API Park to give pharma industry a major boost
Shahiduzzaman Khan | Sunday, 1 June 2008
Of late, the government's highest planning body, the executive committee of the national economic council (ECNEC), gave green signal to the Active Pharmaceutical Ingredient (API) Park in Munshiganj recently at an overall project cost of Tk 2.13 billion. With the approval, the country's pharmaceutical sector is all set to woo a Tk 20 billion in fresh investment.
As the government has finally cleared the way for the country's first hub for medicine raw materials, a long standing demand of the fast growing pharmaceutical sector has been fulfilled. Local pharmaceutical sector produces some 90 per cent of the country's total medicine need but import most of the raw materials from India, China, Italy and Germany.
The proposed API Park is expected to inject a fresh momentum in the medicine industry. President of the Bangladesh Association of Pharmaceutical Industries (BAPI) FM Shafiuzzaman said the decision has fulfilled a decade long demand for a medicine raw materials hub. Already a huge investment portfolio has been lined up for investment in the API Park.
Bangladesh's more than 100 pharmaceutical plants imported medicine raw materials worth Tk 15 billion last year. The country can save at least 70 per cent of the amount by producing raw materials at the API Park. The industry produced medicines worth Tk 50.00 billion last year, with the market growing over 12 per cent annually over the last half a decade. The industry also exported drugs worth a record $32 million in the first nine months of the fiscal, posting a massive 60 per cent growth over the same period last fiscal.
The park is scheduled to transform the drug industry as a major export earner. The country will be benefited immensely if the park is set up as quickly as possible as Bangladesh is now enjoying a special benefit to export drugs to all over the world under a World Trade Organisation (WTO) deal. The WTO's Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement signed in 2002 has allowed all the least developed countries (LDCs) to export patent-free drugs to anywhere in the world between 2006 and 2016. Among the 49 LDCs, Bangladesh has the strongest base to manufacture pharmaceutical products, although the country hardly has any raw material production facilities.
Bangladesh Small and Cottage Industries Corporation (BSCIC) has been assigned to set up the proposed park. The project is expected to be completed by 2011. The corporation will develop the infrastructure with state-of-the-art facilities including a central effluent treatment plant (ETP) and incinerator for solid and liquid wastes management. After completion of infrastructure development, a total of 40 industrial plots will be allocated to individual companies for setting up API plants. The park will be operated through a public-private partnership.
A total of 30 drug companies have already applied for plots at the API park. They have the money ready to establish plants. The companies will start producing APIs within six months after the government hands over the plots to them. It is really impossible to be competitive in the international medicine market if a company doesn't produce its own raw materials. Bangladeshi companies need to invest in a big way in API Park if they want to have a big slice of the export pie. The country has a total of 164 companies with the top ten controlling more than 70 per cent of the market. Another 68 companies have been registered with the Board of Investment (BoI) but haven't started operation.
The government several years back agreed to set up an API Park when approached by the leaders of the Bangladesh Association of Pharmaceutical Industries (BAPI). The BAPI explained to the government leaders the importance of having a park as early as possible to help the country in a big way in exploiting the opportunity offered to it through the waiver of certain provisions of the WTO Agreement on TRIPS and Public Health for the least developed countries (LDCs). Under the waiver facility, an LDC is allowed to export patented drugs without any limit to other LDCs having no or inadequate drug manufacturing facilities until January 1, 2016.
The Council for TRIPs took a decision on June 2, 2003 to this effect in accordance with the recommendations of the WTO's Doha Ministerial held in 2001. Since then, the local pharmaceutical manufacturers have been trying to convince the administration to do the needful, including the establishment of an API park, to help the country to make the best use of the exemption. But five years have gone by with the government making promises after promises in this respect in spite of the fact that Bangladesh is positioned uniquely among all the LDCs so far as pharmaceutical sector is concerned. Among the LDCs, it has the best drug manufacturing facilities with huge export potentials. With annual average growth rate of about 10 per cent, country's pharmaceutical industry is not far away from achieving self-sufficiency in meeting the local demand.
Local pharmaceutical companies are enjoying a market share of more than 80 per cent while the multi-nationals 20 per cent. Some of the leading local pharmaceutical companies have set up state-of-the-art manufacturing facilities. What has made Bangladesh as one of the leading drug manufacturers among the LDCs and in South Asia is its very strong finished formulation-manufacturing base. Bangladesh began small-scale export of drugs and medicines back in the late 80s. At least two local manufacturers took initiatives on their own to export pharmaceutical products to some less-regulated overseas markets like neighbouring Myanmar, Nepal and Sri Lanka in the absence of any official support and incentives.
In the early 90s, a few more companies joined the race and Bangladesh could make inroads in some of the partially regulated markets, including Russia, Ukraine, Georgia and Singapore. The success in entering these markets was viewed as a major breakthrough for the Bangladesh pharmaceutical industry. Since then the export of pharmaceutical products has been rising. However, the rate of growth of exports has been well below the actual potentials. The absence of an API park to a large extent is holding the country back from making pharmaceutical exports to its full potentials.
After coming to power, the present caretaker administration took up the API issue and decided to get the job done as soon as possible The government held a meeting with a World Bank (WB) mission to get funds from the Bank to set up the park at an estimated cost of Tk. 4.52 billion on 300 acres of land in Munshiganj district. The WB mission has agreed to provide necessary funds only after the completion of a study on social and environmental aspects of the project. Another development partner -- the Department for International Development (DFID) of UK -- has agreed to in principle conduct the study.
With the ECNEC approval, it is expected that all concerned do need to develop an effective partnership to get the API park project implemented within a shortest possible time to help the country avail itself of the opportunity offered through the exemption of patent regulations under the TRIPS. In addition to getting all the production facilities geared up, the local pharmaceutical industry should bolster its efforts for exploring newer markets, particularly in Africa and Latin America -- where a large number of developing countries and LDCs have scanty drug manufacturing facilities.
As the government has finally cleared the way for the country's first hub for medicine raw materials, a long standing demand of the fast growing pharmaceutical sector has been fulfilled. Local pharmaceutical sector produces some 90 per cent of the country's total medicine need but import most of the raw materials from India, China, Italy and Germany.
The proposed API Park is expected to inject a fresh momentum in the medicine industry. President of the Bangladesh Association of Pharmaceutical Industries (BAPI) FM Shafiuzzaman said the decision has fulfilled a decade long demand for a medicine raw materials hub. Already a huge investment portfolio has been lined up for investment in the API Park.
Bangladesh's more than 100 pharmaceutical plants imported medicine raw materials worth Tk 15 billion last year. The country can save at least 70 per cent of the amount by producing raw materials at the API Park. The industry produced medicines worth Tk 50.00 billion last year, with the market growing over 12 per cent annually over the last half a decade. The industry also exported drugs worth a record $32 million in the first nine months of the fiscal, posting a massive 60 per cent growth over the same period last fiscal.
The park is scheduled to transform the drug industry as a major export earner. The country will be benefited immensely if the park is set up as quickly as possible as Bangladesh is now enjoying a special benefit to export drugs to all over the world under a World Trade Organisation (WTO) deal. The WTO's Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement signed in 2002 has allowed all the least developed countries (LDCs) to export patent-free drugs to anywhere in the world between 2006 and 2016. Among the 49 LDCs, Bangladesh has the strongest base to manufacture pharmaceutical products, although the country hardly has any raw material production facilities.
Bangladesh Small and Cottage Industries Corporation (BSCIC) has been assigned to set up the proposed park. The project is expected to be completed by 2011. The corporation will develop the infrastructure with state-of-the-art facilities including a central effluent treatment plant (ETP) and incinerator for solid and liquid wastes management. After completion of infrastructure development, a total of 40 industrial plots will be allocated to individual companies for setting up API plants. The park will be operated through a public-private partnership.
A total of 30 drug companies have already applied for plots at the API park. They have the money ready to establish plants. The companies will start producing APIs within six months after the government hands over the plots to them. It is really impossible to be competitive in the international medicine market if a company doesn't produce its own raw materials. Bangladeshi companies need to invest in a big way in API Park if they want to have a big slice of the export pie. The country has a total of 164 companies with the top ten controlling more than 70 per cent of the market. Another 68 companies have been registered with the Board of Investment (BoI) but haven't started operation.
The government several years back agreed to set up an API Park when approached by the leaders of the Bangladesh Association of Pharmaceutical Industries (BAPI). The BAPI explained to the government leaders the importance of having a park as early as possible to help the country in a big way in exploiting the opportunity offered to it through the waiver of certain provisions of the WTO Agreement on TRIPS and Public Health for the least developed countries (LDCs). Under the waiver facility, an LDC is allowed to export patented drugs without any limit to other LDCs having no or inadequate drug manufacturing facilities until January 1, 2016.
The Council for TRIPs took a decision on June 2, 2003 to this effect in accordance with the recommendations of the WTO's Doha Ministerial held in 2001. Since then, the local pharmaceutical manufacturers have been trying to convince the administration to do the needful, including the establishment of an API park, to help the country to make the best use of the exemption. But five years have gone by with the government making promises after promises in this respect in spite of the fact that Bangladesh is positioned uniquely among all the LDCs so far as pharmaceutical sector is concerned. Among the LDCs, it has the best drug manufacturing facilities with huge export potentials. With annual average growth rate of about 10 per cent, country's pharmaceutical industry is not far away from achieving self-sufficiency in meeting the local demand.
Local pharmaceutical companies are enjoying a market share of more than 80 per cent while the multi-nationals 20 per cent. Some of the leading local pharmaceutical companies have set up state-of-the-art manufacturing facilities. What has made Bangladesh as one of the leading drug manufacturers among the LDCs and in South Asia is its very strong finished formulation-manufacturing base. Bangladesh began small-scale export of drugs and medicines back in the late 80s. At least two local manufacturers took initiatives on their own to export pharmaceutical products to some less-regulated overseas markets like neighbouring Myanmar, Nepal and Sri Lanka in the absence of any official support and incentives.
In the early 90s, a few more companies joined the race and Bangladesh could make inroads in some of the partially regulated markets, including Russia, Ukraine, Georgia and Singapore. The success in entering these markets was viewed as a major breakthrough for the Bangladesh pharmaceutical industry. Since then the export of pharmaceutical products has been rising. However, the rate of growth of exports has been well below the actual potentials. The absence of an API park to a large extent is holding the country back from making pharmaceutical exports to its full potentials.
After coming to power, the present caretaker administration took up the API issue and decided to get the job done as soon as possible The government held a meeting with a World Bank (WB) mission to get funds from the Bank to set up the park at an estimated cost of Tk. 4.52 billion on 300 acres of land in Munshiganj district. The WB mission has agreed to provide necessary funds only after the completion of a study on social and environmental aspects of the project. Another development partner -- the Department for International Development (DFID) of UK -- has agreed to in principle conduct the study.
With the ECNEC approval, it is expected that all concerned do need to develop an effective partnership to get the API park project implemented within a shortest possible time to help the country avail itself of the opportunity offered through the exemption of patent regulations under the TRIPS. In addition to getting all the production facilities geared up, the local pharmaceutical industry should bolster its efforts for exploring newer markets, particularly in Africa and Latin America -- where a large number of developing countries and LDCs have scanty drug manufacturing facilities.