Bangladesh is poised for major growth in its pharmaceutical industry

The pharmaceutical sector is already the largest of any least developed country. Dominated by the manufacture of generic final formulations using mostly imported APIs*, the market was worth $590 m in 2007 and growth has averaged 12% per annum since 2002. ⁽¹⁾

The industry manufactures around 450 generic drugs for 5,300 registered brands with 8,300 different strengths and dosages. These include a wide range of products such as anti-ulcerants, fluoroquinolones, anti-rheumatic non-steroid drugs, non-narcotic analgesics, antihistamines, and oral anti-diabetic drugs. Some larger firms are also starting to produce anti-cancer and anti-retroviral drugs.

Local firms account for 82% of the market in final formulations. Their dominance is explained by the 1982 Drugs Ordinance which prohibits the import of drugs which are manufactured in Bangladesh by 4 or more local companies. A further 13% of the market is served by local subsidiaries of multi national corporations, Novartis and Aventis. Imports account for only 5%. However, Bangladesh imports around 80% of the APIs used in the sector. ⁽²⁾

The industry is heavily centralised. Some 85 firms are involved in producing drugs, but the top ten enjoy a 70% share. The two largest, Beximco and Square, have a 25% market share. ⁽³⁾

Bangladesh also exports final formulations. In 2007 drugs worth $35.9 m were exported to 65 different countries, a fourfold increase in value since 2003.⁽⁴⁾ The largest exporting company by far is Novartis (Bangladesh) Limited, which operates an EU GMP*-certified manufacturing plant. The industry began by focusing on less regulated markets but Square now has UKMHRA* certification and Beximco is certified by TGA, enabling them to export to highly regulated markets. Bangladesh’s export markets now include Japan, Canada, Italy, Korea, Saudi Arabia, Malaysia, UK and USA.

The Pharmaceutical Industry in South Asia

South Asia plays a large role in the global pharma industry. India is the world’s third largest producer of APIs and produces around 22% of its generic drugs. With the domestic market now well developed India’s dominant position as a manufacturer of generics is likely to be progressively eroded as a result of the application of patent laws under the WTO’s TRIPS* agreement.

*APIs=active pharmaceutical ingredients

EU GMP=European Commission good manufacturer practices

UKMHRA=United Kingdom Medicines and Healthcare Product Regulatory Agency

WTO's TRIPS=World Trade Organization's Trade-Related Aspects of Intellectual Property Rights

References

⁽¹⁾ IMS Quarterly Review, 4th Quarter 2007, quoted in “Bangladesh, Growth, Investment, Opportunity”, page 80, published by A T Capital Markets, 17 April 2008.

⁽²⁾ “Public & Private Sector Approaches to Improving the Pharmaceutical Quality in Bangladesh”, page 5, published by the World Bank, Bangladesh Development Series, Paper no. 23, March 2008.

⁽³⁾ Reference 2, page 5, quoting Chowdhury, F. (2006) “A Strategy for Establishing the API Park”. Consultant Report for the Ministry of Industry, Government of Bangladesh, 2006.

⁽⁴⁾ Reference 1, page 81, quoting the Bangladesh Directorate of Drug Administration (DDA).