Novel way of duty evasion

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FE Report
About a dozen small pharmaceutical factories across the country are doing brisk business by importing raw materials under 'block list' and sell those to other factories, instead of producing medicines. Import of pharmaceutical raw materials under 'block list' is exempted from duties.
This trade helps the companies evade a large amount of import duty and scales up risk of importing improper active ingredients at low prices.
According to the rules of Drug Administration no factories are allowed to import raw materials if they do not manufacture drugs.
When asked, a high official of the Directorate of Drug Administration told the FE that the Drug Administration recently carried out a survey and categorized factories from A to F to identify non-manufacturing companies.
"After final investigation, we will cancel import permits of those companies who are involved in the illegal trade," the official added.
Spurious drugs, prepared from those low quality and adulterated raw materials, pose a serious public health risk, the official added.
Another official of the Drug Administration said that different mobile courts carried out operations and found some of those companies manufacture spurious drugs.
Drug Administration sources said these companies import raw materials like Azithromycin, Cephradine, Ciprofloxacin, Pantoprazole and Omeprazole to make tablets, capsules, injectibles, liquids, suspensions, sustained release dosages, dry powder, metered dose inhalers, creams and ointments.
The export value of pharmaceuticals is growing at a rate of 50 per cent per year, reaching about $100 million in fiscal year (FY) 2010-11.
At present, Bangladesh imports 80 per cent of its pharmaceutical raw materials. Apart from the low grade raw materials, most of the factories do not have 'bioequivalence study,' validation report, clinical trials and manufacturing plant audit mechanisms.
Out of the 230 companies, 200 run their own manufacturing facilities, out of which five are multinationals.
Now approximately 97 per cent of the domestic demand of medicines are met by the local companies.
A good number of Bangladeshi companies have won accreditation for export from the regulatory authorities in some developed countries.