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After the LDC graduation, the Bangladesh’s economy would face some challenges. For example, the quota-free facility would go while the country would need to adopt a balanced duty structure for import to reduce monetary loss, said Managing Director and founder of One Pharma KSM Mostafizur Rahman in an exclusive interview with The Business Post’s Kamrul Hasan
Though the Export Promotion Bureau data showed that the pharmaceutical industry, for the first time in last seven years, recorded a negative growth in the first half of the current fiscal year, Managing Director of One Pharma Ltd, KSM Mostafizur Rahman thinks that it is temporary.
Rather he emphasised the importance of taking necessary preparations so that the drawbacks coming through the graduation from the status of Least Developed Country (LDC) could be tackled as the industry would be one of the major industries to be affected by the graduation process.
At the triennial review in 2021, the UN Committee on Development Policy (CDP) officially confirmed that Bangladesh will finally graduate from the LDC status in 2026. In 2016, the TRIPS (Trade-Related Aspects of Intellectual Property Rights) facilities were extended to December 31, 2032. The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is the most comprehensive multilateral agreement on intellectual property (IP).
One Pharma MD Mostafizur said that to replace the trade privileges with industrial competence the government has to comply with any of the approaches – defer the LDC graduation until 2030 and ensure TRIPS facilities to be available till January 2033 or at least at the end of 2030.
By the time, the industry would be ready for transition. And also the patent law is needed to be amended in favour of the industry like India. So that, the life-saving medicines could be out of patents and so at least the prices could be kept cheaper in the local market.
Quoting a series of studies, the review report-10 of CDP, published in 2020, titled The need to extend the WTO TRIPS pharmaceuticals transition period for LDCs in the Covid-19 era: Evidence from Bangladesh, mentioned that trade privileges have helped the industry grow, lowering medicine prices in the local and international markets and improving health outcomes.
The report also mentioned that the graduation poses serious risk to the industry in the country. The loss of access to the TRIPS extension could potentially jeopardise not only the domestic economy but also the health system. It also undermines parts of the industry and raises the prices or restricts supply for other countries which import inexpensive generics from Bangladesh.
Mostafizur Rahman said many ministries are working on finding out the solutions. Like, pointing out necessary aspect where capacity building for both public and private end is needed. Besides, the country has to enhance the capacity of Chittagong port with providing more policy support and smooth operations in the port to make it more business-friendly.
According to him, the challenges may be different from industry to industry. But for the pharmaceuticals industry, priority should be given to registering global molecule or top selling products across the globe and also installing necessary infrastructure.
Stressing the need for required changes in the patent law, he said if the LDC graduation is not deferred, the companies can at least produce life-saving generic medicines like India. “We need to bring about such changes in the patent law with help from expert lawyer to ensure the protection of the sector. We also have to ensure capacity building before the graduation is completed, in case we cannot be able to defer the LDC graduation.”
Lack of skilled manpower or human resources is the major barrier to the expansion of the industry. The only advantage is that the industry is having cheaper manpower in comparison to neighbouring country India.
The industry still manages to grow with them. But after LDC graduation, many pharmaceuticals would have to be shut down for a shortage of skilled manpower, he added.
Foreign companies may return after LDC graduation
Mostafizur Rahman predicts that after the graduation, companies with weak or no infrastructure can survive as they would need to pay huge royalty.
In this case, multinational pharma companies would start their operation again. Even many companies have already started expanding their footprint in the country. These companies would have no issue with royalty money.
Even the government approach to save the local companies would not be that much fruitful at that time, he said.
Still there is scope of new local entrepreneurship
For investment industry attractiveness is a major issue to invest in and no doubt pharmaceutical is one of the most 10 attractive industries. In all consideration, pharmaceutical is still one of the best places to invest.
“What one needs to identify is about the strategy to turn the thighs around, what will be the competitive advantage and so on. They can expand local industry if they have right acumens, identified his competitive advantage,” he said.
According to the MD, at present more than 30 per cent products are biologic while around 5 per cent are traditional products. “So, choosing right selling product is crucial.”
“After seven years, I still feel the need of more investment. Our graphs of development keep going higher since the inception and now we are setting our sights on anti-cancer products and biologics,” he shared his experience and vision onward.
Pharmaceutical is a sector which needs to be strategic and have to grow with experience, good work and connecting people. And taking the whole thing to optimum level is the main thing. “Business is all about people. You have to find out right strategy. Copying others’ strategy would not work at all. You have to find out some competitive advantages which are not available in other companies – it could be product, it could be process, it could be some hope, dream or aspiration whatever it is.”
Business means innovation and marketing. Innovation means doing something in different way. Not copying of XYZ Company, he added.
