Pharmaceutical sector’s bright prospect

The pharmaceuticals sector in Bangladesh is experiencing a fast growth as more people, armed with rising purchasing power, afford more healthcare products. Interestingly, in recent years rural markets were the main growth driver of pharmaceuticals products, helped by the modernising agricultural sector and the government's huge development projects. The remittance, sent by crores of migrant workers, has changed the economic landscape in the rural areas. As the income of rural households grew, people are spending more to access healthcare products. Per capita healthcare expenditure in Bangladesh nearly trebled to $41.9 from $15.8 in the last decade.

There was a time when people used to make delays while taking treatment because they could not afford it. Now, most of them access treatments rather quickly and take medicines. Drugmakers are also making fresh investments as their sales are rising in the local and international markets. Industry insiders say that the sector can flourish like the ready-made garment industry, the largest export earning sector of the country. The size of the global pharmaceutical market in 2021 was $825 billion. If Bangladesh can take even 5 per cent of this, the country will have another sector like the RMG.

According to a report published in this newspaper yesterday, the country’s Pharma export witnessed a growth of over 112 per cent leading to the sector achieving its annual export target for the first time in the last fiscal year. The export fetched up to $188.78 million in the recently concluded FY2021-2022 from $89.17 million earned in FY2016-2017.

Industry insiders and experts say the sector has maintained growth for decades but the recent decade has been more significant as the leading companies have focused more on highly regulated markets, including the USA, the UK, Canada, Australia, Germany and the European Union. Covid-19 has given opportunities to the companies to export more medicines as well. While all these developments are indeed positive signs there is hardly any room for complacency. In terms of API, Bangladesh is heavily import-dependent. In FY21, the country's API import amounted to $1050.1 million.

As a least developed country, Bangladesh is currently enjoying a relaxed patent condition under the Trade-Related Aspects of Intellectual Property Rights (TRIPS). This is a privilege which is expected to end in 2026 when Bangladesh is set to graduate into a middle-income country. Without an extension of TRIPS for the pharmaceutical sector, the government will have to withdraw its control over medicine imports, which will make the market more challenging for small manufacturers.

Besides, companies will have to buy patents from a drug's parent company to produce a generic version, which will ultimately increase the cost of production.

To circumvent the looming hurdles, experts suggest that pharmaceutical companies should begin producing raw materials for making medicines or active pharmaceutical ingredients (API) locally. Building an API industrial park in Munshiganj to this end has been in talks for decades but so far there has been little progress.

We believe that attempts should be made to retain the TRIPS terms till 2033 through the World Trade Organisation (WTO).

Pharmaceutical companies need to focus on strong research, upskill human resources, explore opportunities for setting up joint ventures and encourage contract manufacturing. Bangladesh should take advantage of a compulsory licensing provision of the TRIPS agreement by bringing in required changes in the patent laws and drug policies.

There is a need for a vigorous export drive. Pharmaceutical companies must get their marketing policies and strategies right to capture a sizeable portion of the markets of at least 20-30 countries. One of the developments that should make the drug companies and the country optimistic about the industry's future is the local drug companies' access to the US market.

Bangladesh’s achievement in the pharmaceutical sector is phenomenal and the secret to this success was the skilled human resource. Technological advancement is taking place in this sector so the sector needs more research for more advancement.