API Park will add to robust pharmaceutical growth
Sunday, 10 June 2007
Shahiduzzaman Khan
The WTO agreement on TRIPS (Trade Related Intellectual Property Rights) has opened up doors to enormous opportunities for the Bangladesh pharmaceuticals sector, Bangladesh is the only country among the 50 LDCs which has strong manufacturing base of finished pharmaceuticals. The country is also an incredibly lucrative location for pharmaceuticals manufacturing for its ample supply of highly skilled white collar workforce, low labour cost and availability of power at low cost.
All the least developed countries (LDCs) in the WTO have been exempted from 'Pharmaceutical Patent Protection' until 2016, according to the Doha Declaration. The local medicine exporters should utilise the opportunity of TRIPS agreement, under which Bangladesh is allowed to export patented drugs to other LDC member countries until 2016. Besides taking other market developing measures, pharmaceuticals exporters should fully avail of the World Trade Organisation's (WTO's) opportunity at the same time.
Bangladeshi pharmaceuticals manufacturers are producing almost all drugs locally, which meet 97 per cent of the total demand. The country also exports its drugs and medicines to 67 countries round the world. Dearth of basic raw materials holds back the annual $500 million export potential of Bangladeshi medicines.
Local pharmaceutical sector has been witnessing an investment boom for the last couple of years, thanks to a growing consumer market and a WTO rule to come into effect next year. The WTO rule allows companies of the LDCs to produce and export essential drugs without maintaining patent. At present, Bangladesh has to depend largely on imported raw materials with about 80 percent of total raw materials coming from foreign countries. Manufacturers said the high dependence on raw materials would bar the local companies from taking advantage of WTO rule.
Meanwhile, the leading manufacturers have invested Tk 5.0 billion during last two years in the segment. Industry people forecast the country's exports could hit Tk 100 billion a year by 2010 if the government sets up an API production unit. The government has already acquired lands at Meghna Ghat at Bawshia for establishing the API Park. After the handover of the lands, the pharmaceuticals entrepreneurs would get the opportunity to produce raw materials of pharmaceuticals locally, which would be a milestone for the sector.
New and old pharmaceutical companies are making investments in a big way in the sector, seeing immense export prospects of their products. New investors are also making ventures in the thrust sector. The Department of Drug Administration sources said now 25 new companies are seeking nod from the regulator to start business.
Newcomers -- Silva, Mystic, Apex, Rangs, Popular, Marksman and Healthcare pharmaceuticals -- have already invested around Tk 400 Tk 500 million each. An Indian company -- Sun Pharmaceuticals -- also made its debut in Bangladesh early this year. Square Pharmaceuticals has invested Tk 2.40 billion in a plant at Kaliakoir, Gazipur. Opsonin will invest more than Tk 1.0 billion to build up a new plant in Barisal. Orion also has a plan to set up a Tk 1.0 billion plant at Bhaluka, Mymensingh.
Acme has spent Tk 700 million to refurbish its plant and has invested another Tk 200 million for a separate plant. Other big players also have plans for further investment, industry sources said. Not only the big shots but also mid-ranking and new houses have also come up with big investments. Renata bought 55 acres of land in Gazipur to set up a new plant at a cost of Tk 700 million. Incepta has built up a new plant at Ashulia, Dhaka with an investment of around Tk 700 millon. Aristopharma has bought several plots in Narayanganj BSCIC estate to set up its new plant. At present, over 300 companies have licenses for producing drugs in the country but only about 100 are in operation and 30-40 is active.
According to Export Promotion Bureau (EPB), export earnings from pharmaceuticals sector stood at Tk 502.2 million in the first 10 months (July-April) of the last fiscal year. The export volume was Tk 523.7 million in FY2002-03. A potential exporter said it is possible to earn Tk 50 billion from exporting pharmaceuticals, if a congenial atmosphere for the sector's further development is ensured. The local pharmaceuticals entrepreneurs should invest in development of herbal medicines. More investment in pharmaceuticals research work is needed so that new drugs are innovated.
However, the government has intensified its move to set up an Active Pharmaceutical Ingredients (API) Park with an estimated cost of Tk 452.52 billion for manufacturing basic raw materials for the drug producers.
The establishment of API Park is now in the final stage as its development project proposal (DPP) is awaiting approval of the Executive Committee of National Economic Council (ECNEC). The Bangladesh Small and Cottage Industries Corporation (BSCIC) recently, sent the DPP to the Planning Commission for its approval of the ECNEC.
The government has, finally, selected a 300-acre site in Pausia and Lakhsmipur mouza under Munshiganj district for setting up the API Park.
The BSCIC is the assigned body to implement the API project by June 2009. The government will bear the project cost from its own coffer. Of the estimated project cost, Tk 271.51 billion will be provided as interest free loan while Tk 181 billion as grant. The BSCIC will hand over the management of the API Park to the Bangladesh Association of Pharmaceutical Industries (BAPI).
The API Park will make the country self-sufficient in drug research; medicinal plant, treatment of both solid and liquid wastes that are needed as raw materials with a full international testing laboratory, A total of 50 plots for 50 industries, each having 5.0 acres of land, will generate employment for 19,500 people. Bangladesh now has to import 70 per cent of the raw materials for manufacturing drugs while the rest 30 per cent is met from domestic sources. Once the park is established, the dependence on import will reduce giving a boost to the Tk 50 billion-market of Bangladesh's pharmaceutical industry.
Commercial wings of Bangladesh missions abroad can play an important role in creating market for local pharmaceutical products. There are many countries that do not know Bangladesh exports drugs. So, product sample can be displayed in missions. The missions can promote local medicines while local producers can keep missions up-to-date with new developments. The government had put a ceiling on the office expenses of local companies operating in foreign countries. The limit was fixed at $ 2,500 per month for a company, which is much below than what a company needs to run an office aboard. Other than office rent, which is very high in foreign cities, the companies also need to register their products with drug administrations of that particular country. The cost of registering a drug may go up to $ 22,000. And to tap an optimum level of business, a company needs to register at least 20 to 25 drugs in a single country.
There is also a need for setting up an independent quality control laboratory in the country for pharmaceutical products. Bangladesh currently earns around Tk 600 million a year from medicine exports. But bright future awaits the country through establishment of the API Park that may raise the export growth in the sector to a billion dollar-mark or more than that.
The WTO agreement on TRIPS (Trade Related Intellectual Property Rights) has opened up doors to enormous opportunities for the Bangladesh pharmaceuticals sector, Bangladesh is the only country among the 50 LDCs which has strong manufacturing base of finished pharmaceuticals. The country is also an incredibly lucrative location for pharmaceuticals manufacturing for its ample supply of highly skilled white collar workforce, low labour cost and availability of power at low cost.
All the least developed countries (LDCs) in the WTO have been exempted from 'Pharmaceutical Patent Protection' until 2016, according to the Doha Declaration. The local medicine exporters should utilise the opportunity of TRIPS agreement, under which Bangladesh is allowed to export patented drugs to other LDC member countries until 2016. Besides taking other market developing measures, pharmaceuticals exporters should fully avail of the World Trade Organisation's (WTO's) opportunity at the same time.
Bangladeshi pharmaceuticals manufacturers are producing almost all drugs locally, which meet 97 per cent of the total demand. The country also exports its drugs and medicines to 67 countries round the world. Dearth of basic raw materials holds back the annual $500 million export potential of Bangladeshi medicines.
Local pharmaceutical sector has been witnessing an investment boom for the last couple of years, thanks to a growing consumer market and a WTO rule to come into effect next year. The WTO rule allows companies of the LDCs to produce and export essential drugs without maintaining patent. At present, Bangladesh has to depend largely on imported raw materials with about 80 percent of total raw materials coming from foreign countries. Manufacturers said the high dependence on raw materials would bar the local companies from taking advantage of WTO rule.
Meanwhile, the leading manufacturers have invested Tk 5.0 billion during last two years in the segment. Industry people forecast the country's exports could hit Tk 100 billion a year by 2010 if the government sets up an API production unit. The government has already acquired lands at Meghna Ghat at Bawshia for establishing the API Park. After the handover of the lands, the pharmaceuticals entrepreneurs would get the opportunity to produce raw materials of pharmaceuticals locally, which would be a milestone for the sector.
New and old pharmaceutical companies are making investments in a big way in the sector, seeing immense export prospects of their products. New investors are also making ventures in the thrust sector. The Department of Drug Administration sources said now 25 new companies are seeking nod from the regulator to start business.
Newcomers -- Silva, Mystic, Apex, Rangs, Popular, Marksman and Healthcare pharmaceuticals -- have already invested around Tk 400 Tk 500 million each. An Indian company -- Sun Pharmaceuticals -- also made its debut in Bangladesh early this year. Square Pharmaceuticals has invested Tk 2.40 billion in a plant at Kaliakoir, Gazipur. Opsonin will invest more than Tk 1.0 billion to build up a new plant in Barisal. Orion also has a plan to set up a Tk 1.0 billion plant at Bhaluka, Mymensingh.
Acme has spent Tk 700 million to refurbish its plant and has invested another Tk 200 million for a separate plant. Other big players also have plans for further investment, industry sources said. Not only the big shots but also mid-ranking and new houses have also come up with big investments. Renata bought 55 acres of land in Gazipur to set up a new plant at a cost of Tk 700 million. Incepta has built up a new plant at Ashulia, Dhaka with an investment of around Tk 700 millon. Aristopharma has bought several plots in Narayanganj BSCIC estate to set up its new plant. At present, over 300 companies have licenses for producing drugs in the country but only about 100 are in operation and 30-40 is active.
According to Export Promotion Bureau (EPB), export earnings from pharmaceuticals sector stood at Tk 502.2 million in the first 10 months (July-April) of the last fiscal year. The export volume was Tk 523.7 million in FY2002-03. A potential exporter said it is possible to earn Tk 50 billion from exporting pharmaceuticals, if a congenial atmosphere for the sector's further development is ensured. The local pharmaceuticals entrepreneurs should invest in development of herbal medicines. More investment in pharmaceuticals research work is needed so that new drugs are innovated.
However, the government has intensified its move to set up an Active Pharmaceutical Ingredients (API) Park with an estimated cost of Tk 452.52 billion for manufacturing basic raw materials for the drug producers.
The establishment of API Park is now in the final stage as its development project proposal (DPP) is awaiting approval of the Executive Committee of National Economic Council (ECNEC). The Bangladesh Small and Cottage Industries Corporation (BSCIC) recently, sent the DPP to the Planning Commission for its approval of the ECNEC.
The government has, finally, selected a 300-acre site in Pausia and Lakhsmipur mouza under Munshiganj district for setting up the API Park.
The BSCIC is the assigned body to implement the API project by June 2009. The government will bear the project cost from its own coffer. Of the estimated project cost, Tk 271.51 billion will be provided as interest free loan while Tk 181 billion as grant. The BSCIC will hand over the management of the API Park to the Bangladesh Association of Pharmaceutical Industries (BAPI).
The API Park will make the country self-sufficient in drug research; medicinal plant, treatment of both solid and liquid wastes that are needed as raw materials with a full international testing laboratory, A total of 50 plots for 50 industries, each having 5.0 acres of land, will generate employment for 19,500 people. Bangladesh now has to import 70 per cent of the raw materials for manufacturing drugs while the rest 30 per cent is met from domestic sources. Once the park is established, the dependence on import will reduce giving a boost to the Tk 50 billion-market of Bangladesh's pharmaceutical industry.
Commercial wings of Bangladesh missions abroad can play an important role in creating market for local pharmaceutical products. There are many countries that do not know Bangladesh exports drugs. So, product sample can be displayed in missions. The missions can promote local medicines while local producers can keep missions up-to-date with new developments. The government had put a ceiling on the office expenses of local companies operating in foreign countries. The limit was fixed at $ 2,500 per month for a company, which is much below than what a company needs to run an office aboard. Other than office rent, which is very high in foreign cities, the companies also need to register their products with drug administrations of that particular country. The cost of registering a drug may go up to $ 22,000. And to tap an optimum level of business, a company needs to register at least 20 to 25 drugs in a single country.
There is also a need for setting up an independent quality control laboratory in the country for pharmaceutical products. Bangladesh currently earns around Tk 600 million a year from medicine exports. But bright future awaits the country through establishment of the API Park that may raise the export growth in the sector to a billion dollar-mark or more than that.