Pharma exports see 1st negative growth in 7 years

Pharmaceutical exports from Bangladesh have witnessed negative growth in the first half of FY2022-23, which has not happened during the first half of a fiscal year since FY2016-17.

Industry insiders said this has happened due to several reasons, including negative economic impacts continuing from FY2021-22.

The main reasons also include the ongoing global economic crisis, rising inflation, change in drug consumption, LC (Letter of Credit) related problems and lack of promotions during the Covid-19 pandemic.

However, they expressed hope that this is a temporary situation and that the export earnings will return to positive through the rest of this fiscal year.

According to Export Promotion Bureau (EPB) data, the sector saw a 22 per cent growth in the first half of FY22 and it is now 12.06 per cent lower than that in the first half of FY23.

In FY22, pharmaceutical products worth $105.50 million were exported to some 118 countries across the world in the July-December period. During the first six months of FY23, the amount earned was $92.78 million.

Myanmar remains the largest destination after receiving products worth $17.17 million while Sri Lanka is in the second spot with $10.81 million.

The other top three destinations are the United States ($8.86 million), the Philippines ($6.45 million) and Afghanistan ($5.73 million).

While sector experts consider pharma as one of the few industries that are “recession-proof,” a Global Data survey — named State of the Biopharmaceutical Industry 2023 and released earlier this month — found that it can be affected by macroeconomic headwinds.

In it, pharma industry leaders cited inflation as the number one challenge for 2023.

Top officials from some of the country’s big companies, however, said their exports have even gotten back on track to positive growth but the industry’s overall export may fall. It will be clearer once all companies report their half-yearly reports.

They said there was a huge demand for medicines, mostly those needed to treat Covid patients, during peak pandemic times.

Since that demand decreased last year, this led to a temporary downfall in export earnings.

Talking to The Business Post, Bangladesh Association of Pharmaceutical Industries (BAPI) Secretary General SM Shafiuzzaman said this industry’s export has been growing significantly for the last few years but FY23 may see the opposite.

Many issues like global instability, inflation, change in drug intake behaviour, LC-related issues and lack of promotions abroad will contribute to this, he added.

“During the pandemic, we didn’t carry out any sort of promotional activities abroad to inform them about our quality medicines. That contributed to the decrease in the number of orders,” said Shafiuzzaman, also the managing director (MD) of Hudson Pharmaceuticals Ltd.

He, however, hoped that the situation will return to positive growth by March (end of the current quarter) or the end of the second half of FY23.

One Pharma MD KSM Mostafizur Rahman said that not every company has seen negative growth. “Those with immature infrastructure and no innovation are suffering the most.

“The biotech pharma products market is witnessing around 30 per cent growth globally and the traditional market is about 4-5 per cent. And the situation can easily be understood.

“The downfall is an average of the total market. But the industry is capable of coming out of this situation,” he added.

He said the prevailing negative growth indicates that the companies and authorities need to take a series of positive measures soon to keep the industry sustainable.

“Recession may hurt progress. So, diversification of medicines, vaccines and other bio-innovation is now much needed.

“Also, it raises the urgency to prepare better for the time after LDC graduation and adopting business out of TRIPs,” Mostafizur added.