Pharma exports can reach $5b in five years: Experts

Bangladesh’s pharmaceutical industry has the potential to earn $5 billion in exports within the next five years, but this feat will require a strong backward linkage industry, investment in human resources, research and innovation.

Experts made the remark at a seminar on “Export of Pharmaceutical Sector upon LDC Graduation: Strategies and Way Forward,” organised by the Dhaka Chamber of Commerce & Industry (DCCI) in the capital on Saturday.

They added that Bangladesh’s pharma industry earned $189 million in FY22. If Bangladesh manages to grab even five per cent of the global export market of $825 billion, the country can earn around $41 billion from this sector – close to what the RMG industry is earning now.

Lawmaker Salman F Rahman, private sector industry and investment adviser to the prime minister and Vice President of Beximco Pharma, said, “At present 15 per cent of the APIs [active pharmaceutical ingredients] are being produced locally, but value addition is the most important issue in this sector.

“The local pharmaceutical sector should have facilities similar to that of the RMG sector. If such facilities are made available to the country’s pharma industry, it will be able to earn $5 billion through exports in the next four to five years.”

Presenting the keynote at the programme, Centre for Policy Dialogue’s (CPD) Distinguished Fellow Prof Dr Mustafizur Rahman said, “The pharmaceutical sector will be second to only the RMG industry if Bangladesh manages to capture 5 per cent of the global export market.

“Bangladesh ranked 67th in the global pharma export market of $825.65 billion in 2021 and our export amount was $160 million that year.”

The country’s pharma exports witnessed a boom during the last decade with a 215 per cent growth from $60 million in FY13 to $189 million in FY22.  Vietnam is the major competitor in the export market for Bangladesh.

The local pharmaceutical sector meets 98 per cent of Bangladesh’s domestic demand.

“Bangladesh imported APIs worth $1.05 billion in FY21. A strengthened backward linkage in API production can help boost our export competitiveness,” Mustafiz said, adding, “We will achieve LDC graduation in 2026.

“But we will have to face a lot of challenges if we fail to graduate in a sustainable way. 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.”

Bangladesh will get the TRIPS facility till 2033.

Besides, a Bolar provision allows interested (generic) manufacturers to start producing test-batches of a product before the expiry of the patent, to collect necessary data for submission to regulatory authorities.

This provision can be made use of Bangladesh’s pharmaceutical companies even after the TRIPS flexibilities expire, the keynote mentioned.

Contract manufacturing (toll processing) also has excellent potential in the Bangladesh context.

It saves the client company from undertaking significant capital investment since the local contract manufacturer already has the plant and equipment necessary to make the product – a market of $79.2 billion in 2019, rising at an average annual rate of 7.5 per cent.

Salman F Rahman addressed the programme as the chief guest, while Principal Secretary to the Prime Minister Ahmad Kaikaus was present as special guest. DCCI President Rizwan Rahman chaired the seminar.

Rizwan, in his opening remarks, said, “Upon economic graduation, our pharmaceutical sector may be affected by loss of IP (intellectual property) waiver, resulting in decline of generic and patented drugs production and export share.”

Ahmad Kaikaus said, “LDC graduation will be an opportunity for us, but there are some challenges we must have to overcome. To identify the challenges of this sector,

various stakeholders’ consultation meetings can play an important role.”

He recommended business communities to take austerity measures from their respective sides to tackle the ongoing volatile situation in the world triggered by the Russia-Ukraine war, so Bangladesh’s economic activities do not get hampered.