Pharma marks excellence in BD's export diversification
Faced with enormous economic challenges local pharmaceuticals industry over the last four decades has become a self sector from its once import dependency and marks excellence in diversifying Bangladesh's exports. If nourished and get adequate support from the government the sector could be a major export earning sector in parallel with the readymade apparel industries.
The sector's export in the last fiscal year rose to USD 100 million which were only USD 69 million in the financial year 2013-14. The growth could be accelerated if necessary policy supports are taken by the government. The sector has a huge export potential and it could be one of the largest foreign exchange earning industries as it adds high value and is being supported with the World Trade Organization (WTO)'s TRIPs (Trade Related aspects of Intellectual Property rights) transitional period agreement.
Currently above 98 per cent domestic demand for medicines are met by local companies and besides that local drugs are being Bangladesh exported to over 144 countries including highly regulated market like US, UK, EU, Australia and in many other countries with achieving those countries' standards recognitions.
Among the least developed countries Bangladesh is the only state that has flourished pharmaceuticals manufacturing based lines with its own pharmacists, chemists, microbiologists and many professionals with cheaper wages. Local drug administration estimates that over 1400 generic drugs in more than 22,000 brand names are currently being manufactured in the country and there is continuous trend of manufacturing new modern drugs of which 80 per cent is generic and the rest 20 per cent is patented.
As per global demand a several Bangladeshi companies have also invested in manufacturing bio similar drugs like vaccines, insulin, hormones and others biotech based drugs for treating cancer and several deadly diseases. Currently our companies are capable to produce Inhalers, Pre-filled syringe injections, Lyophilized Injections, Dry Powder Inhaler, Sustain Release formulations and many others in IV and oral doses forms.
As developing and the developed countries need to pay royalty against manufacturing patented drugs and the least developed countries like Bangladesh is exempted from paying such royalty in production and marketing so it is a big scope for Bangladesh for reverse engineering of both the patented and patent expired pharmaceuticals at least till 2027 and it can extend its tenure by applying to the WTO.
As Bangladesh is now in a transitional period of becoming a developing country from its existing least developed country status, the previous extended time for manufacturing and marketing royalty free products till 2032 will be invalid as per world trade law. And in this case if Bangladesh is graduated to a developing nation, it will enjoy its TRIPs transition period till 2027.
But after 2027 withdrawal of the WTO provided facilities will not affect the country's flourishing trend as already a huge investment and infrastructure have taken place in the country's pharmaceuticals sector and it has achieved world's high regulated market's entry recognition.
Several local pharmaceuticals companies have achieved US Food and Drug Administration's (USFDA) standards recognition, UK Medicines and Healthcare Products Regulatory Agency (UK MHRA), Therapeutic Goods Administration (TGA) of Australian ANVISA, Brazil, Health Canada, TFDA, GCC and many others and the numbers of companies in getting such standards recognitions would cross 20 soon due to their state of the art production facilities.
Bangladesh can continue to produce patented products till 2033 as per TRIPS because the WTO has granted the LDCs relaxation on the same till 2033. Currently out of 257 licensed pharmaceutical manufacturers, 150 are functional which has captured over 90 per cent of the market share and the rest by the foreign companies operating in Bangladesh and around 30 manufacturers are involved in exporting pharmaceuticals. The industry can surpass readymade garments export as it is of high value additions and it employs white-collar jobs which are also a good job market for local pharmacists, chemists and microbiologists and other technicians.
Currently local RMG can add a small amount of value as most of the fabrics and packaging materials are imported whereas a drug manufacture can add high value to its exportable products. Reverse engineering or formulation is legally permitted by Bangladesh as an LDC. Though Bangladesh still have to import some medicines which are not more than 3 per cent of her total demand, but in the near future, the local pharmaceutical companies will be ready to full fill 100 per cent of local demand of medicines as well as to start exporting to reduce trade deficit.
Although highly successful in developing the domestic market, the pharmaceuticals sector of Bangladesh is beset with several long standing challenges which need to be addressed to realize its actual export potentially. It is unfortunate that the industry has in fact gained nothing out of this TRIPS flexibility since Doha declaration in 2003.
Possible huge exports of this sector has been discussed much in many round tables and in meetings but the problems which were identified by stakeholders and experts are still there in the country. Several obstacles are impeding the growth for export and it is yet to be solved. To continue the growth it needs to source its active pharmaceuticals ingredients (API) raw materials locally and in this regard construction for an API Park is going on in Munshigonj. But it is in a sorry state that the vital API park project is yet to be commissioned for manufacturing pharma raw materials with cheaper costs and low lead time.
Currently local drug manufacturers are importing major per cent of the raw materials and as Bangladesh is an LDC member state so it can procure from developing and developed countries now. But once it becomes a developing state it will face difficulties in procuring raw materials so it is imperative to manufacture raw materials locally.
Currently more than 90 per cent of the APIs (raw materials for medicines) are imported and only less than 10 per cent produced locally by some leading pharmaceutical industries. A large amount of investment is needed to invest for manufacturing active pharma ingredients and the API Park is likely to produce new- generation active ingredients as per compliance with regulated market and by using latest technology.
Bangladesh Association of Pharmaceuticals Industry is likely to finance in installing its central effluent treatment plant (CETP) to provide cost effective services to all the factories in the park as it is of high costs for individual set up for ETP. The drug administration can also play a good role in encouraging new investments in this sector, in particular to cop up with the modern world, Bangladesh can also invest a lot in bio-similar products as the world is shifting from chemical based products to biotechnology based pharma products.
It is a matter of hope that a few local companies have already taken initiatives for producing biotech based bio similar medicines which means it is also a formulation or reverse engineering for biotech based drugs which have already been invented and are being used for treating diseases in the developed and developing countries like the existing chemical-based drugs.
The writer is a former president of American Chamber of Commerce in Bangladesh (AmCham BD) and Foreign Investors' Chambers of Commerce and Industry (FICCI)