Bangladesh University of Professionals

Term Paper on
Bangladesh Pharmaceutical Industry: Perspective and the Prospects
Course Name
Industrial Economics
Course Code: ECON- 2405

Submitted By
MD. Tamzid Hossain
ID: 2214881110
Section: B

Submitted To

Nahin Rahman

Assistant Professor

Department of Economics

Bangladesh University Of Professionals

Introduction

Bangladesh's pharmaceutical sector stands as a remarkable success story,

exemplifying the country's progress towards leaving the Least Developed Country
(LDC) category by 2024. This transition is driven by substantial improvements in
health, education, reduced economic vulnerability, and an economic boom. Among
Bangladesh's various sectors, the pharmaceutical industry is one of the most
technologically advanced and dynamic, contributing significantly to national pride
and economic growth.

The industry's growth has been propelled by a combination of skillful attitudes,

knowledge, and innovative ideas from pharmaceutical professionals. The
government's support, particularly through the Drug Policy of 1982, has played a
crucial role by restricting imports of locally manufactured drugs and protecting the
industry from external competition. As a result, 97% of the country's medicine
demand is met by local production, primarily by national pharmaceutical
companies.

The pharmaceutical sector is expanding rapidly, with some companies achieving

certifications from international regulatory authorities such as the UK-MHRA,
Australia-TGA, and the EU for quality management and product manufacturing.
Currently, there are 851 factories in Bangladesh producing a wide range of
medicines, including allopathic, Unani, Ayurvedic, homeopathic, and herbal
medicines. The industry is poised to enter highly regulated overseas markets,
supported by its successful track record.

The local pharmaceutical industry not only meets 98% of the domestic demand but
also exports to over 127 countries, making Bangladesh the largest producer of
formulated drugs among the LDCs. The export of pharmaceuticals significantly
contributes to the country's GDP and has become the second-largest potential
sector for earning foreign currency. Market size projections suggest that the
pharmaceutical industry could reach BDT 330,000 million by 2024, with high
growth rates expected in the coming years.

Despite its successes, the pharmaceutical industry faces challenges, particularly in

the export process, which is complex and time-consuming. Simplifying this
process could enhance the industry's export capacity. Additionally, continuous
investment in Research & Development (R&D) is necessary to sustain and further
the industry's growth.
The industry produces a diverse range of pharmaceutical products, including
sensitive drugs such as insulin, hormones, cancer drugs, and vaccines. It also
exports active pharmaceutical ingredients (APIs) and various dosage forms to
numerous countries. The government's proactive measures, such as the
amendments to the Drugs (Control) Ordinance, have facilitated technological
transfer and mutual agreements with international pharmaceutical companies,
further boosting the industry's capabilities.

Pharmaceutical promotions in Bangladesh are expected to be factual, evidence-

based, and balanced, avoiding unethical influences on doctors' autonomy in
decision-making. Transparent sponsorship of Continuous Medical Education
(CME) activities by pharmaceutical companies is encouraged to maintain ethical
standards.

In conclusion, Bangladesh's pharmaceutical sector is a testament to the country's

economic and technological advancements. With continued government support,
strategic simplification of export processes, and a focus on R&D, the industry is
well-positioned to expand its global footprint and contribute even more
significantly to the national economy. The sector's growth trajectory suggests a
promising future, with potential to become a major player in the global
pharmaceutical market.

Pharmaceutical Products Available in the Market

Bangladesh's pharmaceutical industry is a highly developed and technologically

advanced sector, producing some of the most sensitive drugs such as insulin,
hormones, cancer treatments, and vaccines. These vaccines protect against 20
bacterial and viral diseases, including pertussis, diphtheria, typhoid fever,
poliomyelitis, influenza, mumps, rabies, hepatitis B, and tetanus. The industry also
exports medicines globally, including to Europe, aiming to expand its export
market further.

Bangladeshi pharmaceutical companies export active pharmaceutical ingredients

(APIs) and a wide range of products covering all major therapeutic classes and
dosage forms to 79 countries. In addition to common forms like tablets, capsules,
and syrups, they export specialized products such as HFA and CFC inhalers,
suppositories, nasal sprays, injectables, and IV infusions. These products are well-
received by medical practitioners, chemists, patients, and regulatory bodies in
importing nations. The packaging and presentation of Bangladeshi pharmaceutical
products meet international standards, reinforcing their global acceptance.
Pharmaceutical Industrial Research & Development (R&D)
Research is crucial in the pharmaceutical industry as it forms the basis for
developing new and quality products. Some companies have advanced research
and development (R&D) facilities with high-tech equipment and experienced
teams to create new drug delivery systems and dosage forms. It's important for the
industry to promote products, especially those that have had significant investment
in their development.

Pharmaceuticals require stringent testing due to their dual capacity to enhance

health or cause harm. Ethical marketing and research practices are vital to prevent
undue influence on medical decisions. Effective promotion focuses on packaging
and communication to shape perceptions among both doctors and the public.

Promotion should be factual, evidence-based, and balanced. One common

promotional method is through educational activities, such as drug reps visiting
doctors, company-sponsored educational programs, journal clubs, and conferences.
These activities can help market products under the guise of education. Companies
often have dedicated funds for these educational grants.

However, there can be ethical concerns about the influence of these promotions.
Doctors must be aware of potential conflicts of interest and ensure transparency
about sponsorships. The cost of these events should be reasonable and not overly
lavish. Sponsors should accept that not all educational activities will lead to
immediate marketing benefits.

Currently, the government has not established a strong and dedicated R&D sector
in the pharmaceutical industry, which is necessary for the industry's growth and
success. Immediate action is needed to develop effective R&D to prevent the
industry's progress from slowing down.

Product Marketing, Promotion and Education

Lifelong learning is essential for medical practitioners, especially in the era of

Information Technology and Patient Empowerment. Continuing Medical Education
(CME) goes beyond occasional lectures, focusing on comprehensive personal and
professional development. Some pharmaceutical companies fund CME from their
marketing budgets as part of their promotional efforts. Ideally, marketing should
address the needs and expectations of doctors and patients, improving doctors'
performance and patient care. However, interactions between the medical
profession and the pharmaceutical industry often prioritize industry goals over
educational objectives. Studies show that doctors' prescribing patterns are
influenced by industry-sponsored educational programs, even within ethical
guidelines.

How can education and promotion co- exist in a practical and ethical manner?

A clear distinction must be made between ethical and unethical interactions

between doctors and the pharmaceutical industry. In developing countries,
including Bangladesh, guidelines are often lacking. However, the Bangladesh
Medical Research Council (BMRC) has established guidelines. These emphasize
that doctors should avoid promotional activities that could harm their professional
independence and reputation in the eyes of peers, colleagues, media, patients, and
the general public.

Global Marketing- Education:

As a Least Developed Country (LDC), Bangladesh can produce generic drugs

without intellectual property rights conflicts until 2033. This has boosted export
earnings, reaching around Tk 4 billion, especially in regulated markets like the US
and Europe. Key policies driving this growth include the Drug Control Ordinance
1982, which banned foreign pharmaceutical imports, and the relaxation of the
TRIPS agreement, allowing Bangladesh to reverse-engineer patented drugs.

In fiscal year 2015-16, pharmaceutical sales surged to Tk 15,600 crore from Tk

170 crore in 1982, dominated by local companies. While oncology drugs are still
imported, local companies are investing heavily in this segment, poised for future
growth.

Despite the industry's success, it relies on imports for over 90% of raw materials,
making it vulnerable to external shocks. To mitigate this, the government is
constructing an active pharmaceutical ingredient (API) industrial park in

Munshiganj. Once operational, this park will enable local companies to source up
to half of their raw materials domestically.

Quality Control

In Bangladesh, two main organizations regulate drugs and pharmacies: the

Directorate General of Drug Administration (DGDA) and the Pharmacy Council of
Bangladesh (PCB). The DGDA oversees all aspects of drug import, export,
production, and sale, while the PCB controls pharmacy practice. The National
Drug Policy (2005) mandates strict adherence to the World Health Organization’s
Good Manufacturing Practices (GMP), with regular inspections by the DGDA.

Key regulations include restrictions on imported drugs if produced by four or more

local firms, a ban on the local production of certain non-essential or harmful drugs,
and strict price controls on some principal medicines. Recently, the government
suspended licenses for 86 manufacturers and permanently revoked 19 others for
violating GMP guidelines.

Bangladesh earned $43 million from pharmaceutical exports in the first five
months of the 2017-18 fiscal year. Top companies like Square, Incepta, and
Beximco lead the sector. The country's educated workforce and low costs attract
multinational companies and Contract Manufacturing Organizations (CMOs),
offering significant growth opportunities. The pharmaceutical sector is a leading
and highly successful industry in Bangladesh.

Trafficking, Reproducing and Marketing of Low Quality Drugs

Foreign drugs, often expensive, flood the local market via improper channels.
Suspected local reproduction of valuable drugs contributes to the black market.
Quality control is compromised to meet demand, prioritizing profit over safety.
Legal actions by the Bangladeshi government target these corrupt practices, though
wholesalers in the medicine market remain implicated.

Concerns of the Pharma Leaders on Success to capture Global Markets

At the Samson H Chowdhury Memorial Conference 2017 in Dhaka, leaders in the

pharmaceutical sector discussed Bangladesh's readiness for future challenges. They
emphasized the need for a stronger presence in global markets but expressed
concerns over government policies. Innovation and a focus on generic products
were highlighted as key strategies, with potential for a $112 billion market.
Suggestions included promoting products through agents and expanding marketing
efforts globally. Bangladesh's pharmaceutical exports showed growth, reaching
$52.64 million in the July-January period, up 8.5% from the previous year.

Conclusion

Bangladesh's pharmaceutical sector has witnessed remarkable growth, contributing

nearly one percent to the GDP and poised for further expansion. With healthcare
expenditure on the rise, particularly out-of-pocket expenses, which currently
represent around three percent of GDP, the domestic market is expected to continue
its growth trajectory. However, ensuring ethical operations, scientific rigor, and
robust administrative structures will be crucial for sustaining this growth and
achieving grand successes in the industry. This assessment draws upon data from
various sources, including BMI research, Bangladesh pharmaceuticals, healthcare
reports, and Quintiles IMS.