Keeping the Bangladeshi pharma industry robust post-LDC graduation

Bangladesh needs to try and build capacities to exploit the benefits of the transition period of the graduation out of the least developed countries category as much as possible in order to further develop its pharmaceutical industry

Pharmaceuticals are one of the leading export potential sectors with a capacity to meet about 98% local demand, the domestic market of which is about $3.5 billion. Export in FY22 was $188.8 million and was received by several developed, developing, and least developed countries (LDCs).

Bangladesh, however, imports huge amounts of raw materials and chemicals, for example about $1.050 billion in 2020-21, mostly from developing countries such as China, India, Korea, Singapore, and Malaysia. 

Share in the foreign direct investment stock of Pharmaceuticals and chemicals (as of 31 Dec 2021) is not very high, only 1.94% of total foreign direct investment, of which United Kingdom (40.6%), India (7.1 %),Netherlands (5.7%) are important. In order to see better technological transfer, more foreign direct investment is needed.

With the graduation of Bangladesh to a developing country, we need to follow the growth path of developing countries which have been successful, despite the vast differences in our respective histories. 

Exceptions and flexibilities in the World Trade Organisation's Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement and special and differential treatment for developing countries need to be exploited.

Bangladesh mostly produces off-patent generics (about 80%) and a portion of on-patent medicines (but patented elsewhere), mostly over the counter products, that is, non-prescription medicines or medicinal preparation. 

Available information shows that drugs worth more than $150 billion are coming off-patent by 2021, and another $250 billion worth by 2023. Bangladesh can grab the opportunities for further investment in generic drugs. 

Now it is high time to take the right policy measures, strategies, and action plan for keeping growth intact after LDC graduation. Also, the government needs to ensure robust negotiating efforts to enjoy  waiver for an additional period in its post-graduation phase.

As per Article 66.1 of the TRIPS Agreement, any LDC may submit a duly motivated request to the TRIPS Council for further extension of the transition period. 

A proposal was floated by the LDCs in December 2020, keeping in the purview the extension of LDC-specific International Support Measures for 12 years, which was subsequently brought down to 6-9 years. 

However, MC12 in Geneva failed to address the concerns of the graduating LDCs, even though it is not included in the Outcome Document.

The MC12 Outcome Document acknowledged the particular challenges that graduating LDCs are going to face because of loss of trade-related ISMs. Bangladesh can also try for a country specific waiver, highlighting, among other things, the issues of affordability and public health and the loss of 2-3 years because of the Covid-19 pandemic.

A recent meeting on these issues put emphasis on even considering engagement of third party lobbyists in Geneva so that Bangladesh can capture available benefits and flexibilities of TRIPS agreement. 

Engaging lobbyists will be very costly, however, and it is expected that at any cost Bangladesh will make all out efforts to sustain growth in this sector.

We need to not only produce dosage forms, but we also need to move into manufacturing biosimilar products for which the Directorate General of Drug Administration needs to revisit the guidelines, aligning with the UK's Medicines and Healthcare products Regulatory Agency and the World Health Organisation. 

Good news is that stringent conditionalities for biosimilar products have been relaxed, and the EU and World Health Organisation regulations and guidelines have been vastly simplified.

The US's Food and Drug Administration has approved 446 novel drugs in the US from 2012-2022. The Bangladesh Association of Pharmaceutical Industries is following the list, which will be continuously updated up to 2026. 

Bangladesh will need to introduce as many products in the local market so these products are exempted from patents. Bangladesh can follow the examples of patent acts of other developing countries, such as India.

We need to build up the facility for active pharmaceutical ingredient (API) manufacturing to reduce dependency on imported APIs. So far, 27 companies have obtained plots in the API park. The companies are building their finished formulation manufacturing capacities, which includes both small molecules, synthetic drugs, and complex biologics vaccines. 

The API park needs gas connection immediately, as well as properly functioning common effluent treatment plants. Bangladesh can also try for potential API markets other than Western regulated markets. There are countries which have large formulation bases but no API, such as Indonesia, Pakistan, Egypt, and Kenya. Export of API to these countries will be possible if the API park can start working properly.

Bangladeshi firms are facing challenges in importing chemicals which are not produced in the country. Right of priority is another technical need. Bangladesh is also in need of skilled labourers, especially synthetic organic chemists. Concerned private and public universities can help in that respect. 

It should be clearly written in the law that patent applications that have a priority date on or after 24 November 2026 will be eligible for patent protection. India, in its 1999 patent law, utilised the transition period (following Article 65 of the TRIPS agreement). Bangladesh should take all efforts to utilise its transition period and also work sincerely for extension of the transition period. 

Until graduation we will avail all benefits of TRIPS exemption and in that respect, MailBox may be closed with immediate effect. This issue has to be reflected in the 2022 patent act. 

Any new molecule that comes after 2026 will need a patent before flexibility will be availed by the country. Compulsory licensing in national emergencies (see Article 21 of the 2022 patent act) has been included. 

There should be rules so that the process is clearer. We will need to include as much as provisions (with explanations in the rule) so that full flexibilities of TRIPS can be exploited.

Utility model laws have been covered in the new patent law and a separate law for small inventions could be prepared. However, there could be separate rules for the utility model issues. PCT registration  can be delayed since so far we do not have enough invention. 

Bangladesh can also avail some benefits of parallel import. However, it needs to be included in the customs act. 

Ever-greening of patents is another issue. For lifetime patents, provision can be included.  There are cases of patent revocation or surrender that can be utilised by a country. However, it should be supported by law. 

We need to try and build capacities to exploit these benefits as much as possible within this transition period.

Ferdous Ara Begum is the CEO of Business Initiative Leading Development (Build)

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.