APIs and post-TRIPS scenario

That the local pharmaceutical's march towards attaining self-sufficiency in the production of active pharmaceutical ingredients (APIs) is on, augurs well for the industry as a whole. More heartening is the initiative that has gathered pace in recent years to this effect. In fact, the production of APIs, according to a report published in this paper Friday last, increased by nearly 100 per cent over the last one decade, ending in 2013.  The rise in API production has not only reduced the dependence on the import of certain basic raw materials but also facilitated their export, albeit on a very limited scale. The export of pharmaceutical raw materials, though not that big in absolute terms of both value and volume, recorded an 18-fold increase between 2003 and 2013.
A number of leading local pharmaceutical companies are now manufacturing APIs. That is enough to meet only 10 per cent of the requirements for basic raw materials of the domestic drug manufacturers.  Such companies and some more producers of drugs and medicines are investing more funds in production of APIs. However, given the time they have received since the signing of the TRIPS (trade-related intellectual property rights), the progress made by the local pharmaceutical companies in the production of APIs remains far from satisfactory.  The TRIPS concerning medicines is set to expire on January 01, 2016, taking away the protection that Bangladesh has been enjoying as a least developed country (LDC).
The major reasons for unsatisfactory progress in the basic raw material production include the delay of the establishment of the API Park on the part of the government. Now another factor -- the delay in the establishment of central effluent treatment plant (CETP) -- is limiting their production. The association of pharmaceutical companies has reportedly arranged a substantial volume of fund for installing the plant. The drug manufacturers have expressed the hope that they would be able to produce more than 60 per cent of APIs locally within the next 10 years. That will be a big achievement, no doubt. But had both the government and the drug manufacturers been sufficiently serious about building local production capacity, Bangladesh could have achieved remarkable progress in API production by now.
There is another downside of the failure to achieve sufficient progress in the production of APIs locally. After the expiry of the TRIPS, the multinational drug manufacturers, it is feared, would dictate terms as far as the prices of their patented drugs and medicines are concerned. In such a situation, the developing countries and LDCs with low production capacity in the case of basic raw materials for pharmaceutical products, would be forced to hike the prices of drugs and medicines. This will invariably cause immense sufferings to the poor people. The local pharmaceutical companies even with TRIPS in place have been hiking the prices of drugs and medicines at will. The situation in the domestic drug market in the absence of TRIPS can be anyone's guess.