Tapping the potential of pharmaceutical industry

Bangladesh's pharmaceutical industry is now on road to self-sufficiency in meeting local demand. The industry is a big contributor to the national exchequer, and it is the largest white-collar intensive employment sector of the country. Foreign exchange earnings from drug exports crossed Tk  7.0 billion mark in the FY2016-17.

There are five types of medicine manufacturing companies in Bangladesh (Chart I).

According to the DGDA, the total number of licensed essential drugs is 209 that include tablet, powder for oral liquid, powder for injection, eye drop, cream, lotion, soluble injection, chewable tablet, vaccine, ear drop, inhaler, suppository, capsule, oral vaccine etc. Bangladesh also produces and exports Active Pharmaceutical Ingredients (API).

Bangladesh manufactures almost all types of medicines and ful?lls the demand of 160 million people. The country produces around 97 per cent medicines domestically and imports the remaining 3.0 per cent. The industry manufactures about 5,600 brands of medicines in different dosage forms.

There are 257 registered companies in Bangladesh, 194 of which are in operation. However, the first 10 companies occupy 70 per cent market share and first 20 companies, 86.5 per cent market share.  The current market growth rate is 30 per cent with Square Pharmaceuticals being the market leader (18.8 per cent market share) followed by Incepta (10.2 per cent) and Beximco (8.5 per cent), Opsonin (5.6 per cent), Renata (5.1 per cent) and Eskayef (4.5 per cent). Multinational companies such as Radiant, Sanofi and Novo Nordisk have a 10.5 per cent market share and are focused on some specialised products.

At present, oncology drugs are imported but some of the local players like Renata and Acme have heavily invested in the segment. The local pharmaceutical market is very competitive. Square, Incepta and Beximco have already got US-FDA approval for drug exports.  (FDA is the drug regulating authority which controls all food and pharmaceutical substance use, import, export etc. in the USA).

The current foreign exchange  earnings from pharmaceutical exports is $89.17 million (crossing the mark of Tk 7.0 billion), registering a sharp rise of 8.6 per cent from the previous year's export earnings (Chart II).

According to the annual report of the Export Promotion Bureau (EPB) for fiscal year 2016-2017, developing and least-developed countries (LDCs) are currently the main export destinations. Among the 125 countries where Bangladeshi pharmaceuticals are exported, the highest amount was earned from Myanmar ($15.36 million) followed by Sri Lanka ($13.88 million). The industry is trying  to diversify its export destinations with the target of exploring 30 new destinations during the upcoming years (Chart  III).

The Directorate General of Drug Administration (DGDA), the national drug regulatory authority, is part of the Ministry of Health and Family Welfare and regulates drug manufacturing, importation and quality control of drugs in Bangladesh as well as sets prices.  The government has given support to the drug manufacturing industry for decades.  It adopted the Drug Act 1940 in 1974, and made National Drug Policy in 1982 which was amended in 2005 and 2016.  These gave protection to the local manufacturers by restricting imports of pharmaceutical products that are manufactured in the country.  It is likely that import restrictions will stay in place, and local companies will continue to dominate the pharmaceutical market.

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 people's willingness to spend more on health as their disposable incomes increase.

• The emergence of private healthcare service - a number of high-quality private hospitals began operating.  These hospitals have become popular due to their high-quality service.  They have been a major factor contributing to increased healthcare expenditure and have substituted for regional healthcare travel (although treatment in Malaysia and Singapore remains popular with some wealthy Bangladeshis who even travel to the United States for specialised services).

• Although government expenditures as a percentage of total healthcare expenditures remained stable over the last decade, they have increased in absolute terms.

There are ample opportunities in the country to make investment in the pharmaceutical industry. Most of the pharmaceutical companies still buy raw materials from abroad, which is a barrier to attain self-reliance and increasing the growth rate of export. Hence the government has undertaken a project to establish an Industrial Park to produce Active Pharmaceutical Ingredients (API) that will help the local manufacturers in reducing expenses, and increasing volume of production and sales.

The writer is Assistant Officer, Standard Bank Limited,

Karwan Bazar Branch.

[email protected]