Pharmaceuticals & API
The Bangladesh Pharmaceutical industry-the emerging Asian hub for generic medicines
Overview
USD 3 Billion + domestic market
Forecasted to surpass USD 6 billion by 2025
Exporting to 100 plus nations
Bangladesh
Advantages of Bangladesh
Growth drivers
- Large domestic market of 169 million people with increasing income and health awareness
- Changing disease profile to life style/non communicable diseases requiring long term treatment and medication such as cancer, diabetes, cardiovascular disease, and other non-communicable disease.
- Rising healthcare cost is helping promote generic medicine around the world. The global generic market is projected to grow at a CAGR of 8% and reach USD 578 billion by 2023.
- Drugs worth more than $150 billion are coming off patent by 2021 and another USD 250 billion by 2023 giving Bangladesh the opportunity for further investment in generic drugs.
- Increasing number of international accreditations received by Bangladeshi firms.
Advantages
- Supportive government policies
- Dedicated Park for API factories to encourage production of API.
- Provision of export subsidy
- Favorable trade policies
- WTO extended patent waiver from TRIPS till 2033 helping Bangladesh to produce patented drugs.
- Duty free access to 52 countries
- Low cost of production
- Medicine price in Bangladesh is currently among the lowest in the world with production cost being 10 to 15% lower neighboring than India/China.
- Qualified human resources with expertise in manufacturing generic drugs
API Production
The government of Bangladesh is strongly encouraging manufacturing of API through various fiscal and export subsidies. The government formulated API Policy in 2018 with a goal to attract investment worth USD 1 billion in API production and reduce import-dependence to 80% by 2032. The policy also aims to raise API export income and create 500,000 jobs by 2032. A dedicated API Park has also been established recently.
Branded generic/patented medicines
Given Bangladesh’s expertise in producing branded/ blockbuster generic drugs, the anticipated patent-cliff will provide a huge opportunity for Bangladeshi producers to expand their production and market of generic drugs. In addition, the Bangladesh can expand its production and exports of patented drugs to LDCs and non-WTO members benefitting from WTO’s extended patent waivers.
Drugs related non-communicable disease (NCDs)
Rapid increase in non-communicable disease among the Bangladeshi population as well global population has been leading to the growing demand for drugs used for the treatment of NCDs. Such drugs for NCDs include anti-cancer, anti-diabetes, vaccines, insulin, etc.
Incentives and Policy
- For 5 API molecules producers will get 100% tax holiday.
- For 3 API molecules producers will get 75% tax holiday.
- Active Pharmaceuticals Ingredients (API) and laboratory reagent producers, registered in Bangladesh will enjoy 100% corporate tax holiday until 2021-22.
- After 2021-22, Active Pharmaceuticals Ingredients (API) and laboratory reagent producers, will further enjoy tax holiday (from 2023-2032) if they could produce API molecules domestically-:
- No AIT will be applicable for API producers on import of chemical compounds (Technical Grade/Chemically pure).
- Firms established between July 1, 2019 and June 30, 2024 are eligible for phased or partial tax exemption from 5 up to 10 years.
- No AIT will be applicable for API producers on import of chemical compounds (Technical Grade/Chemically pure).
Eligible industries
- API and radio-pharmaceuticals,
- Pharmaceuticals,
- Barrier contraceptive and rubber latex.
Conditions
- Paid-up capital of not less than BDT 2 million on the date of beginning of commercial production.
- 30% of the exempted has to be reinvested in the same or other industrial undertakings within one year.
20% export subsidy on exporting Active Pharmaceuticals Ingredients (API) from Bangladesh. 7% export subsidy on exporting pharmaceuticals products. Related Policy
National API/ Laboratory Reagents Production and Export Policy 2018