Bangladesh pharmaceutical industry blooms bigger
Image collected
In 2018, the country's domestic pharmaceutical market size stood at Tk20,511.8 crore with 15.6% compound annual growth rate (CAGR) for the last five years.
Once largely dependent on imports and multinational companies to meet the local demand, Bangladeshi pharmaceutical industry is growing very fast meeting 98% of domestic demand and posting a 27% growth in export earnings.
In 2018, the country's domestic pharmaceutical market size stood at Tk20,511.8 crore with 15.6% compound annual growth rate (CAGR) for the last five years.
On top of that, the sector is expected to grow at 15% year-on-year to reach $5.11 billion by 2023, propelled by high investment by local companies as they seek to grab a bigger share of the global market.
Growth drivers for domestic markets
Growing per capita income, population growth, rise in life expectancy, changing disease profile, lifestyle change and rapid urbanization are the key drivers for boom in the domestic market consumption.
Besides, new investment in the sector and adoption of modern technology have increased the production capacity.
“Bangladesh’s economy is growing at over 8% per annum with increased per capita income of $1909, while life expectancy increased to 73 years,” Bangladesh Association of Pharmaceutical Industries Secretary General SM Shafiuzzaman has told Dhaka Tribune.
Life expectancy of people has significantly increased — the average life expectancy of 66.4 years in 2002 rose to 72.81 years in 2017.
Improved healthcare facilities and diagnosis with modern technology and rapid growth of chronic diseases due to change in lifestyle and environment factors are other reasons for the growth of domestic drug market, Shafiuzzaman mentions.
People are now more conscious about health and want to live longer, leading them to consult physicians regularly and take different medicine as per the prescription, the business leader says.
Besides, senior citizens are vulnerable to four types of diseases such as cardiovascular diseases, cancer, diabetes and chronic respiratory diseases, which contribute to increased consumption of medicines, Shafiuzzaman points out.
In addition, the new generation is taking more and more to fast food, which leads more people to buy antiulcerants class (acidity) medicines, he says.
Exports open new avenues for Bangladesh
Global certification and adoption of new technologies along with efforts to make local medicine familiar abroad and cash incentives against exports of medicine are the key reasons for the sharp rise in exports earnings, the sector people say.
According to Export Promotion Bureau (EPB) data, Bangladesh’s medicine exports registered a 25.60% rise to $130 million in FY19, which was $103.46 million the previous year.
“In taking the export earnings to a new high, exports to the United States of America played an important role and it is a great achievement and milestone for Bangladesh,” Shawkat Haider, General Manager (Business Development of Beximco Pharmaceuticals, tells Dhaka Tribune.
Bangladeshi pharmaceutical makers are now compliant and regulated as some leading companies have received certification from US FDA and UK MHRA, Haider says.
According to Bangladesh Association of Pharmaceutical Industries (BAPI), approximately 1,200 pharmaceutical products received registration for export in the last two years.
Beximco Pharma, a leading exporters to the US, has received US FDA certification, while Square Pharmaceuticals and Incepta got UK MHRA (Medicines and Healthcare Products Regulatory Agency) certification to exports items.
In addition, demands for generic medicine in the global market, manufacturers' drive to penetrate export markets and government incentives to do that acted as catalyst to post share rise in the export earnings, he adds.
Since the sector is very sophisticated and sensitive, manufacturers of medicine have adopted modern technology, which is hugely contributing to the growth of pharmaceuticals industry of Bangladesh both in domestic and exports markets, Haider mentions.
Currently, Beximco Pharma and Square Pharmaceuticals are exporting medicine to the US market.
Challenges and ways forward
“One of the major challenges for the country’s medicine sector is high dependency on imports for raw materials, which eats up competitiveness in the global markets,” says Shawkat Haider.
According to industry people, Bangladesh imports 99.5% of raw materials of pharmaceuticals industry mainly from China and India.
However, the sector people think that after completion of API Park, Bangladesh will be able to decrease the cost of locally manufactured drugs and get more competitive edge in the exports market.
The country can save at least 70% of import cost of raw material by producing active pharmaceutical ingredient (API) at the API Park in progress, which will drastically reduce the cost of production and help Bangladesh achieve price competitiveness in global market, Mizanur Rahman Sinha, managing director the ACME Laboratories Ltd, says.
“In addition, Bangladesh can earn from the $238 billion global market by exporting API," he points out.
To this end, he suggests, the government should concentrate on quicker completion of the API Park as soon as possible to help pharma companies start production there.
Exporters have urged the government to engage commercial counselors to explore new markets and search opportunity to expand export earnings as the manufacturers have quality products.
The sector people have also urged the government to take steps to remove difficulties in the way of investing outside the country.
Currently, an investor can invest only a portion of his profits for marketing, which is not enough, they mention.
Scope to grow further
According to Business Communications Company (BCC) Inc, a US-based research organization, the global market for generic drugs is expected to reach $533 billion by 2021 from $352 billion in 2016 at a compound annual growth rate (CAGR) of 8.7%.
“Bangladesh is going to be a major global hub for high quality low cost generic medicine and vaccine. India and China are losing cost advantages,” Showkat mentions.
In reaping the benefits, Bangladesh needs to develop the knowledge and capacity to grab a bigger share of the global pharmaceutical market, he suggests.
Local drugs manufacturers of Bangladesh mainly produce generic drugs. Of the total amount, 80.0% are generic and 20.0% patented drugs.
Generic drugs are copies of brand-name drugs having same dosage, intended use, side effects, risk, safety and strength as the original drugs.
Patent waiver a boon for Bangladesh
In 2015, the World Trade Organization (WTO) Council extended patent waivers for pharmaceuticals products for its members in the least developed countries category to January 2033.
As an LDC, Bangladesh will not need to pay royalty for producing patent drugs till 2033, which is a great opportunity for Bangladesh to improve its export share in the pharma products.
On the other hand, around 1,200 pharmaceutical products got registration for export, which is likely to result in a massive jump in earnings within the next few years.
Source: https://www.dhakatribune.com