Profile of Pharmaceutical Sector in Bangladesh

8/10/2019 Profile of Pharmaceutical Sector in Bangladesh

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Profile of Pharmaceutical Sector in Bangladesh:

Introduction:

Pharmaceuticals industry is the core of healthcare sector of Bangladesh. Being part of healthcare

sector, its performance is related to demographic variables like population growth as well as

economic growth and healthcare policy. In our country, with improving demographic

characteristics, recent economic growth and favorable policy, the industry has seen good growth.

It is one of Bangladeshs success stories and one of the most technologically advanced sectors

currently in existence. This industry is matter of substantial pride to the country. Skillful

attitudes, knowledge and innovative ideas from the professionals are the key reasons why this

industry grew in the way it did.

A brief history

The history of Pharmaceuticals industry dates back to 1950s. Over the years, the industry has

gone through some significant changes. In the early post-independence period of Bangladesh,

multinational companies (MNCs) dominated the pharmaceutical sector. Eight leading

multinational companies enjoyed 75% of the total domestic market (Bangladesh Tariff

Commission 2010). In 1982, a defined guideline for the development of the industry was created

through the formulation of national drug policy (NDP), and drug control ordinance. Under theNDP, only local companies were allowed to produce vitamins, enzymes, and cough syrups. This

led to the formation of local pharmaceuticals companies and an increase in domestic production.

And Bangladesh, which was once a drug-importing country, became a drug-exporting country by

the late 80s.

Current Status:

Local Market Overview

The Bangladesh pharmaceutical marketplace is predominantly a branded generic marketplace.

Pharmaceutical firms in Bangladesh can either sell to the private sector pharmacies, to the

government and its public health care facilities, or to international organizations operating in

Bangladesh (e.g. UNICEF).


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Bangladesh pharmaceutical industry is mainly dominated by domestic manufacturers. Of the

total pharmaceutical market of Bangladesh, the local companies are enjoying a market share

reaching around 97%, while the MNCs are having a poor market share. The top two domestic

manufacturers, namely Square and Incepta Pharma are having a combined market share of near

30% of the total pharmaceutical market of the country. Bangladesh Association of

Pharmaceutical Industries (BAPI) was instituted in 1972, since then BAPI playing a pivotal role

in shaping up the industry.

Number of Firms:

About 300 pharmaceutical companies are operating at the moment. Only 3% of the drugs are

imported, the remaining 97% come from local companies. Positive developments in the

pharmaceutical sector have enabled Bangladesh to export medicine to global markets. By

overcoming the underlying obstacles this sector can develop more and can be an effective

exporting sector of Bangladesh

Industry Structure

The industry has some distinct features compared to other countries. First, R&D activity is

virtually nil in Bangladesh pharmaceutical industry it is a branded generic market. Companies

basically manufacture finished formulation by assembling known generic and patented (in somecases) product combination. Some firms have been engaged in producing APIs, the core of

pharmaceutical products, but these productions are limited to synthesis stage (final stage) only.

Degree of concentration

Being Branded-generic product oriented business, manufacturers usually are able to

charge a premium for established brands, and enjoy a relatively stable market share. As a result,

the lists of top performing firms have been quite consistent over the years, with the leader,

Square pharmaceuticals topping since 1985.

Segmentation

The overall business activities of pharmaceuticals can be classified in three layers.


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The primary layeris R&D Activities. This is often a very costly and hish risk business,

and for many of global Pharmaceutical firms, represent the majority of costs. However, in

Bangladesh, this activity is nil, and all the firms are producers of known and established drugs.

The second layer is manufacture of ingredients for finished formulations. These

activities cover production of Active Pharmaceuticals Ingredients (API), Excipients, and

Solvents etc. that are used as raw material in producing the final drug formulations. Historically,

Bangladesh has been dependent on imports for APIs and other ingredients. The pharmaceutical

manufacturers in Bangladesh procure raw materials from various countries namely UK, France,

Germany, Japan, Holland, Italy, Denmark, China, Switzerland, Austria, Hungary, India, Ireland

etc.

In Bangladesh, companies have only recently entered API business. At present, there are

21 companies in Bangladesh manufacturing 41 APIs. Industry participants claim already

becoming self-sufficient in some APIs, namely, Penicillin, Cephalexin, NSAID and Anti-Pyretic.

The production of APIs is confined to the last stage of Synthesis. Presently, Local APIs take a

20% share in domestic production. The rest 80% is imported. These imported APIs represent

majority of raw materials import by Bangladesh, approximately 70%. But the overall production is

very low compared to total demand.

The final layerconcerns producing final products, finished formulations. In this layer,

there are both patented and generic products. However, in Bangladesh, only generic products are

produced. Formulations represent the mainstream business in pharmaceuticals industry of

Bangladesh. Presently, the market consists of approximately 8000 generic products and 258

firms with manufacturing capability, along with some imported patented products. (Source:IDLC

Research)

Industry structure based on business nature:

1. High-End products (Anti Cancer, Insulin, Vaccines etc.)These are essentially products specific to market niches, i.e. Anti cancer, Diabatic

products, Vaccines etc. these products are usually high priced and represent a small portion of

the market. Profit margin in such products is very high. Recently, domestic firms have been

entering into this field, and competition is expected to drive prices and import dependency down.


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2. Branded generics (Anti-Gastric, Anti-Biotic etc.)

This represents broadest segment of the market, comprising products with relatively

stable margin and Brand orientation. This segment is dominated by local manufacturers, and due

to high brand loyalty observed in our market, market share of manufacturers is usually moves

rarely.

3. Low End generics

This segment is small, often for products with low branding possibility, and price war is

most evident here. The number of competitors is very high, and market share of each competitor

depends on success of marketing strategy.

4. Contract manufacturing (domestic and export)

Locally, this segment is small as almost every firm manufactures its own products. The

business usually comes from Health organizations like SMC (Social Marketing Company),

UNICEF etc. to provide products such as saline, contraceptives etc.

Presently, a number of top firms engage in contract manufacturing. Competition is very

low, as each firm engages based on foreign counterpart relations. Manufacturing technologies

and accreditations play a vital role in developing contract manufacturing capability.

Regulatory environment

The industry is regulated by Directorate General of Drug Administration (DGDA)

Pricing:

Under the present regulatory structure, government fixes the maximum retail prices (MRP) of

209 essential drug chemical substances. Other drugs, listed as non-essential, are priced through

an indicative price system. For imported finished products, whether they fall in the category of

vital or non-vital drugs, a fixed percentage of markups are applied to the C&F price to obtain the

MRP. For local distribution, all drugs must be registered with DRA. However, this price

determination is only for the local producer companies and still now the multinational

organizations are determining. (SOURCE: National Drug policy 2004) Prices of Bangladeshi

generics are amongst the lowest in the world (Forbes Asia, 2013).


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Key registration areas:

Combination drugs (other than vitamins, nutritional preparations or therapeutically

useful) are not allowed

For imported drugs, GMP validation, bioavailability and bio-equivalency are important

registration criteria

Drug Production regulations:

Firms are required to upgrade their productive facilities to ensure cGMP is followed.

Foreign and MNCs are allowed to manufacture drugs in Bangladesh only if at least three

of their original research drug products are registered in at least two of the following

countries: USA, UK, Switzerland, Germany, France, Japan, and Australia.

Drugs not in BP, USP, IP, INN or BPC will not be allowed to manufacture.

Foreign firms can produce drugs in Bangladesh under licensing agreement following

certain conditions.

For export purpose only, any drug can be produced in Bangladesh

Drug distribution, storage and sale:

Only registered drugs are allowed for sale

Other than OTC drugs, no drugs should be sold without prescriptions.

Advertisements are not allowed

Occupational Structure in Pharmaceutical Sector:

The local pharmaceutical industry is also the highest white collar employment sector in the

country, giving employment to millions of trained professionals. Around 115,000 workers are

employed in this sector, of which 58.6 percent work in management and 41.4 percent work in

production. Only 2.1 percent of the total work force in this industry is female

Four broad groups are particularly noteworthy.

1. There are significant numbers of operatives mainly in formulating and tableting, and in

packaging and filling.


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2. There are significant numbers in technician and similar roles, particularly in large

companies.

3. There are significant numbers of chemists and pharmacists, particularly in the large and

the medium company, reflecting the fact that a range of types of high level work are done

by these professions.

4. There are very large numbers of sales and (in the case of the small company) marketing

workers. This reflects mainly the emphasis on direct sales to retail pharmacies in

Bangladesh.

Occupational Structure of Pharmaceutical Firms

Export of Pharmaceuticals

Bangladesh is exporting their pharmaceuticals products to Vietnam, Singapore, Myanmar,

Bhutan, Nepal, Sri Lanka, Pakistan, Yemen, Oman, Thailand, and some countries of Central

Asia and Africa. It also has a large market in European countries.


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Market share in exporting:

In Bangladesh, there are about 50 pharmaceuticals companies, who are leading the local market.

But all of them are not engaged in exporting. Novartis is leader in export marketing. Though

Novartis is a foreign organization and they remit their profit to their parent country, they are

paying different types of tariffs and taxes to the government of Bangladesh

Export Policy

The pharmaceutical sector as a highest priority sector in Bangladesh is entitled to income tax

exemption for export earnings, export credit at reduced rates, assistance in marketing in overseas

market through participating in export fairs, and so on. In addition, the government reduced or

exempted duties on some capital machinery and raw materials imported for the use of

pharmaceutical production. The sector also enjoys a tax holiday and duty drawback scheme. The

export policy of 201215 doubled the value of samples allowed to be sent by the pharmaceutical

industry to overseas buyers to US$60,000 a year.

Import of Pharmaceuticals

Bangladesh is importing the medicinal products from different countries, especially from India.

Different organizations of this country are related to import the pharmaceuticals products and

raw materials of pharmaceutical industries. Novo and Medintis are importing maximum amount

of these types of products. Other organizations are engaging to import the pharmaceuticals

products. They are- Sanofi, Aventis, Glaxo Smithkline, Sandoz, Novartis, Roche, Unimed,

Servier etc.

Import Policy

Pharmaceutical firms are subject to a special low-tariff regime for both outputs and inputs. Thisis because of the special dispensation under the Drug Policy (the Drug Control Act of 1982

restricted imports and capped prices) to keep domestic prices low but with strong controls on

competing imports. The effective rate of protection (ERP) in the pharmaceutical sector is

apparently very low, ranging from 0.5percentto about 20percent, provided that the output tariff


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of 0 to 5percent is the one actually levied. However, once the tariff equivalence of import

controls is taken into account, ERPs could be much higher

The import regime consists of banned items, restricted items and freely importable items. The

procedures for importation are facilitated by creating a block list of imports for each

recognized pharmaceutical company approved by the Director of the DGDA. Companies

importing raw materials have to present an import invoice and analysis report of the quality,

value, and quantity for each import. The analysis report of the raw materials must be certified by

the DGDA or be prepared by a government-approved preshipment inspection agent (Ministry of

Commerce 2012).

Competitive Position

Pharmaceutical industry is facing competitive market domestically. Square, Beximco, Incepta,Acme, SK-F, Drug International, AristoPharma, ACI, are the competitors of one another inmedicine market. To purchase the medicinal product is not depending on the customer choice.For this reason, the primary survey over the customer and the actual condition is different. Fromthe above chart, this can be said that no organization can capture the maximum market share inmedicine marketing. There is a tough competition among Square, Beximco, and Incepta.

Foreign Competitions

At the beginning the foreign pharmaceuticals were dominating the market in our country. Stillnow, Pharmaceuticals industries are facing foreign competition. But our industry is not afraid ofthis foreign competition. There are many multinational pharmaceutical organizations which haveestablished their plants in Bangladesh and importing their raw materials from abroad. Amongthese competitors, Roche, Glaxo SmithKline, Novartis are leading. In export market, theNovartis is playing the dominant role.

Prospects of Foreign Competitioni. Foreign competitions made the country firms more eligible to face challenges that arose after

the year 2005.ii. Pharmaceuticals industries will become more efficient in producing medicine which may saveour lives.iii. The local firms will not face any rigorous problem in foreign countries as they areaccustomed in competition with foreign firms.


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TRIPS & BANGLADESH

The WTOs Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)

requires all signatories to legislate 20-year patent protection for pharmaceutical products into

their domestic law. TRIPSis a framework for intellectual property protection with minimum

agreed standards. While signatory countries must meet its requirements through legislation,

TRIPS provides significant flexibility.

Along with other LDCs, Bangladesh has an exemption from the World Trade Organization's

(WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement. The

exemption is currently due to expire at the start of 2016. The TRIPs exemption allows

Bangladesh (and other LDCs) not to provide patent protection for drugs that are required by

TRIPs to be protected by patents elsewhere in the world. The government of Bangladesh has

proposed that the exemption should be extended to 2026, but it is not yet clear whether this will

happen. The chief benefit of TRIPs exemption to the sector in Bangladesh is that it allows

companies operating in Bangladesh to develop generic versions of drugs that are under patent

protection elsewhere, and to sell these products. They can be sold on the local market. They can

also be sold in markets where the patent owner has not filed for protection, or to other LDCs or

non-members of the WTO which have not implemented patent protection, which gives the sector

some advantages in export markets. A further benefit is that Bangladesh is now one of very few

countries that can fulfill an export request for a compulsorily licensed pharmaceutical product

originally patented after 2005. Under Article 31 of TRIPs, a government can over-ride a patent to

compulsorily license a pharmaceutical product for public health reasons.

In some cases, Bangladesh companies that are already producing a generic version of a patented

drug may have a head start in exporting it to global markets when it comes off patent protection.

Bangladesh has tariff-free access to the EU, USA and Japan for pharmaceuticals. It has reduced

tariffs for exports to India and China under the South Asian Free Trade Area and the Asia Pacific

Trade Agreement. This favorable market access is not related to TRIPs. The benefits that the

Bangladesh pharmaceutical sector derives from the TRIPs exemption are limited by the fact that


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it purchases most of its Active Pharmaceutical Ingredients (APIs) from countries compliant with

TRIPs. Most of the APIs under patent protection that it purchases are therefore licensed by the

patent holder, and this is reflected in prices paid.

The Bangladesh pharmaceutical sector is investing heavily in the capabilities needed to

develop its own APIs. If the TRIPs exemption is extended it is likely that it will be able to

replace many licensed in-patent APIs with its own generic versions, significantly cutting its

costs. Conversely, if the exemption is not extended, some holders of pharmaceutical intellectual

property might use their greater leverage to enter Bangladeshs domestic market, possibly

limiting access by the Bangladesh sector to APIs, or to raise prices for APIs charged to

Bangladesh businesses.

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The future of pharmaceutical exports from Bangladesh is bright. After the inclusion of

the Doha declaration in WTO / TRIPS Agreement, each and every country belonging to the LDC

Category has the option not to opt for pharma product patent until year 2,016; which means, they

can now legally reverse-engineer patented products and sell in their markets and can export to

other LDCs, too. This generates a huge export opportunities for Bangladesh, as among all 50

LDCs, Bangladesh is the only country which had a strong pharma manufacturing base. Besides

direct export operations, there is also a huge opportunity for the Bangladeshi companies to go for

the Contract Manufacturing and compulsory licensing. The good news is, the leading pharma

exporters of Bangladesh have already started availing these opportunities.

Trends in Competitiveness Relative to China, India and other countries with

low manufacturing costs

Bangladeshs most significant source of competitive advantage in manufacturing industry is its

low labor costs. Bangladesh also claims a significant advantage in energy costs over competitors,

arising from low natural gas prices. Despite of low labor cost deficiencies in infrastructure,

weaker local supply networks and less advanced accumulation of knowledge and know-how in

Bangladesh give industries in China and India compensating advantages.


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However, Bangladeshs infrastructure is improving, and pharmaceutical companies are investing

in their own knowledge and capabilities, and in developing local supply capacity (particularly in

APIs). This appears to be narrowing the gap on non-cost factors.

Rising Labour Productivity in Pharmaceuticals Sector

Rising labour productivity will be a significant factor affecting pharmaceutical sector

employment in Bangladesh into the future. Businesses will have to invest in newer equipment in

order to meet international standards, and this equipment will be capable of producing

substantially greater output relative to the number of operators employed. This reflects a wider

reality in the pharmaceutical sector globally that newer and improved technologies are

continually improving productivity in the sector at a rapid rate as they are deployed. For any

individual operation the increases in labour productivity tend to occur in jumps associated withinvestment in production equipment or in automation, but appear as quite rapid continual

productivity growth when viewed at the level of the sector

Four important JOB SCOPES in Pharmaceutical industries

1. Pharmaceutical industries (Finished medicines, Active Pharmaceutical

Ingredients/APIs, and Excipients Manufacturing industries): In Production, Quality

Control (QC), Quality Assurance (QA), Product Development (PD), cGMP Training,

Warehouse, Drug Research and Invention, and Technical Services Department (TSD).

2. Pharmaceutical Marketing: Product Management Department (PMD), Medical

Services Department (MSD), Sales Promotion/Medical Promotion, Clinical Services,

Training for field forces, and International Marketing (IM) departments.

3. Drug Testing Laboratories (Dhaka and Chittagong)

4.

Research & Development in Pharma industries, educational and research institutes(Research for new drug molecules, Novel Drug Delivery Systems, Improved Healthcare,

Clinical aspects, etc.)

Challenges & Prospects


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1. Bioequivalence Test Facility: There is no standard facility for bioequivalence study in

Bangladesh. In order to register a product, a pharmaceutical company has to carry out this

test in foreign country by spending of a huge charge. For this reason, many pharmaceutical

manufacturers dont show interest to register their products in foreign countries that require

Bioequivalence study.

2. Modern Drug Testing Laboratory: A major limitation of drug control authority of

Bangladesh that also affects pharmaceutical export is unavailability of a modern, well

equipped drug testing laboratory (DTL) with the engagement of sufficient and skilled

pharmaceutical scientists. Due to lack of this, our drug control authority cannot monitor thequality of drugs manufactured by different pharmaceutical companies in Bangladesh.

Moreover, foreign buyers and regulatory authorities raise question about the status of our

drug testing laboratory, the central quality monitoring facilities of drug authority of

Bangladesh.

3. Custom Harassment in Sending Drug Sample: Considerable hazards or bureaucratic

obstacles are confronted by the local pharmaceutical companies in sending samples abroad,

to station or appoint representatives in foreign countries, in sending money for the purpose

and doing other promotional activities. The customs authority of Bangladesh imposes

restrictions in sending drug samples to the importing countries. Restrictions are being made

on giving permission to send drug samples and also limiting the quantity of samples to be

sent.

4. Regulated Markets: To register pharmaceutical products in regulated markets it requires

highly standardized documents. There are regulations directed by the regulatory authorities of

United States of America, European Union, Australia and Japan along with other highly

regulated and semi regulated countries. To meet all their requirements sophisticated and

accredited manufacturing plant, standardized manufacturing process, proper quality control

and above all highly skilled professionals are required. It is tough to meet all the

requirements by small pharmaceutical companies of Bangladesh.

5. Problems of Marketing


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i. Professionalism in marketing is not achieved yet in Bangladesh like other

developing countries.

ii. Because of having no sufficient incentives in comparison with their effort, the

turnover rate of medical representatives is very high.

iii. Most of the time costs of marketing hardly affect the price of the medicine.

iv. Lack of proper governmental laws and this implementation the law by the drug

administration.

6. Prospects of Marketing

i. Marketing system is improving in this sector and proper marketing may help a

firm to achieve the aim.

ii.

For free and fair competitions marketing can play a major role.

iii. Marketing can be regarded one of the most important weapons to face the

challenges of open market economy

7. Problems of Export

i. Unstable political situation is one of the vital reasons for not achieving the

expectation in export.

ii. Problems of port (both sea and air) hinder the timely export.

iii.

Irresponsibility of customs officers is a regular phenomenon which results in

increase on the price and cost of medicine.

iv. Sometimes competition tends to follow unfair promotional activities.

v. Still now, the products of the pharmaceuticals industries of Bangladesh are not

world class.

8.

Prospects of export

i. Competition is increasing the quality of medicinal products.

ii. For surviving in the future, competitive environment is necessary.

iii. Competition reduces monopolistic attitude of the firms. As a result, the customers

will be benefited by getting quality products.


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iv. Export brings foreign currencies for the country which is helpful for the reserve of

the country.

9. Problems of Customer Choices

i. One main problem is in producing rare drugs foreign companies are ahead of us in

terms of quality, experience and market share.

ii.

Most of the time, to purchase the medicinal products is not depending on the

customer choice. Customers buy their product according to the prescription of

doctors.

10.Prospects of Customer Choices

i.

By increasing quality, more customers as well as market share can be absorbed.

ii. By producing rare drugs at home, the country can save its foreign exchange.

iii. By extensive promotional activity, customer choice can be driven.

11.Problems of Power Development

i. Like other industries, there is a crucial problem faced by the pharmaceutical

industries that is power generation problem. They are not getting power according

to their demand.

ii. Red-Tapism of govt. offices hinders the development of power generation

sector, where the government is not taking effective actions.

iii. Lack of opportunity to supply the emergency power to smooth continuation of

production in pharmaceutical sector.

12.

Prospects of Power Development

i. By following all the rules and innovating alternative power supply source, this

sector is entering the competitive market.

ii. Pharmaceuticals may open a big door of prospect in the foreign market.


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Gaps in Business Capabil it ies - Good Manuf acturing Practice (GMP)

Good Manufacturing Practice is a set of principles for the manufacture of drugs and active

pharmaceutical ingredients, often backed up by specific regulations and guidelines. It is

abbreviated to GMP or cGMP (current Good Manufacturing Practice). It is necessary for

pharmaceutical firms to implement Good Manufacturing Practice principles and practices in

order to bring the sector in line with international standards. This is necessary for access to

regulated markets, and is required to position Bangladesh as a source of high quality

pharmaceuticals for unregulated and lightly regulated markets.

Gaps in Business Capabilities - Producing APIs

Bangladeshs pharmaceutical sector is making a major strategic move into producing the APIs it

requires, rather than importing them. Concerns about cost and security of supply of APIs are

important concerns behind this move. Some of the leading firms in the sector already have some

APIs in production, and are investing heavily in process development to produce more. More

companies will need API-related capabilities, and many of those that already have significant

strengths will need to further strengthen their capabilities. Bangladeshs Board of Investment

indicates that Bangladesh imports about 80 percent of its APIs, implying that it produces about

20 percent itself.

Gaps in Business Capabilities - Export Marketing, Product Management,

Channel Management

The Bangladesh pharmaceutical sector has significant strengths in marketing, but its experience

is mainly in the domestic market. It mostly sells directly to pharmacies, so experience with

managing distribution channels operated by other businesses is limited. While firms in the sector

sell to a number of export markets, their involvement in the market is most often quite distant

selling to an agent or distributor that takes full control over marketing and distribution of the

products in-country, and passes very little information back to the Bangladesh supplier. It may be

preferable for the Bangladesh firm to take lead responsibility for sales and marketing. At a

minimum, it will be necessary for the Bangladesh firm to have an involvement in setting or


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approving market strategies, including pricing strategies, to ensure they are aligned with the

Bangladesh firms interests, and to ensure that the benefits of low factory gate prices do not only

accrue to an agent or distributor.

Gaps in Business Capabilities - Clinical Trials

Clinical trials are important to the future of the sector for two reasons:

1. The large numbers of generic drugs requiring testing for regulatory approval will generate a

substantial demand for bioequivalence testing from the Bangladesh pharmaceutical sector. A

base of local suppliers of bioequivalence laboratory services could supply this service at lower

cost than international competitors.

2. Clinical trials represent an enterprise development opportunity in their own right. India has

become a major global player in this part of the pharmaceutical value chain, based on

characteristics (large population, low costs, lack of universal access to high quality medical

services) that are shared with Bangladesh to a significant extent. There may be room for

Bangladesh to become a significant player too. So far, Bangladeshs clinical trials sector is small.

Even if it only to service the need for bioequivalence testing, it will need stronger capabilities.

Types of Skills Needed

Good Manufacturi ng Practice (GMP)

A programme to implement Good Manufacturing Practice in a pharmaceutical firm has

implications for skills throughout its manufacturing operations.

It reshapes the work involved, thereby modifying skills needs, in all major production related

Occupations, notably including:

Operatives and production technicians

Laboratory technicians

Production managers

Chemists and pharmacists

Engineers (production, chemical, mechanical, electrical, software/computer/automation

etc.)


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Quality assurance and documentation specialists

Producing APIs

The main skills associated with each of the main business capabilities associated with APIs are:

Process development: High level skills in chemistry and pharmacy, from bachelor degree

to PhD level, with a need for support from chemistry technicians.

Process scale-up: More high level skills in chemistry and pharmacy, from bachelor

degree to PhD level, plus chemical engineers, again supported by chemistry technicians.

Process plant design and installation: Engineers and technicians from a range of

engineering disciplines, including chemical engineering, mechanical engineering,

electrical engineering, software/electronic/automation engineering and instrumentation

engineering.

Process operation: Skilled operatives and production technicians, laboratory technicians,

chemists, pharmacists, production supervisors/team leaders, quality assurance and

documentation specialists and production managers. As activity should increase

substantially in all these areas, demand for all these types of skill should be strong.

Export Marketing, Product Management, Channel Management

The need here is for marketing and sales skills at a variety of levels, from call centre staff

to process orders and deal with routine issues to senior executives capable of setting international

marketing strategies, running effective international sales and marketing operations, and

establishing and managing relationships with agents and distributors in international markets.

There will be a significant requirement for marketing professionals with skills in export

marketing, product management and channel management. All of these will require some

specialist expertise in pharmaceuticals, with product managers needing significant knowledge of

pharmaceutical sciences, healthcare and regulatory affairs as well as marketing.

Implications for types of skills needed - Clinical Trials

Major areas of skill in clinical trials include:


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Clinical trials managers

Statisticians

Scientists (various branches of the human health sciences)

Regulatory affairs professionals

Projected Skill Demand Versus Current Supply

Recruiting New Workers

Despite pharmaceuticals in Bangladesh being positioned as a low cost sector relative to

its international peers, within Bangladesh it is an attractive employer that offers good pay and

stable employment, at least among medium sized and large firms. It allows university graduates

to make good use of their skills and knowledge, and offers good opportunities for career

development. Larger firms are positioned better than smaller firms to attract the best people, and

to provide training to address skills deficiencies, so smaller firms face more pressing skills

challenges.

The main hiring difficulties highlighted by large firms are in recruiting for high level

management positions. This is a fairly common feature of fast-growth industries in economies

that are developing rapidly they have not had the opportunity to build up a base of high level

talent. Larger firms are able to recruit people from the best institutions, and with the best

academic records. As they have the capacity to provide appropriate training to their people.For the very highly skilled people required people with a good quality PhD and/or with

long industry experience sources in the sector suggest that Bangladeshs diaspora includes

significant numbers of such people, and that many of them are interested in moving home if a

good opportunity appears. This would be consistent with the experience of other countries with a

history of high skilled emigration, where returning emigrants have made an important

contribution to the development of their sector. A well-known example is in the Indian

information technology sector, where studies have found many professionals moving to the US

after graduation, and returning to India later in their career.

Skills of Existing Workers

Barriers mentioned by large companies include: scarcity of skilled and competent

trainers; limited budgets for human resources development; slow adaptability of workers; lack of

good infrastructural facilities for training and development; indifference of managers; lack of a


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standard compensation policy with a company; lack of availability of appropriate vocational

training provision; and people being very busy with their existing workload. All of the large

companies consulted provide necessary training. Multinational companies have global trainers,

resources and modules, but local companies are constrained by a lack of resources.

Medium sized companies consulted are broadly satisfied with the skills of their existing

workforces, but see a need for more training in GMP (Good Manufacturing Practice), product

development, compliance and regulatory management. Key areas where they would like to

improve include improving selling skills, improving management skills and developing the

capacity of employees in technical areas. Barriers to achieving improvement they identify

include: scarcity of skilled and competent trainers; limited financial capacity to fund extensive

training; risk that trained employees will move to a different employer; insufficient pre-existing

technical knowledge and training; and concerns about the possible business impact of unethical

practices in the sector. All of the medium sized companies consulted provide suitable training,

but there is lack of suitable trainers in the market.

Small companies consulted are not satisfied with the skills of their existing workforces.

Key areas where they would like to improve include sales management, operations productivity

and technology skills. Barriers they identify include lack of financial resources, lack of qualified

trainers and lack of skilled management. All companies consulted provide suitable training, but

say there is a lack of suitable trainers.

Pharmaceuticals in 2013:

According to International Marketing Services (IMS), Bangladesh's domestic pharmaceuticals

market grew nearly 13% to $250m in 2013.

In addition, per the Commerce Ministry's Export Promotion Bureau (EPB), Bangladesh now

exports to about 85 countries including Austria, Denmark, the UK, Germany, France, Singapore,

Indonesia, Vietnam, the Philippines, Brazil, Pakistan, Burma and Yemen.

According to the DGDA, 194 of 275 government-registered pharmaceutical companies regularly

produce items like cough syrup and flu tablets. Square, Incepta, Beximco, Acme, and Eskayef

account for 45% of Bangladesh's total production, manufacturing products for export in state-of

the-art factories. Companies like the UK's GlaxoSmithKline, Switzerland's Novartis and France's


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Sanofi have set up plants producing life-saving vaccines, anti-cancer drugs and other high-end

products in Bangladesh. Future forecasting is given as belows:

Pharma exports rose around 24 percent year-on-year to $59.82 million in fiscal 2012-13 thanks

to a growing demand for Bangladeshi medicines in Southeast Asia, Asia Pacific and Africa.

With an annual two-digit growth rate the Bangladesh pharmaceutical industry is now heading

towards self sufficiency in meeting local demand. There are more than 300 small, medium,

large and multinational companies operating in the country producing around 97% of the total

demand. The sector is the second highest contributor to the national ex-chequer after tobacco and

it is the largest white-collar intensive employment sector in Bangladesh.

Recommendations:

Support from the International Support Organizations /Agencies


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International agencies like ITC, UNIDO, WHO, World Bank etc should extend technical

support through educating the local industry representatives on TRIPS and its potential

benefits. International agencies may also extend technical assistance to Bangladesh

pharmaceutical industry sector for setting up world class Drug Testing Laboratory for

testing of medicines. Multilateral financing agencies should provide soft funds to set-up

plants for producing active pharmaceutical ingredients. External financial support may be

explored for combined water treatment plant for waste management of the proposed

API manufacturing plants.

Support from the Local Authority /Organizations

Relevant agencies like Board of Investment, Export Processing Zones Authority, local

and multilateral Development Finance Institutions and others should be instructed and

assisted by the Ministry of Health and Family Affairs, Government of Bangladesh (GoB)

to undertake immediate measures in this regard. The government should also consider

giving export incentiveto the local pharmaceuticals exporters to be competitive, as the

competing countries have already taken such provisions (India offers cash incentives at

20% and 30% on raw materials and finished products and China also offers huge

incentives to its exporters). Cash incentive should be offered to the exporters of

pharmaceuticals products. Exporters should also be awarded nationally. Incinerator &

Effluent Treatment Plant (IETP) for facilitating waste management and environmentprotection through Central Environmental Treatment Plant

Positive and enabling business environment

Information on importing countries like import procedures, freight components, banking

facilities and addresses of chambers and business associations shall be made available.

Combined efforts should be given by the Ministry of Health and Family Planning, the

Ministry of Commerce, local chambers and trade associations for effective coordination

for export expansion in the overseas.

Medicine export should be emphasized to LDCs than any other countries

Some companies are aggressive to enter the highly regulated overseas markets, such as, USA,

Australia, Europe, Canada, France, and Golf countries. But the practical observation is that

getting export status to those countries requires huge investment in the manufacturing plant

to achieve certification from different international drug regulatory authorities, highly


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sophisticated documentation, and huge initial capital investment. Actually the export volume

to the highly regulated countries will not be easily feasible; rather we can perform pretty well

and can potentially increase our export if the exporters become more attentive to LDCs.

Among 50 LDCs, only Bangladesh has its strong fundamental and modern manufacturing

base, hence we can easily share the drug market of rest of the LDCs. So, considering the

practical situation, the LDCs should be the targeted markets of our pharmaceuticals, of

course, side by side, moderately regulated and highly regulated

Establishing Export cell by the govt./private Consultancy firms may promote Pharma

export:

Government can establish specialized Export Cell to promote exports of pharmaceuticals to

grab and capitalize the huge export opportunities in LDCs. Some private Consultancy firms

having experience and expertise in drug export professionally can be engaged to assist the

pharmaceutical companies who do not have the technical and expertise know-how to go

through the entire process of export, or have lacking in documentation skills or even do not

have the skilled man power to deal with the drug export. Thus, Consultancy firms can play a

significant role to explore export to maximum countries, accelerate export activities, and to

reduce the overall cost of export. Even some small companies having International Marketing

Department (IMD) can explore the benefits of outsourcing by hiring Export Consultants to

reduce its overhead expenditure and make a comparative study of cost-benefit ration to

justify having IMD.

Power Generation: Pharmaceutical companies may take the initiative to generate the

power for continuous supply of electricity.

Advertising cost: It should be reduced and this is necessary to make the marketing

people aware of their profession.


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Documents

Profile of Pharmaceutical Sector in Bangladesh