle Partners states that the grace period for unpaid raw material imports has been extended from 180 days to 360 days.If payments are not received on time, the timeframe for paying for imported machinery may be extended to three years. Payment for imported machinery must be made within 360 days.
To boost domestic manufacturing, a number of initiatives are being implemented. Lowering import costs and boosting competitiveness are the goals of building API parks; the Munshiganj park alone is expected to employ 25,000 workers. These initiatives generally aim to reduce Bangladesh's reliance on imports, boost home manufacture, and improve Bangladesh's standing in the global pharmaceutical market.
According to IDLC Finance, the company has evolved from being reliant on imports to exporting nearly 2,000 different product types to 151 other countries. Exports reached USD 169 million at a cumulative annual growth rate (CAGR) of almost 16.00%, with the US, the Philippines, Kenya, Myanmar, and Afghanistan being the top destinations. Major contributors to this growth included Remdesivir, Favipiravir, and other anti-coronavirus drugs, for which the government offered a 10.00% financial incentive. Antibiotics and oncology combined make for 50.00% of export earnings. Notably, the less regulated areas are desirable export destinations due to Bangladesh's cost advantages and experience with generic drugs. According to BIDA, the cost of production is currently 10.00–15.00% lower than that of China and India, and the difference is expected to grow.
Among the top export categories are:
1. Branded Generic Medicines: With an approximate share of 80% in the export market, these are the market leaders. Antibiotics, kidney dialysis, cancer, leprosy, malaria, and tuberculosis drugs are common in this group.
2. Antiretrovirals: Used to treat HIV/AIDS, this class of medication has grown significantly as a result of Bangladesh's participation in international health programs.
3. API Exports: Although they are still in their infancy, the export of active pharmaceutical ingredients (APIs) has enormous development potential in the future. Antibiotics, anti-inflammatories, and antidiabetics are the main products of initial export initiatives.
Pharmaceutical companies in Bangladesh make money in a number of ways, including as exporting goods abroad, contract manufacturing for corporations abroad, selling finished pharmaceutical products, and providing R&D services. The following international companies employ contract manufacturing in Bangladesh:
GSK: GSK and Beximco Pharmaceuticals have partnered to manufacture metered dose inhalers under contract.
Abbott Laboratories: Incepta Pharmaceuticals and Abbott Laboratories collaborated to produce generic medications.
Sanofi: Contracted to manufacture a number of medications under contract with Renata Pharmaceuticals.
Merck: Worked with ACI Limited to outsource the production of pharmaceuticals.
The DGDA-approved focus on quality control ensures that pharmaceuticals are made to meet stringent specifications before being supplied to hospitals, community pharmacies, and international markets.
Instead of actively engaging in ATL marketing, pharmaceutical companies in Bangladesh often focus on pharmacists and medical experts, who are typically the patient's trusted point of sale. The prescription share is the most important metric for pharmaceutical companies. There is competition among several local pharmaceutical companies for market share. Consumers are very competitive and price-sensitive as a result of budget concerns.
The allopathy industry in Bangladesh is home to numerous enterprises, although depending on the criteria applied, identifying which ones are the "big players" can be quite subjective. This is according to a report published by the Bangladeshi embassy. Nonetheless, the following are a few of the top pharmaceutical companies according to several factors:
Square (19 percent)
Incepta (9.5 percent)
Beximco (9 percent)
Opsonin (5 percent)
Renata (4.9 percent)
Eskayef (4.7 percent)
ACI (4.3 percent)
ACME (4.1 percent)
Aristopharma (4 percent)
Drug International (3.7 percent)
Future trends that are projected include a greater emphasis on the use of technology, a focus on novel and specialized treatments, expansion into new export markets, and a commitment to the sustainability of the sector.
Despite several challenges, the pharmaceutical export industry in Bangladesh is expected to grow at a compound annual growth rate (CAGR) of over 24% by the end of 2030, reaching USD 1.5 billion, according to IDLC Finance. The pharmaceutical sector in the nation has undergone a significant upheaval.Bangladesh's pharmaceutical sector is well-positioned for future expansion, with a focus on innovation, technology, and sustainability. Removing barriers and leveraging strategic initiatives will be essential to sustaining development and competitiveness in the global arena as the sector develops.
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