Giving a boost to pharmaceutical exports
Sunday, 26 August 2007
Shahiduzzaman Khan
THE idea of establishing an Active Pharmaceutical Ingredients (API) park was conceived several years ago when the leaders of the pharmaceutical association felt its importance seeing its immense potentialities. Such potentials emerged from the waiver of certain provisions of the World Trade Organisation (WTO) Agreement on Trade-related Intellectual Property Rights (TRIPS) and Public Health for the least developed countries (LDCs).
Under the waiver facility, the LDCs have been exempted from meeting patent regulations under the TRIPS. And 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.
When the leaders of the Bangladesh Association of Pharmaceutical Industries (BAPI) met the authorities of the then 4-party alliance government and then informed of such potentials, the government instantly agreed to establish an API park in order to boost the production of drugs. But afterwards five years have already gone by, no significant work was done excepting some movements for the selection of site.
The present interim government, after coming to power, has taken a new initiative to implement the decision to set up the park by next year. In doing so, the government has already held a meeting with the World Bank to get financial assistance at an estimated cost of Tk. 4.52 billion on 300 acres of land in Munshiganj district. The World Bank has agreed to provide funds 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 - in principle has agreed to conduct the study. The government is considering a private-public partnership in order to mobilise necessary resources for the project.
The API park is a long-felt demand of the drug producers of Bangladesh. Now it is expected to see light of the day as the government has taken up the process of its implementation. The project is now awaiting approval of the Executive Committee of National Economic Council (ECNEC). The Bangladesh Small and Cottage Industries Corporation (BSCIC) is the assigned body to implement the project.
Along with the development partners, the government will bear the project cost from its own fund. Of the estimated project cost, Tk 2.71 billion will be provided as interest free loan while Tk 1.81 billion as grant. The BSCIC is expected to hand over the management of the API park to the Bangladesh Association of Pharmaceutical Industries (BAPI).
Local drug manufacturers are expected to produce raw materials for medicines in the park. The 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. At present, the producers need to import 80 per cent of the raw materials from abroad. Once the park is ready for operations, the owners are expected to bear the entire cost for establishing central drainage system for waste management.
A total of 50 plots for 50 industries, each having 5.0 acres of land, will generate employment for 19,500 people. Thus the dependence on import will reduce giving a boost to the Tk 34 billion-market of Bangladesh's pharmaceutical industry. Setting up of API park will also serve as the backward linkage to the pharmaceutical industry.
The Bangladesh pharmaceutical industry now accounts for some 95 per cent of the domestic medicine market worth $ 503 million. At present, Bangladeshi companies exports pharmaceutical products to 86 countries. The country has a total of 140 pharmaceutical companies in operation, of which 20-30 big players hold about half of the market share. As a WTO rule allows companies of least-developed countries including Bangladesh to produce and export essential drugs without maintaining patents, Bangladesh can emerge as a major player in global drug market for it leads other LDCs in basic infrastructure.
Commercial wings of foreign missions can play an important role in creating market for local pharmaceutical products. There are many countries who 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.
Earlier, 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.
Bangladesh currently earns around Tk 600 million a year from medicine exports. Industry people, however, forecast that the export earnings from the sector can hit Tk 100 billion a year by 2010 if the government sets up an API park and provides other incentives.
There is a tremendous scope of exporting local drugs. Besides, medicine export is very profitable. A fluconazole capsule sells at Tk 8.0, whereas the same product is being exported to Pakistan at a price of Tk 38. Similarly the price of paracetamol syrup in the country is Tk 13 but it is being exported to Russia at Tk 100. In order to seize the opportunity, the government needs to ensure that the country's existing Patent Act of 1933 complies with the WTO/TRIPS agreement. In the Patent Act, there is a provision of not allowing the local companies to manufacture patented drugs, which presently contradicts the WTO/TRIPS provision. The government needs to take advantage of compulsory licencing and parallel import to tap the huge potentials of pharmaceutical sector.
To avail the opportunities under TRIPS/WTO provision, a good number of new pharmaceutical companies are taking preparations throughout the country. Many pharmaceutical industries including Square, Beximco, and Novartis invested huge amounts to enhance their production capacity.
Meanwhile, Bangladesh is in the process of revising its national drug policy. There is a need to provide support to the government in enhancing access to essential drugs through providing advice and creation of awareness among government officials about the two issues: The impact of relevant trade agreements and globalisation on access to medicines. Bangladesh, as one of the least developed countries, has a unique position in the region not having to adhere to the TRIPS Agreement until 2016.
The impact of price control on production, availability, and access to essential drugs. There is lack of detailed and publicly available information about this impact. There is a need to provide evidence about the success of pricing control in ensuring essential drugs affordability and whether or not it has made manufacturers concentrate on non-essential drugs.
The Directorate of Drug Administration, the national drug regulatory authority, needs to be strengthened and provided with the necessary financial and human resources. Widespread corruption in the Drug Administration needs to the curbed as well.
THE idea of establishing an Active Pharmaceutical Ingredients (API) park was conceived several years ago when the leaders of the pharmaceutical association felt its importance seeing its immense potentialities. Such potentials emerged from the waiver of certain provisions of the World Trade Organisation (WTO) Agreement on Trade-related Intellectual Property Rights (TRIPS) and Public Health for the least developed countries (LDCs).
Under the waiver facility, the LDCs have been exempted from meeting patent regulations under the TRIPS. And 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.
When the leaders of the Bangladesh Association of Pharmaceutical Industries (BAPI) met the authorities of the then 4-party alliance government and then informed of such potentials, the government instantly agreed to establish an API park in order to boost the production of drugs. But afterwards five years have already gone by, no significant work was done excepting some movements for the selection of site.
The present interim government, after coming to power, has taken a new initiative to implement the decision to set up the park by next year. In doing so, the government has already held a meeting with the World Bank to get financial assistance at an estimated cost of Tk. 4.52 billion on 300 acres of land in Munshiganj district. The World Bank has agreed to provide funds 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 - in principle has agreed to conduct the study. The government is considering a private-public partnership in order to mobilise necessary resources for the project.
The API park is a long-felt demand of the drug producers of Bangladesh. Now it is expected to see light of the day as the government has taken up the process of its implementation. The project is now awaiting approval of the Executive Committee of National Economic Council (ECNEC). The Bangladesh Small and Cottage Industries Corporation (BSCIC) is the assigned body to implement the project.
Along with the development partners, the government will bear the project cost from its own fund. Of the estimated project cost, Tk 2.71 billion will be provided as interest free loan while Tk 1.81 billion as grant. The BSCIC is expected to hand over the management of the API park to the Bangladesh Association of Pharmaceutical Industries (BAPI).
Local drug manufacturers are expected to produce raw materials for medicines in the park. The 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. At present, the producers need to import 80 per cent of the raw materials from abroad. Once the park is ready for operations, the owners are expected to bear the entire cost for establishing central drainage system for waste management.
A total of 50 plots for 50 industries, each having 5.0 acres of land, will generate employment for 19,500 people. Thus the dependence on import will reduce giving a boost to the Tk 34 billion-market of Bangladesh's pharmaceutical industry. Setting up of API park will also serve as the backward linkage to the pharmaceutical industry.
The Bangladesh pharmaceutical industry now accounts for some 95 per cent of the domestic medicine market worth $ 503 million. At present, Bangladeshi companies exports pharmaceutical products to 86 countries. The country has a total of 140 pharmaceutical companies in operation, of which 20-30 big players hold about half of the market share. As a WTO rule allows companies of least-developed countries including Bangladesh to produce and export essential drugs without maintaining patents, Bangladesh can emerge as a major player in global drug market for it leads other LDCs in basic infrastructure.
Commercial wings of foreign missions can play an important role in creating market for local pharmaceutical products. There are many countries who 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.
Earlier, 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.
Bangladesh currently earns around Tk 600 million a year from medicine exports. Industry people, however, forecast that the export earnings from the sector can hit Tk 100 billion a year by 2010 if the government sets up an API park and provides other incentives.
There is a tremendous scope of exporting local drugs. Besides, medicine export is very profitable. A fluconazole capsule sells at Tk 8.0, whereas the same product is being exported to Pakistan at a price of Tk 38. Similarly the price of paracetamol syrup in the country is Tk 13 but it is being exported to Russia at Tk 100. In order to seize the opportunity, the government needs to ensure that the country's existing Patent Act of 1933 complies with the WTO/TRIPS agreement. In the Patent Act, there is a provision of not allowing the local companies to manufacture patented drugs, which presently contradicts the WTO/TRIPS provision. The government needs to take advantage of compulsory licencing and parallel import to tap the huge potentials of pharmaceutical sector.
To avail the opportunities under TRIPS/WTO provision, a good number of new pharmaceutical companies are taking preparations throughout the country. Many pharmaceutical industries including Square, Beximco, and Novartis invested huge amounts to enhance their production capacity.
Meanwhile, Bangladesh is in the process of revising its national drug policy. There is a need to provide support to the government in enhancing access to essential drugs through providing advice and creation of awareness among government officials about the two issues: The impact of relevant trade agreements and globalisation on access to medicines. Bangladesh, as one of the least developed countries, has a unique position in the region not having to adhere to the TRIPS Agreement until 2016.
The impact of price control on production, availability, and access to essential drugs. There is lack of detailed and publicly available information about this impact. There is a need to provide evidence about the success of pricing control in ensuring essential drugs affordability and whether or not it has made manufacturers concentrate on non-essential drugs.
The Directorate of Drug Administration, the national drug regulatory authority, needs to be strengthened and provided with the necessary financial and human resources. Widespread corruption in the Drug Administration needs to the curbed as well.