Bangla Pharma: Waiting in the wings
Thursday, January 27, 2005 08:00 IST
Pharmaceutical Industry has grown in Bangladesh in the last two decades at a considerable rate. Currently estimated at US $ 482 million (IMS), the industry may look smaller compared to the population size of 124 million. There are nearly 200 manufacturers who together make about 95% of the formulations required for the country. Growing at an average rate of 9%, the formulation industry offers tremendous potential.
Local firms manufacture about 6,000 brands of medicines in different dosage forms. There were, however, 1,600 wholesale drug license holders and about 39,000 retail drug license holders in Bangladesh. Anti-infective is the largest therapeutic class of locally produced medicinal products, distantly followed by antacids and anti-ulcerants. Other significant therapeutic classes include non-steroidal anti-inflammatory drug (NSAID), vitamins, central nervous system (CNS) and respiratory products.
Domestic companies account for more than 65% of the pharmaceutical business in Bangladesh. However, among the top 20 companies of Bangladesh 6 are multinationals including GSK, Aventis, Novartis & Roche. Following the Drug (Control) Ordinance of 1982, some of the local pharmaceutical companies improved range and quality of their products considerably. Squire, Beximco, Acme , Incepta, Opsonin, ACI, General Pharma, Ibn Sina are quite strong and enjoy good market share. Squire currently is the no.1 company in the industry and enjoys over 12% market share.
A most remarkable progress the local industry has made in recent time is the phenomenal increase in the local production active pharmaceutical ingredients. There are now nearly 15 drug manufacturing units, which also manufacture certain basic materials. These include Paracetamol, Ampicillin Trihydrate, Amoxycillin Trihydrate, Diclofenac Sodium, Aluminium Hydroxide Dried Gel, Dextrose Monohydrate, Hard Gelatin capsule shell, Chloroquine Phosphate, Propranolol Hydrochloride, Benzoyl Metronidazole, Sodium Stibogluconate (Stibatin) and Pyrantel Pamoate. However, most of these are confined to the last stage of synthesis. Most of the APIs and machinery are sourced from India, China and other European countries.
There are three public sector drug manufacturing units. Two of them are the Dhaka and Bogra units of Essential Drug Company Ltd. (EDCL), which is functioning as a public limited company under the Ministry of Health and Family Welfare. There are separate vaccines and large volume IV fluids production units under the Institute of Public Health (IPH). The productions of both EDCL and IPH are mostly used in government hospitals and institutions.
The healthy growth of the industry supports development of auxiliary industries for producing glass bottles, plastic containers, aluminium collapsible tubes, aluminium PP caps, infusion sets, disposable syringes, and corrugated cartons.
There were around 300 unani, 190 ayurvedic, 100 homoeopathic and biochemic licensed manufacturing units. They produce medicines worth of nearly TK 2 billion.
One of the major positive impacts of Drug (Control) Ordinance is the rapid development of local manufacturing capability. Almost all types of possible dosage forms include tablets, capsules, oral and external liquids (solutions, suspensions, emulsions), ointments, creams, injections (small volume ampoules/dryfill vials/suspensions and large volume IV fluids), and aerosol inhalers are now produced in the country.
In recent years, the country has achieved self-sufficiency in large volume parenterals, some quantities of which are also exported to other countries. The development of local manufacturing capability helped contain dependence on the import of pharmaceutical products (raw material and finished product) around pre-1982 level. Under the Drug (Control) Ordinance government fixes the maximum retail prices (MRP) of more than hundred essential drug chemical substances. Drugs other than these essential ones are priced through a system of indicative prices. This rule applies on the locally manufactured products only. For imported finished products, a fixed percentage of markup is applied on the C&F price to arrive at the MRP, regardless of whether they are within the list of essential molecules or not.
A few of the Indian firms have successfully forayed into the Bangla market. Sun Pharma has started a JV in Bangladesh called Sun Pharmaceutical (Bangladesh) Limited. It has it's own manufacturing facility, marketing set up and distribution network. SPBL has started operation from Mid 2004. SPBL plans to manufacture and market products in three categories: CNS, Cardiology and Gastroenterology. There are two marketing divisions having field strengths of 30 each, covering all important stations and specialists in Bangladesh. Sun Pharma used to export formulations to Bangladesh till 2003.
Besides Sun, the only other company marketing it's products here is Modi-MundiPharma. It's difficult to say why Indian companies avoided this market. One reason possibly is the strong local industry and anticipated stiff competition from them.One unconfirmed source informed that at least two Indian companies are having talks with local companies for JV.
Though Indian companies' presence is not that much visible in formulation business , API is a different story . Most local drug manufacturers are dependent on Indian sources for API, manufacturing machineries and excipients.
Bangladesh pharmaceutical industry is more retail oriented and bulk of distribution is done by the companies themselves. Pharmaceutical companies distribute their products from their own warehouses located in different parts of the country, as no professional distribution house is available. Wholesalers play a limited role in this regard since companies supply goods to both retailers and wholesalers.
Export of pharmaceutical products is still in an infant stage, although a number of private pharmaceutical companies have already entered the export market with their basic materials and finished products. They export their products to Vietnam, Singapore, Myanmar, Bhutan, Nepal, Sri Lanka, Pakistan, Yemen, Oman, Thailand, and some countries of Central Asia and Africa.
The primary responsibility for drug quality control lies with the manufacturers. However, the government's drug testing laboratories (DTL) and the Directorate of Drug Administration (DDA) have the monitoring and supervising role. There are two government drug testing laboratories. DTL at Dhaka is in the Institute of Public Health and the regional DTL at Chittagong is under DDA. Drug administration is responsible for registration of drugs for marketing in Bangladesh and for inspection of premises and licensing. With its present set up and inadequate strength, DDA often finds it difficult to carry out its very large volume of assigned work. Regulatory procedures are like any other country. Bangladesh do not have many fixed-dose combinations approved by DDA. Though some combinations are approved and marketed in recent times, restriction on import is going up as the number of drug companies are increasing significantly.
Restrictions on patent rights discourage foreign investors to come up actively in the pharmaceutical market in Bangladesh. Though, Bangladesh is a signatory of WTO, it has time till 2016 to become TRIPS compliant. Introduction of new research molecules is difficult due to slow registration process and restrictions on patent protection.
Although the fixed mark-up system of pricing helped keep the prices of pharmaceutical products low, this made it difficult to cover costs of marketing and distribution. The fixed mark-up system also discourages some companies to invest for cGMP and assurance of high quality production. Some important therapeutic classes of the pharmaceutical market (antacids and oral vitamins) are only open to the local companies even after 20 years of the drug ordinance.
The annual per capita drug consumption in Bangladesh is one of the lowest in the world. Access to basic healthcare provision remains very poor in Bangladesh, despite the ongoing efforts of the government, aided by considerable international assistance. Adequate secondary or tertiary care is beyond the reach of all but a very few people. Government hospitals are often little more than clinics, and suffer from severe shortages of trained staff. There is a growing private hospital sector, largely based in Dhaka, which is beyond the reach of the majority as they can't afford.
However, with the development of healthcare infrastructure and increase of health awareness and the purchasing capacity of people, this industry is expected to grow at a higher rate in future. Healthy growth is likely to encourage the pharmaceutical companies to introduce newer drugs and newer research products, while at the same time maintaining a healthy competitiveness in respect of the most essential drugs.
Bangladesh's pharma industry is in continuous interaction with its Indian counterparts in developing not only formulations and APIs but seeking guidelines for drug regulation also. This increasing bilateral liaison and trade facilitating pacts amongst the countries in the SAARC region offer tremenendous scope for Indian companies in pharma as well as allied sector companies from India.
Bangladesh is expecting a lot of foreign investments in various industries, the biggest proposal came from TATA in recent times ( $ 2 bn). Cheap labour , availability of qualified and technical personnel and availability of natural gas are factors attractive for foreign investors. According to sources, country is quite keen to develop infrastructure and it's a matter of time that economy will be on upswing. Pharmaceutical industry certainly stands to benefit from that.