Barriers to pharma export

DESPITE talks galore about diversification of country's export basket, there has not been much progress to this effect. The readymade garment (RMG) sector still dominates the scene with performance of some other sectors remaining almost unchanged. One or two sectors have improved their performance but that too not to any significant level. Both industry people and the official circles have, time and again, found in the pharmaceutical sector a great potential to make a mark in the international market. And there are enough reasons to pin such hope on the sector. The gross turnover of the country's pharmaceutical sector almost doubled to Tk 70 billion in 2010 over a period of only three years and major players expect this turnover to rise to Tk 100 billion this fiscal. The people's growing awareness about healthcare, the increase in their buying capacity and the improved communications system have helped the industry expand its market domestically. The increase in the prices of drugs and medicines, however, has contributed, to some extent, to the marked growth of revenue of the pharmaceutical companies. But in comparison to its performance in the domestic market, the pharmaceutical companies have performed below the expectation in the export market in recent years despite the fact the production facilities and external trade environment, in terms of international trade rules, are otherwise conducive to the healthy growth of pharmaceutical exports. A good number of the local companies have the state-of-the-art production facilities in place and they produce medicines of international standard. In fact, the pharmaceutical exports, according to statistics available with the Export Promotion Bureau (EPB), have been in the negative territory in recent years. The value of drugs and medicines exported by Bangladesh companies was $36.3 million in 2008-09 as against that of $ 43 million in the previous year. The industry's export earning in 2009-10 was about $41 million. The performance during the current fiscal might hover around the level of the last fiscal. So, the mismatch between the actual performance and the potential as far as export of pharmaceutical products is concerned, does deserve careful attention of the stakeholders. The managing director of a leading drug manufacturing company and a ruling party lawmaker, while speaking at a seminar in Dhaka last week, blamed the official policies for the lackluster export performance of the pharmaceutical sector. The moot point that he did highlight was that the companies exporting drugs and medicines had been facing problems due to high cost of registration for their export items and restriction on transfer of funds for promotional activities in the importing countries. And he suggested that the government should address those issues effectively. These days, most governments across the world are very sensitive to the issue of money laundering and the government of Bangladesh is no exception. But vigilance against money laundering should not affect the efforts for better exploitation of export potential of any particular sector. In addition to solving the problems faced by local pharmaceutical companies in transferring funds for promotional activities abroad, the government should introduce necessary policy measures to promote export of drugs and medicines made in Bangladesh.