Pharmaceuticals & API

The Bangladesh Pharmaceutical industry-the emerging Asian hub for generic medicines

One of the most technological advanced industry in Bangladesh, the pharmaceutical industry has transformed itself from an import dependent industry in the 1980s to a self-sufficient one serving the global market. The capacity and expertise of the industry was evident during the COVID-19 pandemic where the industry quickly adapted to the unprecedented challenges and has been fulfilling not only the national demand for COVID related medicines but also the global market. As a beneficiary of TRIPS patent waiver, the Bangladesh pharmaceutical industry is all set to becoming a hub for generic medicines.


Building from strength to strength, the pharmaceutical industry has grown from about $25 million in 1982 to about $3 billion as of June 2020. Driven by the increasing purchasing power of the domestic population, the domestic pharmaceutical market is forecasted to exceed USD 6 billion by 2025 At present the industry is serving 97 percent of the domestic market and exporting to more than 100 countries around the world. The Bangladeshi drug market is dominated by production of branded generic drugs, which account for almost 80% of the drugs produced locally, while patented drugs make up the remaining. Currently, there are 271 Allopathic, 205 Ayurvedic, 271 Unani, 32 Herbal and 79 Homeopathic drug producing companies in the country.

USD 3 Billion + domestic market

Forecasted to surpass USD 6 billion by 2025

Exporting to 100 plus nations

Pharmaceutical industry growth rate (2014-2020)
0 %
Export in FY 20-21
$ 0 M
Year on year export growth
0 %
Export growth rate (2015-2021)
0 %
Contribution to GDP
0 %
Lower production cost than India and China
0 %


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.


  • 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.


  • 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

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