Академический Документы
Профессиональный Документы
Культура Документы
One of the most developed and technology based sector of Bangladesh in Pharmaceuticals.
It is the industry that evolved from an import dependent to independent and now also an
export oriented sector. This sector has grown stronger over the last 40 years. It is not an
easy achievement from a LDC (Least Developed Countries) courtiers like Bangladesh who
faced enormous economic challenges. Today Bangladesh is the only LDC that has a well
developed Pharma sector.1
The Pharmaceutical market of Bangladesh currently serving the 98% of local demand
through local production. The total markets size is more than $1.6 billion. Pharmaceutical
industry of Bangladesh is not only the largest employer of white collar jobs in the country
but also slowly becoming a globally renowned player in the international market.
Bangladesh has crossed the BDT 6 billion mark in terms of foreign exchange earnings from
drug exports in the Fiscal year 2015-16.2 Increased education levels, enhanced awareness of
healthcare, growing per capital incomes, the emergence of private healthcare services and
the governments expanding public expenditures helps this sector continue to rise day by
day.
There are currently 257 registered pharmaceutical companies in Bangladesh. The Drug
Policy of 1982 has helped the industry grow by 65 times from BDT 1730 million to BDT
113 billion.3 According to IMS Health, annual pharmaceutical sales in the local market may
reach BDT 160 billion within 2018.
Currently Bangladesh is home for affordable and high-quality generic medicines and more
than 85 countries across the world export from Bangladesh. More than ten leading
Bangladeshi pharmaceutical companies are exporting generics to international
markets. Some of them are Square, Incepta, ACI, ACME, Opsonin & Beximco Pharma.
Pharmaceutical export is contributing to the GDP of Bangladesh and every year this
contribution is positively growing. In the meantime, Pharma sector has become the 2 nd
largest potential sector in Bangladesh to earn foreign currency.
1
Bangladesh Association of Pharmaceutical Industries
2
Pharmaceutical Exports from Bangladesh Rise Sharply,
http://bdnews24.com/business/2016/01/24/ pharmaceutical-exports-from-bangladesh-rise-sharply
3
IMS report of 2014
1
Methodology:
We mainly choose qualitative approach to complete our report. Information used to prepare
this report has been collected from secondary sources which helped to gather
comprehensive information.
Sources of Information
In order to make the assignment more meaningful we took help from-
There are various reasons why a company wants to sale beyond boarder. The main reasons
include the following:
Increasing sales
Exporting is one way of increasing a countries sales potential. While the local market may
represent enough sales potential for smaller firms, for medium and larger companies the
local market is just too small and the only way to expand sales is to export.
The Pharmaceutical market of Bangladesh currently serving the 98% of local demand
through local production. The total markets size is more than $1.6 billion. This mean,
leading pharmaceutical companies are ready to produce more for global market.
Increasing profits
No company will enter the export market in order to make loss. Companies generally strive
to make profits and the bigger the profits the better. In many case, exports can contribute to
1
http://www.economywatch.com/world_economy/bangladesh/export-import.html
2
increased profits because the average orders from international customers are often larger
than they are from domestic buyers.
Leading pharmaceuticals companies like Square, Incepta, ACI, ACME, Opsonin &
Beximco Pharma can increase their profit through exporting.
Industry Analysis:
Bangladesh is a country of emerging economy. The reason of the countrys rising economy
is high growth rate of industrialization and investment in different sectors. One of them is
healthcare sector. Pharmaceuticals industries are the heart of this sector. The
Pharmaceuticals industries have grown and developed surprisingly in the last two decades.
Pharmaceutical companies fulfill more than 98% of local demand of medicines and about
30 companies export a significant quantity of medicines to 85 countries, including
Germany, USA, France, Italy, UK, Canada, Netherlands and Denmark. International
regulatory authorities like UK-MHRA, Australia-TGA, EU have already certified some
pharmaceutical companies and soon some others are going to be certified and approved by
US-FDA. In case of earning foreign currency, pharmaceutical sector has become the 2nd
largest potential sector of Bangladesh and this sectors contribution to the GDP is growing
rapidly.
History:
Like the garments industry, the country's pharmaceutical sector has been one of the success
stories of Bangladesh in the last three decades. The pharmaceuticals industry dates back to
the 1950s. Over the years, the industry has gone through major changes. After Bangladesh's
liberation in 1971, the industry was largely dominated by multi-national companies and the
country was import-dependent. The defining moment came in 1982 when the government
formulated the National Drug Policy (NDP) and the Drug Control Ordinance. After the
3
annunciation of Drug Control Ordinance - 1982, the sector started to expand vertically. As
the local Pharmaceutical companies were the beneficiary of NDP, they started to expand
their business. Meanwhile, the MNCs sold their business shares to local companies.
According to the Directorate General of Drug Administration (DGDA), the market share of
the locally produced drug was 175 crore in 1981 that increased to 325 crore by 1985. 1
Whereas in the early 1980s, locally manufactured drug sales amounted to only BDT 100
crore, in 2014, they amounted to BDT 11,000 crore. Within two to three decades, the sector
has made a complete turnaround from an import-dependent industry to almost self-
sufficiency. 2 Domestic manufactures account for 98% of the drug sales in the local market,
catering to a population of 160 million, while the remaining 3% is imported.
Industry Classification:
Although 257 pharmaceutical companies are registered in Bangladesh, only about 80 are
actively producing drugs. The total industry can broadly be classified into two categories.
These ares-
Patent Medicines
Generic Medicines
Patent medicines are the products that are invented by the company, who have their own
research team working on their own laboratories. These products are patented for many
years to enjoy the monopoly market. After years of business the formulation is sold in the
market so that others can go into mass production. Generic medicines are the products that
are produced in mass scale. These are marketed by several companies under different brand
name, where the formulation of this product is almost same. Prices of the products are under
this category are competitive. Bangladesh mainly concentrates on this category, as labor
cost is one of the lowest in the world.
1
Bangladesh Association of Pharmaceutical Industries (BAPI)
2
Bangladesh Association of Pharmaceutical Industries (BAPI)
4
The drivers behind market growth based on some health indicators are:
A gradual demographic shift, including increased life expectancy over the last two
decades, has translated into increased health consciousness and needs, encouraging
people to spend more on healthcare services.
The income base of the population has been growing over the last decade. Health
expenditure per capita doubled during that same period, indicating peoples
willingness to spend more on health as their disposable incomes increase.
The sector employs 1,15,000 workers and between 2013 and 2014, the growth stood around
11.37%. According to IMS Health, annual pharmaceutical sales in the local market may
reach BDT 160 billion within 2018.
5
Domestic Competition:
The domestic market is highly concentrated and competitive. The local manufacturers
dominate the industry capturing market share of 90%. While the multinationals cater to the
remaining demand. According to IMS Health, the top 10 companies hold 68.5% market
share, the top 20 hold 85.73%, and the top 31 hold 94.1%, while the remaining 169
companies shared 5.9% among them.
Square Pharmaceuticals led the industry with a market share of 18.7%. Incepta and
Beximco took 2nd and 3rd positions with market shares of 11.78% and 9.46% respectively.
SQUARE and INCEPTA capture over 28% of the market. The industry structure is
relatively concentrated. In comparison, the top ten Japanese firms generated approximately
45% of the domestic industry revenue in 2006, while the top ten UK firms generated
approximately 53%, and the top ten German firms generated approximately 60%.1
1
IMS Health 2006 (IMS Health is an American company that provides information, services and technology
for the healthcare industry)
6
The Industry exports active pharmaceutical ingredients (APIs) and a wide range of
pharmaceutical products, covering all major therapeutic classes and dosage forms, to 85
countries. Along with regular forms like tablets, capsules and syrups, Bangladesh also
exports specialized products like HFA inhalers, CFC inhalers, suppositories, nasal
sprays, IV infusions, etc. These products have been well accepted by medical practitioners,
chemists, patients and the regulatory bodies of all of their importing nations. The packaging
and the presentation of the products of Bangladesh are comparable to any international
standard.1
According to the Export Promotion Bureau, pharmaceutical exports the growth in exports
has averaged over 10% from 2010 to 2014. In 2015, the export was over $60 million.
Pharmaceutical companies are trying to export to regulated, unregulated and moderately
regulated markets.
However, these sales are tiny compared to the vast world market, estimated to be worth
more than USD 520 billion in 2014.
The current export earnings from pharmaceutical exports is $82.11 million USD (crossing
the mark of BDT 6 Billion) a sharp rise of 13% from the previous years export earnings.
1
https://en.wikipedia.org/wiki/Pharmaceutical_industry_in_Bangladesh
7
Export Scenario of Pharmaceutical sector of Bangladesh, FY 2015-16
Bangladeshs export earnings from pharmaceuticals have witnessed a 13.04% jump to
US$82.11 million in the just-concluded fiscal year 2016. A good number of pharmaceutical
manufacturers have received certification from the respective countries and global
organization to export medicine, which helped this rise in export.
According to Bangladesh Aushad Shilpa Samity, over the last two years, around 1,200
pharmaceutical products got registration for export earnings that will see a massive jump
within the next three years.
Export Promotion Bureau (EPB) data shows that in the fiscal year 2015-16, Bangladesh
earned $82.11 billion, a 13.04% up, compared to $72.64 million a year ago. The sector has
exceeded export target by 2.64%. The government has set a target to earn $80 million from
the last fiscal year.
According to the EPB, in the last fiscal year, Bangladesh exported pharmaceutical products
to more than 85 countries, of which Myanmar imports the highest quantity of medicines
worth $13.60 million followed by Sri Lanka with $13.38 million, the Philippines with $6.10
million, Vietnam $5.32 million, Kenya $4.60 million, Afghanistan $4.18 million, and
Slovenia $3.38 million.
8
The main Export opportunities of Pharmaceutical Industry of Bangladesh are-
International Approval:
Beximco Pharma and Square Pharma both successfully completed FDA inspection of their
oral solid dosage manufacturing facilities and received notification in June 2015. They got
approval to export medicine in USA. After getting this approval, other developed countries
have also started to source as Bangladesh has received certification from those countries
and international organization to export.1
The global buyers of pharmaceutical products have started to import from Bangladesh for
price competitiveness and its superior quality. Nowhere in the world are medicines so
cheap as in Bangladesh. Our products are being accepted with confidence at home and
abroad because of the high quality," said Directorate General of Drug Administration
(DGDA) Director Selim Barami.
In Bangladesh medicines are very cheap. According to Bangladesh Association of
Pharmaceutical Industries, An injection that costs Tk 300,000 abroad will be available in
Bangladesh for Tk 60,000 only.
194 of 257 government-registered pharmaceutical companies regularly produce items like
cough syrup and flu tablets. Square, Incepta, Beximco, Acme, and Eskayef account for 45%
of Bangladesh's total production, manufacturing products for export in state-of the-art
factories. Medicines produced by them are very cheap and good in quality.
Increase in Investment:
1
Pharma export sees 13% jump in FY16, By Dhaka Tribune, 24 July, 2016
2
https://www.wto.org/english/news_e/news15_e/trip_06nov15_e.htm
9
Companies like the UK's GlaxoSmithKline, Switzerland's Novartis and France's Sanofi
have set up plants producing life-saving vaccines, anti-cancer drugs and other high-end
products in Bangladesh. 1
Industry growth has created employment opportunities including for pharmacists,
chemists, microbiologists and doctors that pay well enough to keep professionals from
going overseas. Bangladesh is trying to establish an industrial park for pharmaceutical
production.
"One such park in Munshiganj near Dhaka is nearing completion and we are hoping to see
a big jump in our income from pharmaceutical exports," Health Secretary A. M. M.
Neazuddin said.
USA Market:
Exporters and analysts say if the US market opens up to Bangladesh-made drugs, export
incomes would multiply several times. Beximco Pharmaceuticals Ltd, have taken all
necessary preparations to start exporting medicines in USA within 2017 will medicines for
blood pressure..
Square Pharmaceuticals Limited plans to hit the USA market in a few months and the
Incepta Pharmaceuticals Limited has already set up a separate factory with a view to
exporting medicines to the US from the next year.
API Park:
The government of Bangladesh is making a 200 acres Active Pharmaceutical Ingredients
(API) industrial park in Munshiganj district by the Dhaka-Chittagong highway. The park is
building under the public-private initiative with the Bangladesh Association of
Pharmaceutical Industries (BAPI). The government has so far spent Tk 189.46 crore on the
park.
1
Bangladesh Awami League Official Website, http://www.albd.org/
2 nd
Window of opportunity for the Pharma Industry, The Daily Star, 2 February, 2016
10
technology required for the purpose, setting up of an API park in the country was
considered highly essential by the concerned quarters.
The production of API will not only ensure self-sufficiency but will also offer price
competitiveness in the global market. At least half of the companies that will get plots in the
API Park will go into operation by 2018, which promises to propel Bangladesh to the next
stage as a drug exporter.
Being a least-developed country, Bangladesh has been exempted from the obligations to
implement patents and data protection for pharmaceutical products until January 2033 by
the World Trade Organisation.
Since we have the waiver, we will be able to make the patented drugs and their raw
materials and export them. We will also be able to make the raw materials of the new
medicines that are being developed, said SM Shafiuzzaman, secretary general of the
BAPI.1
The major raw material supplying countries such as India and China are not legally able to
produce the patented raw materials due to the WTO restriction. Although several local
firms currently manufacture the pharmaceutical raw materials, production is not enough to
meet the demand. The API Park will give Bangladesh Pharma Industry opportunity to
export the API as well as making raw materials in country. 2
1. UNICEF
2. KK Womens & Childrens Hospitals, Singapore
3. Raffles Hospital, Singapore
4. ADF France
5. CENABLAST, Chile
6. Save the Children
This list says that Bangladesh is capable of making good quality product in reasonable
price. Those clients are good advertising and branding for Bangladesh Pharmaceuticals
Industries exporting scenario.
Demand for Bangladeshs pharma products is growing in Asia, Africa and European
markets as manufacturers follow international standards that ensure better quality.
Affordability, quality and attractive packaging are the keys for drawing more buyers. But
still the growth of pharma export in Bangladesh is mainly deriving from exports to middle
1 th
Drugmakers to get a boost, By The Daily Star, 7 March, 2016
2
http://print.thefinancialexpress-bd.com/old/index.php?ref=MjBfMTBfMDVfMTNfMV82XzE4NTgzMQ==
11
income countries and to low income countries. Most exports are to markets where
pharmaceutical products are unregulated to medium regulated. Relatively lightly regulated
markets can be challenging to access as well with significant delays for obtaining approval.
The major challenges for exports are-
Competitors:
The Indian pharmaceutical industry is the largest supplier of cost effective generic
medicines to the developed world. With the widest range of medicines available for exports
and with the availability of the largest number of approved pharmaceutical manufacturing
facilities, India is all set to become the leader of pharmaceutical exports to the world.
12
Chapter 5: Conclusion & Recommendation
Conclusion:
The ability of the Bangladeshi drug industry to manufacture drugs for all kinds of needs is
beyond doubt. While some manufacturers are already able to produce world class quality
drugs, others would require considerable assistance to be able to reach that target.
Bangladesh is a natural candidate to supplement or substitute other international
manufacturers to the developing country markets of both finished drugs and APIs. In order
to maximize growth, the pharmaceutical players need to set their sight in the global market.
Recommendation:
Government can establish specialized Export Cell to promote exports of
pharmaceuticals to grab and capitalize the huge export opportunities in Least
Developed Countries (LDCs). Some private Consultancy firms having experience
and expertise in drug export professionally can be engaged to assist the
pharmaceutical companies who do not have the technical and expertise know-how to
go through the entire process of export, or have lacking in documentation skills or
even do not have the skilled man power to deal with the drug export. Thus,
Consultancy firms can play a significant role to explore export to maximum
countries, accelerate export activities, and to reduce the overall cost of export.
Continuous training and exchange programs with global regulatory bodies would
help Directorate General of Drug Administration (DGDA) equip with the skills and
knowledge to perform their duties more effectively.
For many APIs, The domestic market is too small to justify an API manufacturing
plant other than the reduction of cost. Although the companies have the technical
knowledge to produce APIs, there is not enough demand in the market. This means
that once the API Park is established, we would need to export the additional
products abroad. For this Export channels need to be set up without further delays.
13