A nascent market in healthcare sector

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Bangladesh has a medical equipment market worth of $163 million, similar in size to the market in Latvia or Serbia. But market size is where the similarity ends, as Bangladesh’s per capita health expenditure stands at only $27, whereas in Latvia or Serbia, it is $860 and $810 respectively.

This low per capital health expenditure has proven to be a major barrier in creating a medical equipment industry in the country, making the sector almost exclusively import-oriented, say experts.

According to a recent report of the Espicom Business Intelligence, an UK-based pharmaceutical and medical equipment research firm, the Bangladeshi medical equipment market is projected to expand at a compound annual growth rate (CAGR) of 8.4 per cent, which will advance it to a total value of $243.6 million by 2018.

The Espiocom report also said that Bangladeshi medical device imports have shown wild fluctuations in recent years, with growth in US dollar terms ranging from a high of 79.5 per cent in 2005 to a low of -10.6 per cent in 2007.

In 2013, imports increased by 25.4 per cent to reach $156 million. The recent annual import total reached a record high of $176.9 million in the 12 months to December 2014, representing a year-over-year increase of 14.4 per cent, said the Espiocom report.

In the absence of any significant medical equipment industry, export totals tend to be very small. In 2013, exports were valued at $3.7 million. Consequently, Bangladesh runs a negative balance of trade in medical devices—in excess of $150 million in 2013.

According to the data of the Export Promotion Bureau (EPB), the recent annual export total amounted to $ 5.6mn in the 12 months to December 2014, representing year-on-year growth of 51.6 per cent.

Very little domestic manufacturing takes place in Bangladesh and what does almost entirely comprises basic medical supplies. The Espiocom report said that a total of 104 people were employed in eight establishments involved in the manufacture of medical and dental instruments and supplies in Bangladesh in 2012. Gross output by the eight establishments totalled $2.6 million.

“The situation is changing slowly. We have been able to expand the domestic manufacturing market in the last few years,” said Sayed Rezaul Karim, managing director of National Electrocare Ltd, one of the few pioneers medical equipment manufacturers in the country.

Karim, an electrical engineer who founded the company in 2005, said he now had patents for eleven products including three types of Electro Ultrasound Therapy machines, Digital Muscle Stimulator machine, three types of Electro Surgical Units, two types of Waxbath machines, Photo Electric Colorimeter and Digital Lab Rotator.

“I was involved in the maintenance of large medical equipment for some of the renowned hospitals. I learned the details of some of the small and medium-size machines out of my own interest. Then I thought of manufacturing them myself,” said Engr Karim.

Karim says now he supplies his company’s machines to Popular, Labaid, Ibn Sina, Islami Bank Hospital and several other clients. He has also started exporting some of the machines to India.

“For producing large medical equipment like Electrocardiographs, Magnetic Resonance Imaging devices, Scintigraphic devices, Ultrasonic Scanners, X-ray machine and others, there is still no option but to go for imports as producing them involves large facilities with hi-tech knowledge”.

He says it is hard to establish in Bangladesh with a per capita health expenditure of $27 dollar. “But we can focus on manufacturing small and medium medical equipment,” said Karim.

Md Shah Alam, owner of BD-Ortho Care, another pioneer that manufacturers all sorts of Orthopedic Implants and Instruments, told The Independent that there was a huge potential of manufacturing small medical equipment in Bangladesh.

“After being involved in importing medical equipment for over 17 years, I started this manufacturing company only three years ago. I am now exporting products worth around $0.6 million,” said Alam.

Alam said that his company was producing 60 orthopedic products including bone-hook, drill machine, spine retractor, jime and many more. “The price of those products ranges from Tk 300–Tk 30,000. I am supplying these products to Apollo Hospital, Trauma Centre, National Institute of Traumatology and Orthopedic Surgery. I am also exporting these products to Pakistan and Thailand.”

Alam said the small and medium-size medical equipment market has been flooded with a large number of substandard medical instruments imported mainly from India, Pakistan and China, as the traders are capitalising on the absence of a market monitoring system.

“The products that we produce are a way better than the products that are being imported from those countries. But a syndicate of some traders hinder the growth of the domestic market,” said Alam.

Mahbubul Haque, managing director of Panacea Biomedical Services, said instead of importing substandard products from abroad, Bangladesh could easily go for manufacturing, especially the surgical equipment and small products for diagnostic centres.

Haque’s company, which imports products like test tubes, butterfly needles and injections from China said that they planned to manufacture these products in the near future. “This market is growing day by day. The country has the potential to meet the increasing demand through manufacturing. Otherwise, it will remain import-oriented,” said MD of Panacea.

Prof Mohammaed Kamal, chairman of the department of pathology at the Bangabandhu Sheikh Mujib Medical University (BSMMU), said the per capita healthcare expenditure was increasing in Bangladesh.

“Just a few years ago, it was below $10, now it is $27. The market is growing and we have the scope to increase our local products. The products that are manufactured here are of good quality; so we can also grab the export market,” said Prof Kamal.

Amid rising global trade tensions and sluggish global economic outlook for 2020, the global healthcare market is expected to cross the $2 trillion mark in 2020, according to ‘Global Healthcare Market Outlook, 2020’ report.

The new vision for healthcare for 2020 and beyond will not just focus on access, quality, and affordability but also on predictive, preventive, and outcome-based care models promoting social and financial inclusion. Social Determinants of Health (SDOH) will emerge has a big theme across progressive health systems to proactively engage the right patients and improve health outcomes to help healthcare organisations meet quality standards, it said.

In 2020, consumer-driven models of healthcare will gain more market traction, as they stand to better bridge the gap of what consumers want and what healthcare can deliver, the report added.
Source: http://www.theindependentbd.com

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