Bangladesh’s pharmaceutical industry, which has long been regarded as one of the key sectors driving the country’s economic growth, is now facing increasing challenges in reducing drug prices and capturing a larger share of international export markets. The primary concern lies in the country’s continued reliance on the importation of active pharmaceutical ingredients (APIs), which are essential for the manufacturing of medicines. While the local industry produces some APIs, around 90% of the necessary raw materials are still imported, largely from China and India.
In a recent workshop organized by the Bangladesh Pharmaceutical Industry Association (BPIA) at its office in Tejgaon, Dhaka, key stakeholders discussed the obstacles hindering the sector’s progress. Experts highlighted how reducing drug prices in the domestic market and achieving greater success in foreign markets have become increasingly difficult due to the country’s dependence on imported APIs, complex regulatory approvals, and intense competition from international companies.
Key Issues Facing Bangladesh’s Pharmaceutical Industry: The pharmaceutical industry in Bangladesh is largely dependent on raw materials, or APIs, to produce finished medicines. It is estimated that 400 types of APIs are required to manufacture a variety of drugs, out of which only 41 types are currently produced domestically. A total of 21 companies in Bangladesh are engaged in the manufacturing of these raw materials. This means that nearly 90% of the raw materials needed for drug production are still imported, making the industry heavily reliant on foreign suppliers.
In the workshop, Dr. Md. Zakir Hossain, Managing Director of Delta Pharma, explained the challenges involved in API production. He stated that it takes over six months to obtain the necessary approvals from 49 different organizations required for producing raw materials for medicines. Additionally, although a significant amount of raw material is required to meet production targets-around 500 tons-only 100 tons are typically approved for import, further straining the industry’s capabilities.
"We are facing a bottleneck at every stage," Dr. Hossain explained. "Approval processes are cumbersome, and we are often limited by import quotas. In the current environment, it is virtually impossible to compete with countries like China and India, who have far more established and efficient systems for API production."
Moreover, the high cost of specialized machinery required to manufacture APIs, coupled with a lack of adequate space for production, makes it difficult for companies to scale up. Dr. Hossain cited the example of the pharmaceutical industry park in Gazaria, Munshiganj, which was allocated 200 acres of land 18 years ago to establish an API production facility. However, the park has not been able to develop as initially planned. "The Chinese experts who visited the site questioned how raw materials could be produced in such a small area. While a Chinese factory may cover 550 acres, we are struggling to make progress with just 200 acres," he said.
Land and Regulatory Challenges: The current infrastructure and land allocation issues continue to plague the API production sector. Despite receiving 42 plots in the pharmaceutical industry park in Gazaria, only 15 companies have started production. Dr. Hossain further emphasized that the lack of a unified approach by the government in resolving regulatory issues makes it difficult to streamline the approval process.
"There was a proposal to bring all the required services under one umbrella, but unfortunately, the government has not yet implemented it," he added. This inefficiency and fragmentation in the approval process further delay the establishment of API manufacturing units and restricts growth in this vital sector.
Furthermore, the pharmaceutical industry in Bangladesh faces competition from foreign suppliers who often sell APIs at high prices, making it even more challenging for local manufacturers to stay competitive. Many pharmaceutical companies in Bangladesh, especially those involved in API production, are struggling to keep up with the pricing strategies of their counterparts in China and India.
The Consequences of Dependency on Imported APIs: Bangladesh’s dependence on imported APIs has serious implications for both the local market and its ambitions to capture a larger share of the global pharmaceutical export market. As the country is set to graduate from a Least Developed Country (LDC) status to a middle-income nation, several trade preferences and exemptions that currently benefit the industry will no longer be available. These include tax exemptions and favorable tariffs, which have helped local companies maintain low costs for APIs and keep drug prices affordable.
M. Mohibuzzaman, CEO of ACI Healthcare, highlighted this looming issue: "As we move toward middle-income status, the LDC benefits will phase out. This will result in higher costs for APIs, and we will have to buy them from major suppliers at market prices. This will increase the cost of production, and consequently, the price of medicines will rise."
The transition to middle-income status will place additional pressure on the industry to reduce its dependency on foreign APIs and develop local production capabilities. If this does not happen, Bangladesh’s pharmaceutical sector could face significant challenges in maintaining competitive pricing in both domestic and international markets.
Increasing Competition in the Export Market: One of the primary goals of the pharmaceutical industry in Bangladesh has been to capture a larger share of global markets. Over the years, the industry has made significant progress, with Bangladesh becoming one of the top exporters of generic medicines. However, as Muhammad Halimuzzaman, CEO of Healthcare Pharmaceuticals, pointed out at the workshop, the country is facing increased competition from other nations, particularly in foreign markets.
"Due to our lack of API production, we are finding it increasingly difficult to compete with companies from other countries in the global market," Halimuzzaman stated. He emphasized that foreign pharmaceutical companies that produce their own APIs have a distinct advantage, as they can ensure a stable supply of raw materials and control costs more effectively.
The issue of API production is compounded by the fact that countries like China and India not only dominate the global API market but also possess the necessary infrastructure, technology, and cost efficiencies to produce and export these raw materials at competitive prices. As a result, Bangladesh’s pharmaceutical companies are forced to rely on these countries for essential ingredients, which limits their ability to offer competitive prices on the international stage.
Looking to the Future: The Need for Change: Despite the many challenges facing Bangladesh’s pharmaceutical industry, stakeholders remain hopeful that with the right support from the government, the sector can overcome its obstacles and continue to thrive. However, this will require significant investment in the development of API production capabilities within the country, as well as the establishment of more efficient systems for regulatory approval and infrastructure development.
Dr. Hossain stressed the importance of improving API production within Bangladesh. "Until we can solve the issues surrounding raw material production and create a competitive environment, we will struggle to lower drug prices and capture more of the export market," he said.
There is a consensus among industry leaders that the government must take a more proactive role in facilitating the growth of API production in Bangladesh. This could involve offering more financial incentives, streamlining regulatory processes, and improving the infrastructure available for API manufacturing.
The pharmaceutical industry in Bangladesh is at a critical juncture. While it has made remarkable strides in producing high-quality generic medicines and meeting the domestic demand for affordable healthcare, it faces significant challenges in reducing drug prices and expanding its export market. The country’s dependence on imported APIs is one of the biggest hurdles in achieving these goals. Without a concerted effort to invest in local API production, streamline regulatory processes, and improve infrastructure, the pharmaceutical sector may struggle to maintain its competitive edge in both domestic and international markets.
As Bangladesh continues its transition to a middle-income country, the need to focus on API production has never been more urgent. Industry leaders agree that only by reducing reliance on imported raw materials can the pharmaceutical industry ensure the long-term sustainability of affordable medicines for its population and capture a larger share of the global pharmaceutical market.
