What Bangladesh can do to become the global hub of generic drugs
Bangladesh has the potential to meet the world’s demand for price-competitive, high-quality generics. But there are some challenges that prevent us from doing so
The exponentially growing pharmaceutical industry has a significant role in the overall global economy. This $1.5 trillion industry holds around 10% of the worldwide health economy. In terms of product category, the pharmaceutical industry is basically divided into two classes: one is innovative and the other is generic, with an individual share of 56% and 44%, respectively.
The innovative products market is mostly controlled by the developed world as it is embedded in advanced research and technology, which are highly expensive. On the other hand, a few developing countries are doing exceptionally well in generic markets by offering quality products at affordable prices. Generics are the true copy of the innovator after patent expiration, and it involves little basic research. These are also easy to offer, as the molecule is already established by the innovator.
Global sales from worldwide exports of drugs and medicines totalled $426.8 billion last year, where Germany, Switzerland, the US, Belgium and Ireland were unparalleled with their innovative product exports. On the other hand, India, China, Mexico, South Korea, Singapore, Israel, Turkey, and Bangladesh had a significant presence in generic exports.
As an emerging country, Bangladesh is increasing its share in pharmaceutical export and currently ranks 67th in the global pharma export market. It is also encouraging that during the last six years, the annual export volume has almost doubled, with a current volume of around $190 million per year.
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However, given the global demand, we have an enormous opportunity to be the generic hub of the global pharmaceutical industry. The world is looking for price-competitive, high-quality generics.
We are highly price-competitive and efficient in manufacturing. Therefore, to support as well as strengthen the ongoing export activities, we need to address the following issues:
1. Attention towards regulated markets: India and China are the world's largest generic pharmaceutical exporters, having more than 700 and 600 US FDA-compliant facilities, respectively. These two countries are progressively becoming the leading US sources for generic pharmaceuticals, which account for 90% of all prescriptions.
Currently, India is one of the five major exporters of pharmaceuticals to the US market, with a value of about $10 billion in goods, accounting for almost 6% of the total US pharmaceutical imports.
Also, 55% of India's pharma exports go to regulated markets. China has also increased its share in recent years. In 2021, the US imported around $6 billion worth of pharmaceuticals from China, which has simply doubled within the last five years.
However, in the case of Bangladesh, the number of pharma facilities to export to regulated markets is less than ten, and their export volume to the US is around $15 million. It is worth mentioning that regulated markets include the US, UK, Australia, Canada, etc. and few Bangladeshi companies are already exporting over there.
It is clear that we need to target the regulated market for a large volume of exports, as 60% of the total pharmaceutical imports are done by nine regulated countries. Therefore, increasing our USFDA and other strict regulatory-compliant facilities is important.
2. Arrangement of own Active Pharmaceutical Ingredients (API): In generic pharmaceutical exports, price competitiveness is the second most important issue after quality. API is one of the key determinants of being price competitive—unfortunately, Bangladesh imports around 95% of the APIs, mostly from India and China.
In the global market, we compete with India and China and import API from them; therefore, it is really tough to be price competitive. However, comparatively cheap labour and API Park at Gazaraia, Munshigonj, are our two hopes. In order to expand our export market, we need to start manufacturing selected APIs on our own.
3. Setting up bioequivalence testing facilities: For exporting pharmaceuticals, bioequivalence studies is almost common; however, we have very few scopes to conduct bioequivalence studies in Bangladesh.
To arrange bioequivalence studies, we have to depend on India, Malaysia and a few other countries, which involve both cost and time. Hence, we need to establish a dedicated bioequivalence facility through direct government patronage.
In this connection, the Pharmacy Department of Dhaka University, Bangabandhu Sheikh Mujib Medical University (BSMMU), International Centre for Diarrhoeal Disease Research, Bangladesh (ICDDR,B), Bangladesh Council of Scientific and Industrial Research (BCSIR), National Institute of Biotechnology (NIBT) and Directorate General of Drug Administration (DGDA) can play a significant role from their positions.
4. Government support in the product registration process: Product registration is a critical and mandatory issue for exporting pharmaceuticals. Product registration involves non-refundable registration costs and long waiting times. Also, in many cases, representatives from importing countries visit the production facilities. Therefore, managing all these things is difficult for small and medium-sized companies.
It would be convenient if the government supports the registration process through different schemes. The Indian government arranges financial assistance through Pharmexcil (Pharmaceutical Export Promotion Council) under Market Development Assistance and Market Access Initiative Schemes to exporters of pharmaceutical products, particularly small and medium-size exporters, to promote their exports in various countries.
5. Assistance in getting the right distributors in importing countries: Nowadays, getting the right distributor in the importing countries is important, as multidimensional issues include liaisons with local regulatory bodies and medical professionals. The diplomatic missions of Bangladesh in the concerned countries and different international organisations can assist in getting the appropriate distributor.
6. Collaboration with the global giants: In this age of evolving science, collaboration with the global giants is of utmost priority for Bangladeshi companies to improve their capacity in research, development and other critical manufacturing arenas. This may also create opportunities for the local production of Multinational Companies' (MNCs) products for the global market. Notably, Bangladesh is in an advantageous position with competitive labour and other utility costs, compared to its rivals.
7. Development of biologics manufacturing facilities: Biologic products currently represent more than 20% of the global pharmaceutical market. This segment is enjoying continuous double-digit growth, which is more than two times the conventional chemical molecules' growth. Unfortunately, very few Bangladeshi companies are involved with biologics manufacturing and our biologic products' market share is below 5%. If insulin is excluded, this share will be very insignificant.
Therefore, considering the global demand for biologics, we need to develop a greater number of biologics manufacturing facilities. India and China are highly involved in biologics manufacturing through reverse engineering processes. It is good news that two to three Bangladeshi companies have started basic work with biologics manufacturing.
8. Facilitating currency transfer: For global pharmaceutical business operations, currency transfer is an important issue as product registration, office setup and maintenance, salary of the employees, marketing investment, promotional activities and other expenditures are involved. However, our central bank has set a limit for maximum remittances in each year, which is inadequate and needs to be increased.
9. Preparation for LDC (Least Developed Countries) graduation: Bangladesh is a role model in generic pharmaceuticals among LDCs. Being one of the LDCs, we enjoyed the patent waiver, which supported us in many ways, especially in new product launches. We already graduated from the LDCs on November 24, 2021; hence, this special waiver may be inapplicable after November 24, 2026. Therefore, we need to reset the export basket with off-patented drugs. Otherwise, the volume may drop sharply instead of rising.
10. Strengthening country image: For pharmaceutical export, country image is very crucial as it directly involves human health. It is encouraging that our image with pharmaceuticals is comparatively better and has the scope to improve. Our foreign missions, important personalities, different delegates, and diplomatic missions in Bangladesh can play significant roles here.
Dr Md. Abu Zafor Sadek Assistant General Manager, UniMed UniHealth Pharmaceuticals, Adjunct Faculty, Canadian University of Bangladesh and former short-term Consultant, The World Bank
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.
