Present scenario of pharmaceuticals industry

Like Readymade Garments industry Pharmaceutical is one of the highest priority sectors in Bangladesh. It is technologically the most developed manufacturing sector in Bangladesh and third largest industry in terms of government revenue. There are about 250 registered small, medium, large and multinational pharmaceutical companies (a little over 100 are operating) in the country producing around 97% of the local demand and exporting the rest. It exported worth of 3813.50 taka pharmaceutical products to 83 countries including Europe and America in 2010 (Bangladesh Bureau of Statistics BBS). The export value of pharmaceuticals is growing at a reasonable rate every year. Exports increased from $8.2 million in 2004 to $28.3 million in 2007 and posted further gains last year. According to the United Nations, 48 countries are classified as LDCs, of which 31 are members of the WTO. Out of 31 LDCs, only Bangladesh has adequate pharmaceutical manufacturing capability and it is nearly self-sufficient. According to Bangladesh Pharmaceuticals and Healthcare Report Q1 2012, Bangladesh is in the 15th position of the 18 markets in the Asia-Pacific region. Bangladesh's pharmaceutical rating is 41.3 out of 100, which is substantially lower than the average of 53.7 of the region. Bangladesh is now below Pakistan and above Sri Lanka in matrix ratings. According to Bangladesh Pharmaceuticals and Healthcare Report Q1 2011, Bangladesh medicine sales reached Tk. 70 billion in 2010, the growth trend would take the sales to Tk. 90 billion in 2011 and globally Bangladesh would hold the 67th in Business Monitor International's (BMI) 83 market-strong pharmaceutical worlds. Beginning in the 1950s, when a few multinationals and local entrepreneurs set up manufacturing facilities in the then East Pakistan, now there are about 250 firms. It is a fragmented industry but dominated by few large companies. Top 20 companies produce 85% of total revenue in which top 10 produce 68% of total revenue and top 2 produce 25% of total revenue. On the other hand over 115 companies are producing only 5% of total revenue. Based on the IMS report for the fourth quarter 2011, Square Pharmaceuticals (DSE: SQURPHARMA) holds the top market share in the retail market - 18.7%, followed by Incepta Pharmaceuticals (INCEPTA) 9.3%, Beximco Pharmaceuticals (DSE: BXPHARMA) 8.8%, Opsonin Pharma (OPSONIN) 5.1% and Renata (DSE: RENATA) 4.9%. The top five companies held 46.8% market share in 2011. There are three drug manufacturing units under control of the Government of Bangladesh. Two of them are in Dhaka and another one is in Bogra. The name of these units is Essential Drug Company Ltd. (EDCL), which is operating as a public limited company under the Ministry of Health and Family Welfare.

Globally, Bangladesh market has demonstrated the highest growth among all countries in 2010. Whereas Global market and AfroAsian market is growing at a rate of 6.70% and 15.70% only, our country is demonstrating an annualized growth of 24.58%. As a result of such significant growth along with a consistent economic growth of around 6%, recently Bangladesh was included on the Goldman Sachs "Next Eleven" list as well as the JP Morgan "Frontier Five". As per their observation, Bangladesh represents significant potentials to become an important global manufacturer of pharmaceuticals, joining China, India, Brazil and Russia. (Source: IMS)

Being part of health care sector, domestic market size of pharmaceuticals has a direct relationship with economic variables, such as population growth, healthcare expenditure, income level etc. In Bangladesh, the industry has been experiencing a good growth over the last few years. The growth is attributable to rising population with increasing healthcare expenditure per capita. Noticeably, the increase in healthcare expenditure is due to higher level of private pending, demonstrating rising health awareness among the people. As demographic variables improve over the coming years, the industry is expected to continue its growth at least up to the implementation of TRIPS [2016 expected]. However, the growth is not expected to be uniform across the market due to differences among the segments.

Bangladesh pharmaceutical companied focus primarily on branded generic final formulations, mostly using imported APIs (Active Pharmaceuticals Ingredient). About 85% of the drugs sold in Bangladesh are generics and 15% are patented drugs - the structure differs significantly from the international market. Bangladesh manufactures about 450 generic drugs for 5,300 registered brands which have 8,300 different forms of dosages and strengths. These include a wide range of products from anti-ulcerants, flouroquinolones, anti-rheumatic non-steroid drugs, non-narcotic analgesics, antihistamines, and oral anti-diabetic drugs. Some larger firms have also started producing anti-cancer and anti-retroviral drugs. Domestic manufacturers account for 97% of the drug sales in the local market while the remaining 3% are imported.