Table of Contents

1.

Introduction............................................................................................................... 1

2.

Origin of the study..................................................................................................... 2

3.

Objectives of the study.............................................................................................. 2

4.

Methodology.............................................................................................................. 2

5.

Limitation................................................................................................................... 3

6.

Pharmaceutical Sector in Bangladesh........................................................................3

7.

Industry Performance:............................................................................................... 4

8.

Highlights of Global Pharmaceutical Market:.............................................................4

9.

Market Competition:.................................................................................................. 5

10.

Demand and Supply............................................................................................... 6

11.

Industry Advantages:.............................................................................................. 6

12.

Industry Disadvantages:......................................................................................... 6

13.

Regulatory Assistance............................................................................................ 7

14.

Government Policy towards the industry:...............................................................7

15.

Salient features of Drug Act 1982:..........................................................................7

16.

Conclusion.............................................................................................................. 9

17.

References............................................................................................................ 10

1. Introduction
The pharmaceutical industry in Bangladesh is pretty small compared to the
population size of the country, mainly because of the lack of spending power of
the population. Pharmaceutical spending is also amongst the lowest in the world
in per capita terms. Healthcare expenditures consist of only 3.35% of GDP.
However, increased awareness of healthcare, increase in per capita income,
emergence of private healthcare services and the governments increased
expenditure in this sector, together with other factors, have caused the demand
to rise in recent years. The sector is also protected from external competition as
imports are completely restricted for similar drugs that are manufactured locally.

2. Origin of the study

This

report

has

been

prepared

as

requirement

of

Entrepreneurship

Development course under the Department of Banking and Insurance of MBA

(Evening) program. The report was based upon the legislation and facilities
under which specific industries are operating. The supervisor Md. Ruhul Amin,
Faculty of Business Studies, . Honorable institute supervisor duly approved the
topic- Bangladesh

Ready

Made

Pharmaceutical

industry which

was

decided for doing the report. The report will definitely increase the knowledge of
other students to know the pharmaceutical industry of Bangladesh.

3. Objectives of the study

The general objective of preparing this report is to fulfill the requirement of
completion the MBA (Evening) Program through gaining the practical job
experience and view the application of theoretical knowledge in the real life. The
report focuses on two parts. They are:
Primary Objective
The broad objective is to analyze the pharmaceuticals sector of Bangladesh in
terms of prevailing industry regulation and assistance and ultimately relate the
knowledge with the practical experience.
Secondary Objective
In order to reach the broad objective, some specific objectives are identified.
1. To know the different facilities enjoyed by this industry
2. To know the regulations under which the industry is oerating
3. To identify the opportunity for a new entrepreneur to enter into this industry

4. Methodology
Sources of data
Data regarding the completion of this report are collected from both primary and
secondary sources.
Primary source:
No procedure are performed to gather primary data regarding this report. All the
data are collected from secondary source.
Secondary sources:
i.
Various data source like Bangladesh Director of Drugs, Export
Promotion Bureau
ii.
Internet Browsing
iii.
Annual report of the company
iv.
Different published material such as books and articles.

5. Limitation
1. In many cases, up to date information was not published.
2. In some cases, access to relevant papers and documents were strictly
prohibited.

6. Pharmaceutical Sector in Bangladesh

Pharmaceutical sector is technologically the most developed manufacturing
industries in Bangladesh and the third largest industry in terms of contribution to
governments revenue. The industry contributes about 1% of the total GDP. There
are about 250 licensed pharmaceutical manufacturers in the country; however,
currently a little over 100 companies are in operation. It is highly concentrated as
top 20 companies produce 85% of the revenue. Bangladesh pharmaceutical
companies focus primarily on branded generic final formulations, mostly using
imported APIs (Active Pharmaceuticals Ingredient). About 85% of the drugs sold
in Bangladesh are generics and 15% are patented drugs - the structure differs
significantly from the international market. Branded generic drugs represent
about 25% on average of worldwide pharmaceuticals sales; however, given the
popularity in emerging markets like China, India and Latin America, branded
generic drugs may well dominate the total sales within a decade.
Bangladesh manufactures about 450 generic drugs for 5,300 registered brands
which have 8,300 different forms of dosages and strengths.

Domestic

manufacturers account for 97% of the drug sales in the local market while the
remaining 3% are imported. This is a complete turnaround over from two/three
decades back when imports used to dominate the market. The imported drugs
include essential live saving drugs and other high quality drugs. The ratio will
further increase in favor of the local production as some of the big players are
poised to manufacture these high quality drugs in-house in the future.
2

7. Industry Performance:

Pharmaceutical sector of Bangladesh is technologically the most developed

manufacturing industry in Bangladesh and the third largest industry in terms of
contribution to governments revenue. The industry contributes about 1% of the

total GDP.
Pharmaceutical sector of Bangladesh can meet 97 percent of the total medicine
requirement of the local market. Pharmaceutical exports of Bangladesh rose
around 15 percent in FY 2013-14 from FY 2012-13. Export data over the last five
years is given below:
Fiscal Year

Export in USD million

2013-14

69.23

2012-13

59.82

2011-12

48.25

2010-11

44.27

2009-10

40.97

Source: The Daily Star

Total size of the pharmaceutical industry of Bangladesh was around BDT 120
billion in the year 2013. Estimated size of pharmaceutical industry of several
years is given below:
Fiscal Year

Market size in BDT billion

2014

140.32

2016

185.57

2018

245.24

2020

324.56

2022

429.23

Source: The Daily Star

Both foreign and local investment in this sector was worth over USD 1 billion in
the year 2013.

8. Highlights of Global Pharmaceutical Market:

The global pharmaceutical market will reach nearly USD 1200 million by 2016.
The revenues from generics in 2016 are expected to reach USD 400430 billion,
approximately 70% of which will be outside developed markets.

Global generic spending is expected to increase from USD 242 billion to USD
400430 billion by 2016, of which USD 224244 billion of the increase is from

low-cost generics in emerging markets.

Global brand spending is forecast to increase from USD 596 billion in 2011 to

USD 615645 billion in 2016.

In addition, the highest growth in this market is observed in Asia-Pacific.
Leading emerging countries will account for 28% of global spending on

pharmaceuticals by 2015, compared to 12% in 2005.

Over the next five years growth rate for emerging markets - 15 % to 20%, for

matured markets 6% to 10%

Blockbuster drugs ($150 billion) to lose patents between 2010 and 2017.
Cardiovascular and CNS are the two largest market segments, constituting nearly

38% of the global generic pharmaceutical market together.

However, therapeutic segments such as Respiratory, CNS and Oncology are likely
to witness significantly high growth rates, attracting the attention of market

participants.
On the contrary, segments such as Diabetes and Genitourinary/ hormonal drugs
are expected to decline by the 2017.

9. Market Competition:

There are 268 licensed pharmaceutical manufacturers in Bangladesh. Among

them 197 are functional. List of top pharmaceutical companies of Bangladesh
with their market share is given below:
Name of Company

Market Share (%)

Square Pharmaceuticals

18.63

Incepta Pharmaceuticals

9.68

Beximco Pharmaceuticals

8.83

Opsonin Pharma

5.38

Renata Pharmaceuticals

4.94

Eskayef

4.64

Aristopharma

4.18

ACI

4.17

Acme

3.98

Drug International

3.78

Source: IMS Health Bangladesh Limited, December 2012 report

Bangladesh Association of Pharmaceutical Industries (BAPI), Directorate General

of Drug Administration (DGDA), Pharmacy Council of Bangladesh (PCB),
4

Bangladesh Pharmaceutical Society (BPS) are some of the institutions related to

pharmaceutical sector

10.

Demand and Supply

Global pharmaceutical market size is estimated to be around USD 1.6 trillion by

2020 and generic drug market size expected to be USD 200 billion.
Bangladesh exports pharmaceutical products to more than 88 countries around
the world. Name of some major countries are Myanmar, Vietnam, The
Philippines, Kenya, UK, Afghanistan, Bhutan, Cambodia, Fiji, Hong Kong, Iraq,
Macau, Malaysia, Maldives, Nepal, Papua New Guinea, Sri Lanka, Tajikistan,
Uzbekistan, Vietnam, Eritrea, Gambia, Ghana, Ivory Coast, Kenya, Libya, Malawi,
Mauritania, Mauritius, Mozambique, Niger, Nigeria, Sierra Leone, Somalia,

Tanzania, Uganda, Belize, Costa Rica, Suriname etc.

Bangladesh exports significant amount of pharmaceutical products in FY 2013-14
to the following countries:
Country

Export

Volume Percentage

of

(USD million)

Pharmaceutical Export

Myanmar

11.68

16.87 %

Sri Lanka

6.84

9.87 %

Philippines

5.73

8.27 %

Vietnam

4.77

6.89 %

Kenya

4.00

5.78 %

Total

Source: Export Promotion Bureau

11.

Industry Advantages:

Pharmaceutical industry of Bangladesh has created more than 0.10 million jobs.
Besides the sector provides high quality products which has already gained

global acceptance.
As a member of TRIPS agreement in Bangladesh, any pharmaceutical company
can manufacture the patent product exclusively at any price for the patented

period which is 12 to 20 years.

The sector is almost self-sufficient as it can meet the most local demand of
medicines.

12.

Industry Disadvantages:

Main drawback of this sector is that the local pharmaceutical industry is not
backward-integrated. Bangladesh has to import 90 percent of total requirement
5

of main ingredient of Pharmaceutical products API. Total import value of API in a

year is over BDT 2,500 crore. Active Fine Chemicals Ltd. plans to cover at least

10% of API market by FY 2014-15.

Pharmaceutical industry is a capital intensive industry requiring huge fixed costs
in machinery and extensive R&D expenditure which makes it hard for the
companies to enter into the market.

13.

Regulatory Assistance

The government has given support to the manufacturing industry for decades. It
adopted The Drug Act 1940 in 1974, originally adopted by the Indian government
in 1940, and later by the Pakistani Government in 1957. The Drug Act gave
protection to the local manufacturers by restricting import of pharmaceutical
products that are manufactured in the country. It successfully prevented the
Indian manufacturers, who could serve the market at competitive price, from
entering the country. Going forward there is no regulatory risk that import
restriction will be removed and local companies are likely to continue on

dominating the pharmaceutical market.

The government has planned to set up the API park by 2012 to facilitate API
production and lower reliance on API import. In the last budget also, government
provided various incentives to lower the import cost of the pharmaceutical
manufacturers. In this coming budget for FY 2013, it is expected that the
government is going to provide incentive to export - in particular easing up the
documentation procedures and removing bottleneck for exporting goods.

14.

Government Policy towards the industry:

Government has reduced customs duties on 40 basic raw materials used in the

manufacture of medicines to 5 percent from 10-25 percent.

Customs duties on 14 items used in anti-cancer medicines have been withdrawn

in the Budget of FY 2014-15.

Government also gives tax holiday facilities for new pharmaceutical companies

established within the period of June 2019.

Government has already taken an initiative to establish an API park to lower the
dependence on import.

15.

The Drug Act 1982:

The drug Act 1982 is the parliamentary approved rule for regulating the
pharmaceutical industry in Bangladesh. Salient features of this act are given below:

Drug Control Committee

6

(1) The Government shall constitute a Drug Control Committee consisting of a

Chairman and such other members as it may appoint from time to time.
(2) The Committee shall perform such functions as are specified in this
Ordinance.

Registration of Medicines
(1) No medicine of any kind shall be manufactured for sale or be imported,
distributed or sold unless it is registered with the licencing authority.
(2) The licensing authority shall not register a medicine unless such
registration is recommended by the Committee.
(3) A registration shall be granted on such conditions as may be specified by

the licensing
authority.
(4) A registration shall, unless cancelled earlier, be valid for a period of five
years.
Cancellation or suspension of registration
(1) The licensing authority may cancel the registration of any medicine if the
Committee recommends such cancellation.
(2) The Committee shall evaluate every medicine registered before the
commencement of

this Ordinance

and

every medicine that may be

manufactured or imported after such commencement in order to determine its

safety, efficacy and usefulness.
(3) If on such evaluation the Committee finds that any such medicine is not
sale, efficacious or useful it may recommend to the licensing authority
cancellation of registration of the medicine.
(4) The licencing authority may, if it is satisfied that a medicine is substandard,
suspend the
registration of such medicine till he is satisfied that the medicine has attained

its standard.
Fees for registration. No registration of a medicine shall be granted
unless a fee to be determined by the Government is paid at the time of

application for registration.

Restriction on import of certain pharmaceutical raw material.
(1) No pharmaceutical raw material necessary for the manufacture of any
medicine specified in any of the Schedules shall be imported.
(2) No drug or pharmaceutical raw material shall be imported except with the
prior approval of the licensing authority.
(3) The licensing authority may award an approval under sub-section (2) on

such conditions as it deems fit to specify.

Restriction on manufacture of certain drugs under license. No drug
shall, alter six months from the date of commencement of this Ordinance, be
manufactured in Bangladesh under license granted by a foreign company
having no manufacturing plant in Bangladesh if, such drug or its substitute is
produced in Bangladesh.
7

Fixation of price of drugs.

(1) The Government may, by notification in the official
Gazette, fix the maximum price at which any medicine may be sold.
(2) The Government may by notification in the official Gazette, fix the
maximum price at
which any pharmaceutical raw material may be imported or sold.

Review of certain licensing agreement with foreign concerns.

(1) The Government may review any licensing agreement between a
Bangladeshi concern and a foreign concern for manufacture of any drug in
Bangladesh in order to find out if it contains any provision against the national
interest.
(2) If on such review the Government finds that any such provision of any such
agreement is against (he national interest, it may direct the concerns to
modify such provision.
(3) If any such concern fails to comply with the direction given under

subsection
Employment of pharmacists.
(1) No person shall manufacture any drug except under the personal
supervision of a pharmacist registered in Register 'A' of the Pharmacy Council
of Bangladesh:
Provided that this provision shall not apply to the manufacture of any drug
under the ayurvedic, unani, or homeopathic or biochemic system of medicine.
(2) No person, being a retailer, shall sell any drug without the personal
supervision of a pharmacis registered in any Register of the Pharmacy Council
of Bangladesh:
Provided that this provision shall not apply to the retail sale of any drug under

the ayurvedic, unani, or homeopathic or biochemic system of medicine.

Control of advertisement and claims in respect of drugs. No person
shall publish or take any part in die publication of any advertisement which
relates to the use of any drug or contains any claim in respect of therapies or
treatment without the prior approval of the licensing authority. explanation.
"Advertisement" includes any notice, circular or other document displayed on
or in any public place or public transport or published in any newspaper or
periodical and any announcement made orally or by any means of producing

or transmitting light or sound and any trade circular, insert and level.
Good practices in the manufacturer and quality control of drugs.
(1) Every manufacturer of drugs shall follow the good practices in the
manufacture and quality control of drugs recommended by the World Health
Organization.
(2) If any manufacturer does not follow such good practices his manufactured
license may be cancelled or suspended.
8

16.

Conclusion

The pharmaceutical sector has already been declared as the thrust sector by the
government of Bangladesh. Bangladesh has built a strong baseline and going
towards the self-sufficiency for the production of medicine. Meanwhile, some
companies have started to produce vaccine, insulin, anticancer drugs, etc. Our
pharmaceutical industries are successful in domestic market. Now, its the time
to grow our international market because we passing golden time getting the
opportunity of patent exemption by the TRIPS until 2016. Besides the above
discussing points, providing cash incentive by the govt. to the medicine
exporters, like PHARMACEUTICAL may encourage pharmaceutical exporters.
International fair arrangement by Export Promotion Bureau (EPB) is a very
effective way to search buyers and to establish business in a new country. A lot
of initiative have been taken by BAPI in different times, such as, high level
pharmaceuticals delegation team visited foreign countries to explore export
initiated by BAPI. This organization also upheld the demand and urged to the
government and other concerning authorities for API Park, Bioequivalence test
laboratory, Central drug testing laboratory, cash incentives, problems in remit
transfer and sample sending etc. But many issues are yet to resolve. We have
already wasted our valuable time and still losing to build our infrastructure for
export. We should complete our infrastructure as soon as possible because TRIPs
patent protection may be adopted to us after 2016. The government should
really be attentive to remove all the obstacles and solve all the problems to see
pharmaceutical sector as a vital player in international market.

17.

References

1.

Bangladesh, Volume VI, Number I, January-June, 2011

2. Drug Ordinance of Bangladesh, 1982
3. Pharmaceutical Opportunities in Bangladesh, UK Trade and Investment
4. Chapter 14, The Pharmaceutical Sector in Bangladesh, World Bank Report,

2013
5. www.dgda.gov.bd
6. Improving The Competitiveness of The Pharmaceutical Sector in Bangladesh,

World Bank April 2007

7. Moklesur Rahman Sarker, Pharmacy Profession in Bangladesh, Future

Prospects and Challenges.

8. IMS Data, 2013
9. banglapedia.net

Anamul

and

Zahedul,

Business

Analysis

of

Pharmaceutical

Firms

in

10. Public And Private Sector Approaches To Improving Pharmaceutical Quality In

Bangladesh,

Bangladesh

Development

Series,

Paper

No.

23,

Development Unit, South Asia Region, The World Bank, March 2008
Export Promotion Bureau
Website of Active Fine Chemicals Ltd.
IMS Health Bangladesh Limited, December2012 report
BRAC EPL report: An overview of the Pharmaceutical Sector in Bangladesh

10

Human