Affordable medicines in Bangladesh in post TRIPS regime
The challenges posed by TRIPS compliance and the need for affordable drugs require strategic planning and proactive measures from the government and industry stakeholders
In the last few decades, the pharmaceutical industry in Bangladesh has undergone a remarkable transformation, evolving from a sector dominated by multinational companies (MNCs) to one led by local firms. This shift has not only made healthcare more accessible to the nation's population, but has also turned the country into a significant player in the global pharmaceutical market.
Back in the 1970s, eight MNCs held the reins, supplying a whopping 75% of all manufactured drugs in the country. Fast forward to the present day, and the transformation is evident. Approximately 273 local firms now meet a staggering 98% of Bangladesh's drug requirements. This tremendous growth has earned the pharmaceutical industry its status as the largest white-collar employer in the country, providing valuable job opportunities to its people.
Furthermore, the industry has proven to be a significant contributor to the nation's economy, ranking as the second-largest taxpayer. Its contribution to the national GDP stands at an impressive 1.83%, showcasing its importance in bolstering the country's financial strength.
Bangladeshi pharmaceuticals have also found their way onto the global stage, exporting drugs to 147 countries, including 31 other Least Developed Countries (LDCs). This has helped the country earn export earnings of approximately US$136 million annually, solidifying its position as a noteworthy player in the international pharmaceutical market.
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Despite this growth, the journey has not been without its challenges. Compliance with the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement has emerged as a key concern for the industry.
As a member of the World Trade Organization (WTO), Bangladesh is required to make pharmaceutical patents available for a minimum of twenty years. Initially classified as an LDC, the country received an extension until 2033 to comply with TRIPS.
However, with an expected reclassification as a developing country in 2026, the compliance deadline was brought forward to 2029 for Bangladesh, leaving the nation with a mere eight years to establish an Intellectual Property Rights (IPR) regime.
The compliance deadline has raised questions about the potential consequences for the pharmaceutical industry in Bangladesh. One major concern is the country's dependence on India and China for Active Pharmaceutical Ingredients (APIs). Compliance with TRIPS may impact the availability and affordability of APIs, affecting the production of medicines locally.
Another worry is the impact on the domestic generics industry. Patents for pharmaceutical products could hinder the growth of Bangladesh's generics industry, potentially limiting access to affordable medicines for the local population.
Furthermore, there are fears that TRIPS compliance might lead to the resurgence of MNC monopoly power in the pharmaceutical sector. This could result in reduced competition, impacting the affordability of drugs for the citizens of Bangladesh.
The need for affordable drugs is critical in Bangladesh. A significant 44% of health service costs in the country are attributed to medicinal expenses, compared to the global average of 15%. This staggering figure places a heavy burden on households and individuals, especially those facing catastrophic health expenditure (CHE) due to the high costs of medical services.
A recent study titled "Disease-specific distress healthcare financing and catastrophic out-of-pocket expenditure for hospitalisation in Bangladesh" revealed that 26% of households in the country incurred catastrophic health expenditure on hospitalisation in the past couple of years. The highest incidence of CHE was seen in cases of cancer, liver diseases and paralysis.
Out-of-pocket (OoP) spending in Bangladesh far exceeds the global average, accounting for a staggering 67% of total health expenditure. Medicines represent the largest portion (67%) of Bangladesh's OoP expenses. Despite having the lowest drug prices globally, they remain unaffordable for one-fifth of the population.
To address these challenges and ensure access to affordable medicines for its citizens, Bangladesh must prioritise investments in the production of its own Active Pharmaceutical Ingredients (APIs). The establishment of API industrial parks, modelled after India and China's success, could help reduce dependence on imports.
Simultaneously, the country should focus on implementing an efficient universal health coverage policy that includes medicine costs. This would facilitate the availability of newer and more effective drugs, benefiting the entire population.
The government also needs to fulfil its commitments, such as the Health Care Financing Strategy (2012-2032), to strengthen the healthcare system in Bangladesh. The implementation of a universal health insurance system could enhance access to healthcare services and provide much-needed financial protection for the population.
Furthermore, measures should be taken to eliminate corruption in the health sector. Installing a Government Resource Planning system and utilising customised software-based Enterprise Resource Planning, could help monitor and control corruption in the supply of medicines.
To ensure long-term growth and self-reliance in the pharmaceutical sector, Bangladesh must make significant investments in research and development (R&D). Establishing research collaborations between universities and private companies will foster innovation and drive the development of new drugs. By focusing on R&D, Bangladesh can work towards creating its own patented medicines, reducing its dependency on imported pharmaceutical products.
With approximately eight years remaining before the TRIPS compliance deadline in 2029, Bangladesh should seize this opportunity to strengthen its research capabilities and build a robust pipeline of innovative medicines. By nurturing a collaborative environment between academia and the private sector, the nation can leverage diverse expertise and resources to accelerate drug development.
Moreover, lobbying efforts to increase the TRIPS waiver until at least 2033, as originally decided for all Least Developed Countries (LDCs), should be pursued. Extending the waiver period will provide Bangladesh with more time to establish a robust Intellectual Property Rights (IPR) regime and navigate the challenges posed by TRIPS compliance. A united effort involving the government and industry stakeholders is crucial to advocate for an extension and safeguard the interests of the local pharmaceutical industry.
The pharmaceutical industry in Bangladesh has come a long way, transforming into a powerful force in the national and global markets. However, the challenges posed by TRIPS compliance and the need for affordable drugs require strategic planning and proactive measures from the government and industry stakeholders.
By investing in API production, implementing universal health coverage, and combating corruption, Bangladesh can pave the path to self-reliance in the pharmaceutical sector and improve healthcare accessibility for its citizens.
Md Mujibul Haque Munir is the Joint Director of the COAST Foundation and a member of the Steering Committee of the UN Global Farmers Forum.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
