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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 thelocal 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.

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Globally, Bangladesh market has demonstrated the highest growth

among all countries in 2010. Whereas Global market and Afro-

Asian 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 torising 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, mostlyusing 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.