Govt looks to ramp up API production for burgeoning pharma sector

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Bangladesh, a laggard in the production of recyclables for the $3 billion pharmaceuticals industry, has made a four-fold jump in the manufacturing of active pharmaceutical ingredient (API) in the last decade to meet growing demand.

However the current API production is still minuscule as the country needs to import $1.3 billion worth of raw materials annually for the pharmaceuticals sector.

Drug-makers have to intensify efforts to make more recycleables locally as the over-reliance on the imports isn't viable for the reason that supply chain could face disruption and the price may witness volatility, said industry people.

Besides, it could not allow pharmaceutical companies to bring down the cost of recycleables and thus, the price of medicines.

Although the API production has not grown commensurate with the pharmaceutical sector, local companies have been producing high-quality recycleables on a restricted scale, helping the drug industry add value to their products.

Ten local companies, including Eskayef, Square, Beacon and Beximco, produce APIs, said SM Shafiuzzaman, secretary-general of the Bangladesh Association of Pharmaceutical Industries (BAPI), which represents about 250 local drug makers.

"Local production can at best meet 10 to 15 % of the total annual demand for the recycleables from the pharmaceutical sector," he said.

The government is setting up an API commercial park in Munshiganj to fill the void, cut reliance on foreign markets and save forex.

The park has been developed on 200 acres of land in the adjoining Dhaka-Chattogram Highway under Gazaria upazila at the price of Tk 330 crore. It took around 12 years to build the estate following the government undertook the project in 2008.

"If the API park may become fully functional, it could focus on 50 to 60 % of the demand," Shafiuzzaman said, adding that Bangladesh would not be able to manufacture all the APIs due to patent issues.

The country imports APIs mainly from China and India.

Local API production can provide Bangladesh two advantages. First, it'll decrease the expense of locally made drugs and enhance the cost advantage in exports.

Second, APIs could be exported too. The global API market size will probably be worth $135 billion. "So, you will find a huge investment opportunity," Shafiuzzaman said.

Pharmaceuticals companies currently produce APIs worth Tk 1,950 crore, up from about Tk 500 crore ten years ago, according to Monjurul Alam, director for global business development at Beacon Pharmaceuticals.

"You will find a huge potential for investment in API manufacturing," he said.

If APIs are stated in adequate quantities, local companies will be able to purchase those immediately, that will reduce the lead time of production aswell, said Alam.

The BSCIC allotted 40 plots to investors. But work for establishing manufacturing facilities are ongoing for only five companies.

It remains to be known when all of the investors will be able to start establishing their facilities amidst the monetary slowdown brought about by the pandemic.

This is for the reason that Bangladesh Small and Cottage Industries Corporation (BSCIC) will not give no-objection certificates if payments against plots are due, said Shafiuzzaman, the association secretary-general.

Without the certificates, banks will not provide the loans medium and small companies have to set up the facilities, he said.

Because of this, only the big investors will be able to start manufacturing operations, Shafiuzzaman said.

All the major pharmaceuticals companies, including Eskayef, Square, Incepta, Globe, Opsonin and Beximco, took plots at the API park.

"The plots are prepared for API facilities to be create as the BSCIC has set up all utility services," said Md Mostaaq Hasan, chairman of the BSCIC.

The organization is hoping to create 25,000 jobs directly at the API Park once all of the investors go into operation. At least Tk 2,000 crore will be committed to the park, he said.

The owners of the plots could have started the construction quite a long time back, however the emergence of Covid-19 delayed the infrastructure development, he said.

According to allotment conditions, the plot owners could have to start operations within a year.

Hasan acknowledged that investors might not be able to start the production within the stipulated time due to the delay due to the pandemic.

"We hope Bangladesh would be almost self-sufficient in API production within 3 years. This will cut our reliance on imports to a large extent," said Abdul Muktadir, chairman and managing director of Incepta Pharmaceuticals.

Incepta is establishing an API factory in Dhamrai and another in the API Park in Munshiganj.

"We will be able to start out the API production by 2 yrs," he told The Daily Star.

He said all of the companies were competing in the same markets. So, if one company doesn't have its API and instead buys it from other companies, it would fall behind on incurring higher production cost.

Five companies have already started establishing manufacturing facilities.

Included in this are Acme Laboratories, UniMed UniHealth Pharmaceuticals, Healthcare Pharmaceuticals and IBN Sina Pharmaceutical Industry, said Parvez Ataur Rahman, project director of the API Park.

He expects the firms to be able to get started on businesses by next year.

Muhammad Halimuzzaman, deputy managing director and ceo of Healthcare Pharmaceuticals, said their facility at the API Park was about to be ready and the company plans to go for trial operations soon.

Healthcare Pharmaceuticals could be the first company to begin operations, he said.

Mizanur Rahman Sinha, managing director of Acme Laboratories, said the pandemic had delayed their development work.

"We will open letters of credit to import equipment early next year."

Md Ayub Hossain, deputy director of the Directorate General of Drug Administration, said the pharmaceuticals companies don't need separate licences to manufacture APIs since it is the main drugs.

All necessary equipment to create a central effluent treatment plant have reached the site.

The investors are paying around Tk 100 crore to create it up through the federal government, which awarded the task to Indian company Ramky Environment Services.

Source: https://www.thedailystar.net

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