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Strategic marketing and planning to improve pharmaceutical marketing in Bangladesh
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Strategic Marketing and Planning To
Improve Pharmaceutical Marketing In
Bangladesh
A project report submitted to the Department of Pharmacy, University of Asia
Pacific, for partial fulfillment of the requirements for the degree of Master of
Science in Pharmaceutical Technology
Submitted By:
MD. Foysal Fuad Chowdhury
Registration No.: 15207067
Session: Spring 2016
Submission Date: 6th October, 2016
Department of Pharmacy
University of Asia Pacific
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Summary of study
The purpose of this study was to summarize the available evidence of the introduction,
pharmaceutical history & background, strategic planning and other factors influencing
pharmaceutical marketing and export prospects of pharmaceutical sector in Bangladesh. There
are several sectors in Bangladesh on which we can be proud of and undoubtedly, the
pharmaceutical sector is one of these sectors. It is one of Bangladesh’s 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. The domestic market
of Pharmaceutical products in Bangladesh has shown a tremendous growth over the last couple
of years. The success story of Bangladesh pharmaceutical sector is very pleasant. It had to travel
a long way to achieve the present prestigious position in domestic and international markets. By
now, 97% of country’s demand of medicines is produced locally mainly by national
pharmaceutical companies. The pharmaceutical sector of Bangladesh is expanding rapidly and
some companies have already certified by different international regulatory authorities like US-
FDA, UK-MHRA, Australia-TGA, EU, etc. for quality management and quality products
manufacturing. Bangladesh Pharmaceutical Industry is now heading towards self-sufficiency in
meeting the local demand. There are about 460 generics registered in Bangladesh. Out of these
460 generics, 120 are in the controlled category i.e. in the essential drug list. The remaining 340
generics are in the decontrolled category, The total number of brands /items that are registered in
Bangladesh is currently estimated to be 5,300, while the total number of dosage forms and
strengths are 8,300. The pricing and other competitive strategies of pharmaceutical companies
have been altered by revolutionary developments in information technology, new state drug
substitution laws, federal legislation, and the emergence of market institutions that include
health maintenance organizations (HMOs) and pharmacy benefit managers (PBMs). An
important and sometimes overlooked factor that distinguishes one company from another in
the pharmaceutical industry is strategic planning. Bangladesh’s pharmaceutical industry has
tremendous potential to grow and compete in the international market. This is a remarkable
achievement for the Bangladesh pharmaceutical industry as this makes ways for us to export
medicines to the US market known for stringent regulations and quality standards.
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TABLE OF CONTENTS
Serial No. Contents Page No.
1 Introduction
1-4
2 Pharmaceutical background and history 4
2.1 Size of the Bangladesh Pharmaceutical Market and its
Growth
5-6
2.2 The Reasons after Market Growth 6
2.3 Growth Projection 6-7
2.4 Key points of National Drug Policy of 1982 8
2.5 Essential Drugs’ List 8
2.6 The Bangladesh Association of Pharmaceutical Industries 8
3 Drug Regulatory Authorities in Bangladesh 9
3.1
The Directorate General of Drug Administration (DGDA) 9
3.2
The Pharmacy Council of Bangladesh (PCB) 9
4
Local Market Overview 10-13
4.1 Top three leading companies of the country 14-15
4.2 Top Drug Groups 15-16
5 Strategic planning and other factors influencing
pharmaceutical marketing
16-17
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5.1 Industry Size 18-19
5.2 Current Environment 19
5.3 Identification and analysis of the strategic planning,
promotional patterns and factors adopted by leading
pharmaceutical companies in Bangladesh
21
5.3.1 Product, Pricing and Promotion 22-23
5.3.2 Manufacturing and Production Strategy Consulting features 22-23
5.3.3 Complete analysis 24
5.4 Production Pricing 24
5.4.1 Pricing Strategy 25-26
5.4.2 Marketing Strategy and the Marketing Mix 26
5.4.3 Pricing Objectives 27
5.4.4 Penetration pricing 28
5.4.5 Pricing Methods 29
5.4.6 Price Discounts 29-30
6 Competitive strategies of pharmaceutical companies 30-31
6.1 Influential factors on prescription preparation by doctors: a
survey conducted on practicing doctors and medical
representatives in Bangladesh
31
6.2 Materials and Methods 32
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6.3 Results and Discussion 32-33
6.4 Comparative analysis of subjective and objective responses 34-36
7 Export prospects of pharmaceuticals sector in Bangladesh 37-38
7.1 Foreign Markets 38
7.2 International Privilege 38
7.3 Where the industry is right now 38-39
7.4 Export Scenario 39
7.5 Barriers in Export Sector 39-40
7.6 Opportunities in Pharmaceutical Sector 40
7.7 Support needs to buster export 41
8 Market insight: How Bangladesh pharmaceutical sector
performed in 2015
41-42
8.1 Export scenario 42
8.2 Domestic competition 43
8.3 MNCs 43
8.4 Backward integration 44
8.5 TRIPS 44
8.6 Beximco pharma secures FDA approval 44-45
9 Conclusion 45-46
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LIST OF FIGURE
Serial No. Name of Figure Page No.
Figure 1 Bangladesh’s Largest Pharma Companies (by sales) 19
Figure 2 Manufacturing Strategy 22
Figure 3 Manufacturing and Production Strategy 23
Figure 4 Comparative response (in percentage) in consideration of
company image during prescribing medications to patients
34
Figure 5 Comparative response (in percentage) in consideration of
regular promotion during prescribing medications to
patients
34
Figure 6 Comparative response (in percentage) in consideration of
availability of brands during prescribing medications to
patients
34
Figure 7 Comparative response (in percentage) in consideration of
low price of medicine during prescribing medications to
patients
35
Figure 8 Comparative response (in percentage) in consideration of
medical representative’s improvisation during prescribing
medications to patients
35
Figure 9 Comparative response (in percentage) in consideration of
easy brand name during prescribing medications to patients
35
Figure 10 Comparative response (in percentage) in consideration of 36
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international certification of company during prescribing
medications to patients
Figure 11 Comparative response (in percentage) in consideration of
promotional tools during prescribing medications to
patients
36
Figure 12 Comparative response (in percentage) in consideration of
scientific information during prescribing medications to
patients
36
Figure 13 Local Sales (Source: IMS /4th quarter report – data
visuals by EBL Securities)
42
Figure 14 Exports (Source: IMS /4th quarter report – data visuals by
EBL Securities)
42
LIST OF TABLE
Serial No. Name of Table Page No.
Table 1 Healthcare Expenditure as % of GDP 6
Table 2 Bangladesh’s largest Pharma Companies (by sales July’15) 18
Table 3 Pricing Policy (Consulting Buyers) 24-25
Table 4 Market Size, Market Share and Growth of Top Companies 43
Table 5 Market Size, Market Share and Growth of Top MNC’s 43
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1. Introduction
The Pharmaceutical Industry is one of the world’s principal industries owed to worldwide
revenues of around US$2.8 trillion. Pharmaceutical Industry has seen major transforms in the
current years that leave new load on payers, providers and manufacturers. Customers now
demand the same choice and convenience from pharmaceutical industry that they find in other
segment. (Saxena, 2012)
There was hardly any Pharmaceutical enterprise before liberation in Bangladesh (then East
Pakistan). After several years of liberation, the government could not increase budgetary
allocations for the improvement of health sector. At that time, most of the people had little access
to the essential lifesaving medicines. This sector started to improve from 1980s. The
Pharmaceutical Industry has grown in the last two decades at a considerable rate. Today
Pharmaceutical Sector has become an obligatory part of health care system around the world.
Historically pharmaceuticals have played a vital role in the human development by improving
the quality of life and reducing the time spent in the hospitals. Due to its direct link with the
welfare and wellbeing of human beings Pharmaceutical Industry is of strategic importance for
the development of a healthy and productive nation. Today, Pharmaceutical Industry is
considered to be one of the largest and rapidly growing global industries. It is a major source of
employment generation and foreign exchange earnings for many countries around the globe.
(Sesric, 2011)
However, despite all these extraordinary achievements it’s a harsh reality that every year
millions of people die across the world, mostly in low income developing countries, due to
unavailability and inaccessibility of necessary medicines. According to the World Health
Organization (WHO), on average, 30% of the world population lacks access to life-saving
medicines; whereas, in some countries in Asia and Africa, the number may be as high as 50%.
(Roger, 2008)
The domestic market of Pharmaceutical products in Bangladesh has shown a tremendous growth
over the last couple of years. There has been a marked value-wise growth of the market -- at the
rate of 23.59% in 2011 over that of 2010, according to the data released by IMS Health
Bangladesh. According to the IMS, the size of Bangladesh's domestic drug market was $686
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million in 2008, $797 million in 2009, $977 million in 2010, and it reached US $1136 million in
2011.Now in Bangladesh the pharmaceutical sector is one of the most developed hi-tech sectors
within the country's economy. After the promulgation of Drug Control Ordinance 1982, the
development of this sector was accelerated. The professional knowledge, thoughts and
innovative ideas of the pharmaceutical professionals working in this sector are the key factors for
these developments. Due to recent development of this sector it is exporting medicines to global
market including European market. This sector is also providing 97% of the total medicine
requirement of the local market. Leading pharmaceutical companies are expanding their business
with the aim to expand export market. This research may help the exacting authority to be more
watchful about this sector. (Siddique, 2012)
There are several sectors in Bangladesh on which we can be proud of and undoubtedly, the
pharmaceutical sector is one of these sectors. It is one of Bangladesh’s 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.The success story of
Bangladesh pharmaceutical sector is very pleasant. It had to travel a long way to achieve the
present prestigious position in domestic and international markets. By now, 97% of country’s
demand of medicines is produced locally mainly by national pharmaceutical companies. The
pharmaceutical sector of Bangladesh is expanding rapidly and some companies have already
certified by different international regulatory authorities like UK-MHRA, Australia-TGA, EU,
etc. for quality management and quality products manufacturing. Moreover, few companies are
on the road to achieve US-FDA approval. According to the information of the Director General
of Drug Administration of Bangladesh (DGDA), there are 263 Allopathic drug manufacturing
companies in Bangladesh; 209 of which are functional, 29 companies are non-functional and 25
companies are suspended in status. Pharmaceutical export is contributing to the GDP of the
country and every year this contribution is positively growing In the meantime, Pharma sector
has become the 2nd largest potential sector in Bangladesh to earn foreign currency. At present,
about 30 pharmaceutical companies have started their export activities.
Many smaller companies are on the verge of entering highly regulated overseas markets. Bearing
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in mind its successful past endeavors, the industry has the ability to establish itself in mass
exportation. (Anamul and Zahedul, 2011)
The pharmaceuticals sector is a high-technology and knowledge-intensive industry in
Bangladesh. The industry has two-tier structure. The largest firm accounts for the majority of the
R&D investment in the industry and hold the majority of patents. There are a large number of
smaller firms producing mostly for local markets. The pharmaceuticals industry is heavily
regulated. Once a product is brought to market, pharmaceuticals companies spend heavily on
marketing and promotion. The larger drug companies maintain a large sales force, which makes
direct regular contact with individual prescribing physicians and other pharmaceuticals decision
makers. The money spent on marketing is huge. Pharmaceuticals marketing efforts are not only
directed at physicians and consumers; drug companies have also sought to directly influence
pharmacist, in some cases paying pharmacist to induce customers to change their drug
consumption habits.
The nature of competition in this industry differs between the two sets of firms. The second tier
of firms holds fewer patents and relies primarily on manufacturing off patent generic medicines
or patent medicines under license. Competition between these firms takes the conventional form
of competition on price, cost efficiency and quality. In contrast, a few large research-based
pharmaceutical companies invest heavily in R&D and hold the bulk of the patents, and can often
enjoy substantial market power while these patents are in force. For these companies,
competition is not primarily on the basis of price, but rather on the basis of marketing and
innovation. These companies compete to develop entirely new drugs which treat new medical
conditions, improve upon existing drugs, or serve as substitute for existing patented drugs. Some
large pharmaceutical companies in this tier export and compete in international markets.
(Bhuiyan et al., 2014)
The scenario of pharmaceutical industry can be depicted in two parts-before the Drug policy
ordinance, 1982 and after the Drug policy ordinance, 1982. Before the ordinance there were 177
pharmaceutical companies in the country but local production is used to be dominated by
multinational drug companies which manufactured 75% of total production. 25 medium sized
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national companies manufactured about 15% of total production. 133 small local based
companies produced the remaining 10%. The multinational companies were fully armed with
modern technology for producing sophisticated essential drugs, but they were only engaged,
large extent, in formulation of simple drugs including many useless products. At that time, the
unregulated drug market of the country had very little favorable conditions for pharmaceuticals
to over price their products. Near monopoly market conditions mean that local firms could not
compete effectively with these multinational market tycoons.
A great change was noticeable in the pharmaceutical industry after the drug policy ordinance of
1982. The total national production of pharmaceuticals has risen by a substantial 63%; the value
of essential drugs made in national factories has gone up to 140% over the four years. At present
there are around 300 national & multinational based pharmaceutical companies in Bangladesh.
(Sarker, 2011)
2. Pharmaceutical background and history
With a history since 1950s pharmaceutical industry has gone through noteworthy changes. This
industry was largely conquered by multinational companies, and it was very much reliant on
import. A defined rule for the development of the industry was formed through the formulation
of national drug policy, and drug control ordinance in 1982. Next to follow by, MNCs dominated
the market 75% and 133 local firms shared the rest one. Since then, the local firms have
recognized a stronger footing, and Bangladesh has become a vigorous exporter from import
dependent country. (Haroon, 2012)
2.1 Size of the Bangladesh Pharmaceutical Market and its Growth
The size of the retail market reached BDT 84.0 billion (US$ 1.136 billion) as on 2011 based on
IMS health Bangladesh (Haroon, 2012). The report additionally stated that, retail sales in
domestic market achieved 23.59% growth in 2011 which is following 23.8% and 16.8% growth
in 2010 and 2009 respectively. This industry has an annual growth rate of 10.2% during the
fiscal year 2002. The values fell by 4.3% in 2003. The lower growth rate showed in 2003 and
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2004 is largely because of country’s economic recession. Again the growth rate increased by 9%
in 2005. The growth rate of 2005 was 17.5%. In recent times the growth rate has been literally
doubled which is 23.59% in 2011.Recently published Bangladesh Pharmaceutical Index,
3Q’2011 shows that Bangladesh has a tk. 8,000 Cr market. And there are no multinational
companies in top ten lists of pharmaceutical companies. Local manufactured medicine is playing
important role to drive doctor prescription for strong pharmaceutical marketing skill and
product quality. There are only about 20% people in rural area are receiving nursing and medical
care parting the rest of the rural market utilizable because there is a big market lying ahead of
the existing market in the rural areas. The market will be engorged automatically when the
whole population will be under healthcare. It is likely that the total market size (including rural
market) is projected to be over BDT 90.0 billion at nearby. (Haroon, 2012)
2.2 The Reasons after Market Growth
The following datas shows some selected health indicators for Bangladesh. Most of the
indicators improved over the last decade which is among some of the factors that contributed to
the growth of the sector.
There has been an ongoing demographic move - life expectancy improved from 64.7 in
2000 to 68.94 in 2011 which to see the amplified health awareness among the people.
Also the income level of the population increased over the last decade which allowed
them to spend more for healthcare.
The foundation was also stumpy as healthcare expenditure was less than 3% of GDP in
2000 with total pharmaceutical sector size of BDT 24.5 billion only in that year and now
it is 3.72% with a sector size of BDT 84 billion in 2011.
Emergence of Private sector contribution. In the year of 2000 it was 1.72% of the total
GDP but now it has become 2.36% of the total GDP in 2011. A number of top category
hospitals in progress operating which includes Apollo Hospitals, Square Hospitals,
United Hospitals and others. Due to their quality service these hospitals became very
admired with the mass population; they have been a chief issue contributing to increased
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healthcare expenditure.
Development in private expenditure was the most important reason behind fall in public
% of expenditure as can seen a rise in a descending order in expenditure of the public
healthcare expenditure as a % of total healthcare expenditure from the last decade, there
has been increased expenditure in absolute terms which is from 39% in the year of 2000,
again a drop in 2005 at 34.9% and at last a modest climb in 2011 which is 36.58%.
Health expenditure per capita almost tripled in the last decade from 9.1 to 27, indicating
people’s compliance to spend more to stay healthy. Over the last decade income base of
the population has been upward. (Habib and Alam, 2011)
2.3 Growth Projection
Table 1: Healthcare Expenditure as % of GDP
Region 2011 2010 2009 2005 2000
USA 17.9% 17.6% 16.21%
14.72% 13.41%
World 10.1% 10.0% 10.03% 9.73% 9.23%
UK 9.3% 9.6% 9.34% 8.25% 7.04%
Japan 9.3% 9.2% 8.35% 8.16% 7.69%
Afghanistan 9.6% 10.4% 7.36% 8.76% 8.29%
Nigeria 5.3% 5.4% 5.82% 6.60% 4.56%
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Nepal 5.4% 5.1% 5.81% 5.91% 5.06%
Thailand 4.1% 3.9% 4.31% 3.55% 3.40%
India 3.9% 3.7% 4.17% 4.03% 4.61%
Bangladesh 3.7% 3.7% 3.35% 3.21% 2.82%
Sri Lanka 3.4% 3.5% 3.96% 4.04% 3.72%
Pakistan 2.5% 2.8% 2.62% 2.78% 3.02%
Table shows that comparison of Bangladesh with other neighboring countries and also with
some other developed countries in terms of healthcare expenditure as a % of GDP. Bangladesh is
a way below the list of countries except Sri Lanka and Pakistan.
Bangladesh has achieved 6.7% GDP growth rate over the last decade. With a vision to
attaindouble-digit growth within 2018, the current government has set target to achieve a higher
growth rate. So, it is expected that the actual growth rate in GDP will be 7% within 5 years and
the healthcare expenditure is expected to be more than that estimated value of around 17%. Now,
the retail Pharmaceutical market size is about 1% of GDP and health expenditure is about 3.7%
of GDP. As a result, the Pharmaceutical sector revenue accounts for almost 30% of the
healthcare expenditure. If this situation continues over the coming five years, pharmaceutical
revenue will also mature at par at 16.67% annually over the next five years. (Habib and Alam,
2011)
The pharmaceutical sector is one of the thrust sectors in Bangladesh. Before Liberation, there
was hardly any pharmaceutical enterprise in Bangladesh (then East Pakistan). After several years
of liberation, the government could not increase (in relative terms) budgetary allocations for the
improvement of health sector. At that time, most of the people had little access to the essential
lifesaving medicines. This sector started to improve from 1980s. The pharmaceutical industry
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has grown in the last two decades at a considerable rate.
Right after liberation war three fourth of the pharmaceutical industries was dominated by
multinational companies. The National Drug Policy (NDP) in 1982 and 2005 has major impact
in the development and growth of the Bangladesh pharmaceutical industry.
The need for NDP was very evident. Almost all the multinational companies were producing
simple and non-essential drugs in Bangladesh like vitamins mixture or cough syrups. They used
to import their raw materials from abroad at high prices. (Habib and Alam, 2011)
There was a need for vast quantity of essential, useful and economic drugs in Bangladesh. It was
essential and important for Bangladesh to introduce a drug policy for the betterment of national
health by availing international standard medicine in lower cost to Bangladeshi people. Precisely,
multinational companies were prevented to reduce their unessential drugs production and
discouraged to import raw material at high process. (ShariatUllah and Razzak, 2006)
2.4 Key points of National Drug Policy of 1982:
To provide administrative and legislative support for ensuring quality of essential drugs
which are relevant to the national health need.
To reduce the price of medicine by ensuring the lowest competitive price.
To eliminate non-essential medicine from the market.
To promote production of local drug and raw materials.
To develop proper drug monitoring and information system to prevent wasteful misuse
and to ensure the proper utilization of the drugs.
To ensure GMP and qualified pharmacist in manufacturing companies.
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As NDP 1982 implemented, most multinational companies sold their business to local
pharmaceutical. This fueled to the evolution of the local pharmaceutical sectors. According to
the Directorate General of Drug Administration (DGDA) website, the value of the locally
produced drug was 175 crore in 1981 that increased to 325 crore by 1985. (ShariatUllah and
Razzak, 2006)
2.5 Essential Drugs’ List: Under the Drug (Control) Ordinance 1982, the Government
determines Maximum Retail Prices (MRP) of 117 essential drug chemical substances. This price
determination is only for the local producer companies and still now the multinational
organizations are determining their price by their own way.
2.6 The Bangladesh Association of Pharmaceutical Industries – BAPI: BAPI, (Bangladesh
Aushad Shilpa Samity in Bengali), established in 1972 with just 33 members, has been playing a
very vital role for development of this sector. Today, BAPI is a very strong organization having
as many as 144 companies as its members.
3. Drug Regulatory Authorities in Bangladesh
A regulatory agency is a public authority or government agency responsible for exercising
autonomous authority over some area of human activity in a regulatory or supervisory capacity.
An independent regulatory agency is a regulatory agency that is independent from other branches
or arms of the government. Two organizations regulate drugs and pharmacies in Bangladesh, one
governmental and one semi-government, which are:
The Directorate General of Drug Administration (DGDA)
The Pharmacy Council of Bangladesh (PCB)
3.1 The Directorate General of Drug Administration (DGDA): DGDA is the drug regulatory
authority of Bangladesh, which is under the Ministry of Health and Family Welfare. DGDA
regulates all activities related to import and export of raw materials, packaging materials,
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production, sale, pricing, licensing, registration, etc. of all kinds of medicine including those of
Ayurvedic, Unani, and Herbal and Homoeopathic systems.
3.2 The Pharmacy Council of Bangladesh (PCB): PCB was established under the Pharmacy
Ordinance in 1976 to control pharmacy practice in Bangladesh.
The Bangladesh Pharmaceutical Society is affiliated with international organizations
International Pharmaceutical Federation and Commonwealth Pharmaceutical Association. The
National Drug Policy (2005) states that the WHO’s current Good Manufacturing Practices
(GMP) should be strictly followed and that manufacturing units will be regularly inspected by
the DDA. Other key features of regulation are restrictions on imported drugs; a ban on the
production in Bangladesh of around 1,700 drugs which are considered non-essential or harmful;
and strict price controls, affecting some 117 principal medicines.
The pharmaceutical industry in Bangladesh is one of the most developed hi-tech sectors within
the country's economy. In 2000, there were 210 licensed allopathic drug-manufacturing units in
the country, out of which only 173 were in active production; others were either closed down on
their own or suspended by the licensing authority for drugs due to non-compliance to good
manufacturing practices or drug laws. Now about 300 pharmaceutical companies are operating at
the moment. The industry manufactured about 5,600 brands of medicines in different dosage
forms. There were, however, 1,495 wholesale drug license holders and about 37,700 retail drug
license holders in Bangladesh.
After the promulgation of Drug Control Ordinance - 1982, the development of this sector was
accelerated. The professional knowledge, thoughts and innovative ideas of the pharmaceutical
professionals working in this sector are the key factors for this development. Due to recent
development of this sector, the industry is exporting medicines to global markets, including the
European market. This sector is also providing 97% of the total medicine requirement of the
local market. Some of the companies produce insulin, hormones, and anticancer drugs, which
were not previously produced in Bangladesh. Leading pharmaceutical companies are expanding
their business with the aim to expand into the export market. Recently, a few new industries have
been established with high tech equipment and professionals to enhance the strength of this
sector. (Bhuiyan et al., 2014)
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4. 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).
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. Out of the top ten
pharmaceutical companies in Bangladesh, all are local pharmaceutical companies. The top two
domestic manufacturers, namely Square and Incepta Pharma are having a combined market share
of more than 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. Association's member include large,
medium, small, national and foreign companies who together are responsible for manufacturing
97% of the country's pharmaceutical production. (Bhuiyan et al., 2014)
Here are the names of the pharmaceutical companies of Bangladesh:
Square Pharmaceuticals
Incepta Pharmaceuticals
Beximco Pharmaceuticals
Opsonin Pharma
Renata
Eskayef Bangladesh
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ACI
Acme Pharmaceutical
Aristopharma
Drug International
Sanofi-Aventis Bangladesh Ltd
GlaxoSmithKline(GSK) Bangladesh Limited
Orion Pharma Ltd
Novo Nordisk
Healthcare Pharmaceuticals Limited
General Pharmaceuticals Ltd
Sandoz (generic pharmaceuticals division of Novartis)
Popular Pharmaceuticals Ltd. (PPL)
Novartis (Bangladesh) Limited
IBN SINA Pharmaceutical Industry Ltd. (IPI)
Nuvista Pharma Limited
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UniMed UniHealth Pharma Ltd
Sun Pharmaceutical (Bangladesh) Ltd
Globe Pharmaceuticals Ltd
BIOPHARMA Ltd
Roche Bangladesh Ltd
Radiant Pharmaceuticals Ltd
Pacific Pharmaceuticals Ltd
Jayson Pharmaceuticals Ltd
BEACON Pharmaceutical Limited
Social Marketing Company (SMC)
Orion Infusion Ltd
Kemiko Pharmaceuticals Ltd
NAVANA Pharmaceuticals Ltd
Delta Pharma Ltd
Servier Bangladesh
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SOMATEC Pharmaceuticals Ltd
Rangs Pharmaceuticals Ltd
Libra Pharmaceuticals Ltd
ALCO Pharma Ltd
Apex Pharma Ltd
Pharmadesh Laboratories Ltd
Silva Pharmaceuticals Ltd
Medimpex Bangladesh
Edruc Limited
Ziska Pharmaceuticals Ltd
White Horse Pharmaceuticals
RAK Pharmaceuticals Pvt. Ltd
Asiatic Laboratories Ltd
4.1 Here is a brief description of top three leading companies of the country:
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Square Pharmaceuticals Ltd.: It is a public limited pharmaceutical company based in
Bangladesh. It is part of the SQUARE Group of Companies. The company was founded in 1958
by Samson H. Chowdhury along with three of his friends as a private firm. It went public in
1991 and is currently listed on the Dhaka Stock Exchange. Square Pharmaceuticals Ltd., the
flagship company, is holding the strong leadership position in the pharmaceutical industry of
Bangladesh since 1985 and it has been continuously in the 1st position among all national and
multinational companies since 1985. Square Pharmaceuticals Ltd. is now on its way to becoming
a high performance global player. (Siddique, 2012)
Incepta Pharmaceuticals Limited: This is a pharmaceutical company based in Dhaka,
Bangladesh, which manufactures and markets medicinal drugs in a variety of therapeutic
classes. Incepta Pharmaceuticals Ltd. is one of the leading pharmaceutical companies in
Bangladesh established in 1999. The company has a very big manufacturing facility located at
Zirabo, Savar, 35 kilometer away from the center of the capital city Dhaka. Since its inception
Incepta has been launching new and innovative products. The company produces various types
of dosage forms which include tablets, capsules, oral liquids, ampoules, dry powder vials,
powder for suspension, nasal sprays, eye drops, creams, ointments, lotions, gels, prefilled
syringes, liquid filled hard gelatin capsules, lyophilized injections, human vaccine etc. Beyond
the manufacture of medications, Incepta also conducts research and development in order to
fulfill unmet demand of the medical community. The company sells its products in Bangladesh
and also started to begin exporting to both developed and developing countries around the world.
(Siddique, 2012)
Beximco Pharmaceuticals Ltd: Beximco Pharma, is a part of the Beximco Group of
Companies. Beximco Pharma was founded in 1976 and started operations in 1980,
manufacturing products under the licenses of Bayer AG of Germany and Upjohn Inc. of USA.
It has now grown to become a leading pharmaceutical company in Bangladesh, and it supplies
more than 10% of country's total medicinal needs. Today Beximco Pharma manufactures and
markets its own branded generics for several diseases including AIDS, cancer, asthma,
hypertension, and diabetes for both national and international markets. Beximco Pharma
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manufacturing facilities are spread across a 20-acre (81,000 m2) site located in Tongi,
Bangladesh. The facilities consist of a number of purpose-built plants, including a new Oral
Solid Dosage (OSD) plant. The site includes manufacturing facilities as well as a research
laboratory and a number of warehouses. The plant and machinery of the facilities were designed,
produced and installed by partners from Germany, Switzerland, Sweden, Italy and the United
Kingdom, amongst others. (Siddique, 2012)
4.2 Top Drug Groups
Proton-pump inhibitors (PPIs): These are a group of drugs whose main action is a pronounced
and long-lasting reduction of gastric acid production. They are the most potent inhibitors of acid
secretion available. The group followed and has largely superseded another group of
pharmaceuticals with similar effects, but a different mode of action, called H2-receptor
antagonists. These drugs are among the most widely sold drugs in Bangladesh, and are generally
considered effective. (Sarker, 2011)
These drugs are used in the treatment of many conditions, such as:
• Dyspepsia
• Peptic ulcer disease
• Gastroesophageal reflux disease (GERD or GORD)
• Laryngopharyngeal reflux
• Barrett's esophagus
• Eosinophilic esophagitis
• Stress gastritis prevention
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• Gastrinomas and other conditions that cause hypersecretion of acid
• Zollinger-Ellison syndrome
Specialty professional organizations recommend that people take the lowest effective dose
possible to achieve the desired therapeutic result when using proton pump inhibitors to treat
gastro esophageal reflux disease long-term.
Antibiotics: An antibiotic is an agent that either kills or inhibits the growth of a microorganism.
These include, for example, the beta-lactam antibiotics, which include the penicillins, the
cephalosporins, and the carbapenems, aminoglycosides, sulfonamides, the quinolones, and the
oxazolidinones.
Antipyretics: These are drugs that reduce fever. Antipyretics cause the hypothalamus to
override an interleukin-induced increase in temperature. The body then works to lower the
temperature, resulting in a reduction in fever. Most antipyretic medications have other purposes.
The most common antipyretic in Bangladesh is Paracetamol. Non-steroidal anti-inflammatory
drugs (NSAIDs) are antipyretic, anti-inflammatory, and pain relievers.In Bangladesh there has
been huge demand for PPIs, antibiotics and anti-pyretics. Thus these drugs comprise the top ten
pharmaceutical products for the country. The recent IMS data exhibits the top ten medicines for
Bangladeshi market. (Sarker, 2011)
5. Strategic planning and other factors influencing pharmaceutical marketing
In Bangladesh Pharmaceutical sector is one of the most developed hi tech sector
which is contributing in the country's economy. After the promulgation of Drug
Control Ordinance - 1982, the development of this sector was accelerated. The
professional knowledge, thoughts and innovative ideas of the pharmacists working in
this sector are the key factors for this development. Due to recent development of this
sector we are exporting medicines to global market including European market. This
sector is also providing 95% of the total medicine requirement of the local market.
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Leading Pharmaceutical Companies are expanding their business with the aim to
expand export market. Recently few new industries have been established with hi tech
equipments and professionals which will enhance the strength of this sector.
There are several sectors on which Bangladesh can be proud of and undoubtedly the
pharmaceutical sector is one of these sectors, rather it is the sector, which is the
second-largest contributor to the government exchequer. There are about 231 companies in
this sector and the approximate total market size is about Taka 76,500 million per year of which
about 94% of the total requirement of medicines is created by the local companies and the rest
6% is imported. The imported drugs mainly comprise of the cancer drugs, vaccines for
viral diseases, hormones etc. (Rahman, 2015)
Bangladesh Pharmaceutical Industry is now heading towards self-sufficiency in meeting the
local demand. The industry is the second highest contributor to the national exchequer after
garments, and it is the largest white-collar intensive employment sector of the country. There
are about 460 generics registered in Bangladesh. Out of these 460 generics, 120 are in the
controlled category i.e. in the essential drug list. The remaining 340 generics are in the
decontrolled category, The total number of brands /items that are registered in Bangladesh is
currently estimated to be 5,300, while the total number of dosage forms and strengths are 8,300.
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 75%, while the MNCs are having a market share of
25%. (Sarker, 2015)
The total industry can broadly be classified into two categories. These are-
a) Patent Medicines
b) Generic Medicines
Patent medicines are the products that are invented by the company, who have their
own research team working on their own laboratories. These products are patented for many
years to enjoy the monopoly market. After years of business the formulation is sold in the
market so that others can go into mass production.
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Generic medicines are the products that are produced in mass scale. These are
marketed by several companies under different brand name, where the formulation of this
product is almost same. Prices of the products are under this category are competitive.
Bangladesh mainly concentrates on this category, as labor cost is one of the lowest in the
world.
5.1 Industry Size
According to a June 2011 Business Monitor International (BMI) report, Bangladesh had a
domestic pharma market worth BDT 59,330.7 million in 2010(US$ 858 million, Islamic Dinars
550.6 million - a unit of the Islamic Development Bank.) Most significantly, the growth
rate and investment environment has been deemed highly attractive.
The Bangladeshi Pharmaceutical Market is heavily retail oriented, with the bulk of distribution
undertaken by the companies themselves, leaving wholesalers to play a limited role. (Sarker,
2015)
Table 2: Bangladesh’s largest Pharma Companies (by sales July’15)
Top 10 Company
Sales in Million
Square $ 138.7
Incepta $ 52.1
Beximco $ 49.0
ACME $ 36.3
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Eskayef $ 32.1
ACI $ 31.3
Opsonin $ 29.7
Renata $ 29.1
Aristropharma $ 28.8
Drug International $ 23.4
Figure 1: Largest Pharma Company, Source: IMS Health
The size of the market maybe small by global standards but numerous factors mask the true
size and potential for growth of the domestic pharma industry.
Volatility in exchange rates against foreign currencies render valuation of
domestic market size expressed in those foreign currencies meaningless.
The general population in Bangladesh often seeks relief from ailments through
traditional herbal medicines especially when allopathic treatments are
comparatively expensive or out of reach.
Some estimates put the size of the domestic traditional medicines market at a
quarter of the allopathic pharmaceuticals market which means the size of the actual
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medicinal market could be worth Islamic Dinars 705.9 million (US$1.1
billion). (Sarker, 2015)
5.2 Current Environment
5.2.1 Drug makers Maintain Strong Growth –
The pharmaceutical industry is expected to maintain above-average earnings growth through
the end of the decade. IN the past ten years, the pharmaceutical market has doubled its
growth, reaching a total audited value of 932 million US dollar in the third quarter of 2015.
(Rahman, 2015)
Key global pull factors fueling this growth include:
Rapid expansion in the older segments of the population; Increasing life expectancies;
Large untreated patient populations;
Large markets overseas, especially in developing nations.
Key global push factors of growth are presented by:
Increased direct-to-consumer advertising and electronic commerce;
Industry-friendly regulatory environment;
Influence of the managed health care.
These positive fundamentals should more than offset the negative effects of:
Negative foreign exchange fluctuations;
Tightened utilization trends in Western Europe and Japan;
Rising tax rates. (Rahman, 2015)
5.2.2 Growth and Trends -
The growth potential of pharmaceutical industry is enormous. As urban population is
increasing and people are getting educated, they are now more concerned about healthcare.
So the demands of medical products are rising. In Bangladesh unhygienic conditions and
poor health maintenance plans provide vast scope for the pharmaceutical firms to sell
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their products. On the other hand, the constant natural disasters provide opportunities
to this pharmaceutical company to boost its sales. (Rahman, 2015)
5.2.3 Industry Segmentation by Distribution –
Three-quarters of industry sales consist of pharmaceuticals used in outpatient settings, with the
balance administered in hospitals, nursing homes, and other inpatient facilities. About 70%
of prescribed drugs is distributed through wholesalers to hospitals, health maintenance
organizations (HMOs), and retail pharmacies. The remaining 30% is sold directly by
manufacturers to physicians, hospitals, retailers, and others. (Rahman, 2015)
5.2.4 Demand –
Bangladesh is prone to tropical diseases, and this leads to a high demand for
pharmaceutical goods. Because of this and the poor health and hygiene situations, a
steady growth in the pharmaceutical sector is possible. Demand is positively related to
the changes in disposable income. Assuming that income per capita will continue to
increase, it may be predicted that the demand for pharmaceuticals will also continue
to rise. Dhaka is the largest contributor, with nearly 45% market share. Chittagong and Sylhet
follow with 36% market share each. Khulna has a much smaller share of 19%,
but it has an immense growth potential because of the higher value sales per chemist. Dhaka
also has the highest per capita expenditure on drugs. Studies have shown that people in urban
areas tend to consume more pharmaceutical products compared to people living in rural areas.
Urbanization is steadily increasing in Bangladesh, as more and more people move in
from rural areas to live in Dhaka and the other cities. Because of the increased
frequency in natural disasters, people prefer to live and work in cities other than in
villages. This bears a direct impact on the volume of sales of the The Acme
Pharmaceuticals Ltd. As more people are living in relatively developed areas, the
demand for medicine is also rising. This provides a great opportunity for the company
to increase their sales. (Rahman, 2015)
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5.3 Identification and analysis of the strategic planning, promotional patterns and factors
adopted by leading pharmaceutical companies in Bangladesh
5.3.1 Product, Pricing and Promotion:
With growth back at the top of the agenda, particularly in large advanced economies, companies
face a reckoning as they run up against mismatches between the operations they have wrung
costs out of, and their growth objectives.
What's more, due to greater attendant process adaptability, emerging production technologies
portend the long-anticipated era of mass customization. This transition depends on
mainstreaming technologies that can dramatically improve process versatility — that is, the
ability to cost-effectively manage the complexity that comes with multiple process
specifications. (Mintzes and Barbara, 1999)
Figure 2 : Manufacturing Strategy
Now, learn more about key competencies among the top firms serving this complex, and
increasingly important, specialty with Kennedy's in-depth study. The research clearly illustrates
each leading Manufacturing and Production Strategy consulting firm's core competencies,
strengths and weaknesses, while providing detailed analysis across geographic regions,
competitive groups, and go-to-market challenges. The study also includes a real-world
engagement study from PwC. (Mintzes and Barbara, 1999)
5.3.2 Manufacturing and Production Strategy Consulting features:
The Kennedy Vanguard™ of Manufacturing and Production Strategy Consulting Providers,
featuring the strongest consultancies, assessed on relative breadth and depth of firms' capabilities
within the overall service area. (Mintzes and Barbara, 1999)
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Engagement Case Study: PwC Helps an Advanced Technology Engineering Group Revise Its
Manufacturing Strategy.
Consulting Provider Profiles, detailing key service strengths and weaknesses, firm focus, AND
Capability Maps illustrating each practice's standing with respect to:
Strategic Drivers
Footprint and Scope
Operational Excellence
Production Technology
Strategy and Structure
Capabilities and Resources
Modeling Tools
Experience and Transformatio
Example: Provider Competency Strengths: Manufacturing and Production Strategy
Legend Very Strong Strong Moderate Weak None
Figure 3: Manufacturing and Production Strategy
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Manufacturing and Production Strategy Consulting is organized by: Key
Geographic Region
Asia Pacific
Europe, Middle East and Africa (EMEA)
Latin America
North America
Competitive Groups
Business and Technology
Multi-Service
Strategy and Operations Management
Niche Strategy and Operations Management
Go-to-Market Challenges
Strategic drivers
Strategy to shop floor
Governance and operating model
Assets and IP
Sector expertise
5.3.3 Complete analysis includes:
Market trends: looks at the key trends and factors affecting growth for services, including the
context, demand drivers, building blocks and enabling infrastructure in the Manufacturing and
Production Strategy consulting marketplace.
Client spending trends and forecasts: details the size of the Manufacturing and Production
Strategy consulting market and its projected growth. This section slices the market by key
geographic region and includes valuable data on current challenges and timely growth
opportunities.
The competitive landscape: features in-depth analysis of the market and its leading players by
manufacturing strategy consulting provider competitive groups and their go-to-market
strategies. It includes rankings of the top consulting practices. Additionally, Manufacturing and
Production Strategy Consulting Provider Strategic and Service Disposition highlights firms'
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overall approaches to strategy and service delivery, and offerings with a distinct disposition,
depicting the firms' relative positions and corresponding focus. (Mintzes and Barbara, 1999)
5.4 Production Pricing:
Kennedy research is priced based on the type and size of the purchasing organization and the
intended use of the material. For more information on report bundle prices or licensing
opportunities, contact our client-relations team. (Mintzes and Barbara, 1999)
Table 3: Consulting Buyers
Edition Report
Enterprise (firm-wide usage) $2,995
Consulting Firm (under 50 billable
consultants
Edition Report Price
Standard (up to 5 authorized users) $2,995
Leadership (up to 15 authorized users) $4,995
Enterprise (firm-wide usage) $8,995
Consulting Firm (50-250 billable
consultants):
Edition Report Price
Standard (up to 5 authorized users) $4,995
Leadership (up to 15 authorized users) $6,995
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Enterprise (firm-wide usage) $11,995
Consulting Firm (over-250 billable
consultants):
Edition Report Price
Standard (up to 5 authorized users) $7,995
Leadership (up to 15 authorized users) $10,995
Enterprise (firm-wide usage) $14,995
5.4.1 Pricing Strategy:
One of the four major elements of the marketing mix is price. Pricing is an important strategic issue
because it is related to product positioning. Furthermore, pricing affects other marketing mix elements
such as product features, channel decisions, and promotion.
While there is no single recipe to determine pricing, the following is a general sequence of steps that
might be followed for developing the pricing of a new product:
1. Develop marketing strategy - perform marketing analysis, segmentation, targeting, and
positioning.
2. Make marketing mix decisions - define the product, distribution, and promotional tactics.
3. Estimate the demand curve - understand how quantity demanded varies with price.
4. Calculate cost - include fixed and variable costs associated with the product.
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5. Understand environmental factors - evaluate likely competitor actions, understand legal
constraints, etc.
6. Set pricing objectives - for example, profit maximization, revenue maximization, or price
stabilization (status quo).
7. Determine pricing - using information collected in the above steps, select a pricing method,
develop the pricing structure, and define discounts.
These steps are interrelated and are not necessarily performed in the above order. Nonetheless, the above
list serves to present a starting framework. (Islam et al., 1996)
5.4.2 Marketing Strategy and the Marketing Mix
Before the product is developed, the marketing strategy is formulated, including target market selection
and product positioning. There usually is a tradeoff between product quality and price, so price is an
important variable in positioning.Because of inherent tradeoffs between marketing mixes elements,
pricing will depend on other product distribution, and promotion decisions. (Islam et al., 1996)
5.4.2.1 Estimate the Demand Curve
Because there is a relationship between price and quantity demanded, it is important to understand the
impact of pricing on sales by estimating the demand curve for the product.For existing products,
experiments can be performed at prices above and below the current price in order to determine the price
elasticity of demand. Inelastic demand indicates that price increases might be feasible.
5.4.2.2 Calculate Costs
If the firm has decided to launch the product, there likely is at least a basic understanding of the costs
involved; otherwise, there might be no profit to be made. The unit cost of the product sets the lower limit
of what the firm might charge, and determines the profit margin at higher prices.The total unit cost of a
producing a product is composed of the variable cost of producing each additional unit and fixed costs
that are incurred regardless of the quantity produced. The pricing policy should consider both types of
costs.
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5.4.2.3 Environmental Factors
Pricing must take into account the competitive and legal environment in which the company operates.
From a competitive standpoint, the firm must consider the implications of its pricing on the pricing
decisions of competitors. For example, setting the price too low may risk a price war that may not be in
the best interest of either side, Setting the price too high may attract a large number of competitors who
want to share in the profits.From a legal standpoint a firm is not free to price its products at any level it
chooses. For example, there may be price controls that prohibit pricing a product too high. Pricing it too
low may be considered predatory pricing or "dumping" in the case of international trade. Offering a
different price for different consumers may violate laws against price discrimination. Finally, collusion
with competitors to fix prices at an agreed level is illegal in many countries.
5.4.3 Pricing Objectives
The firm's pricing objectives must be identified in order to determine the optimal pricing. Common
objectives include the following:
• Current profit maximization - seeks to maximize current profit, taking into account revenue
and costs. Current profit maximization may not be the best objective if it results in lower long-
term profits.
• Current revenue maximization - seeks to maximize current revenue with no regard to profit
margins. The underlying objective often is to maximize long-term profits by increasing market
share and lowering costs.
• Maximize quantify - seeks to maximize the number of units sold or the number of customers
served in order to decrease long-term costs as predicted by the experience curve.
• Maximize profit margin - attempts to maximize the unit profit margin, recognizing that
quantities will be low.
• Quality leadership - use price to signal high quality in an attempt to position the product as the
quality leader.
• Partial cost recovery - an organization that has other revenue sources may seek only partial cost
recovery.
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• Survival - in situations such as market decline and overcapacity, the goal may be to select a
price that will cover costs and permit the firm to remain in the market. In this case, survival may
take a priority over profits, so this objective is considered temporary.
• Status quo - the firm may seek price stabilization in order to avoid price wars and maintain a
moderate but stable level of profit. (Islam et al., 1996)
For new products, the pricing objective often is either to maximize profit margin or to maximize quantity
(market share). To meet these objectives, skim pricing and penetration pricing strategies often are
employed. Joel Dean discussed these pricing policies in his classic HER article entitled, Pricing Policies
for New Products.
Skim pricing attempts to "skim the cream" off the top of the market by setting a high price and selling to
those customers who are less price sensitive. Skimming is a strategy used to pursue the objective of profit
margin maximization. Skimming is most appropriate when:
• Demand is expected to be relatively inelastic; that is, the customers are not highly price sensitive.
• Large cost savings are not expected at high volumes, or it is difficult to predict the cost savings
that would be achieved at high volume.
• The company does not have the resources to finance the large capital expenditures necessary for
high volume production with initially low profit margins. (Islam et al., 1996)
5.4.4 Penetration pricing pursues the objective of quantity maximization by means of a low price. It is
appropriate when:
Demand is expected to be highly elastic; that is, customers are price sensitive and the will
increase significantly as price declines.
Large decreases in cost are expected as cumulative volume increases.
The product is of the nature of something that can gain mass appeal fairly quickly.
There is a threat of impending competition.
As the product life cycle progresses, there likely will be changes in the demand curve and costs. As such,
the pricing policy should be reevaluated over time.
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The pricing objective depends on many factors including production cost, existence of economies of
scale, barriers to entry, product differentiation, and rate of product diffusion, the firm's resources, and the
product's anticipated price elasticity of demand. (Islam et al., 1996)
5.4.5 Pricing Methods
To set the specific price level that achieves their pricing objectives, managers may make use of several
pricing methods. These methods include:
• Cost-plus pricing - set the price at the production cost plus a certain profit margin.
• Target return pricing - set the price to achieve a target retime-on- investment.
• Value-based pricing - base the price on the effective value to the customer relative to alternative
products.
• Psychological pricing - base the price on factors such as signals of product quality, popular price
points, and what the consumer perceives to be fair.
In addition to setting the price level, managers have the opportunity to design innovative pricing models
that better meet the needs of both the firm and it's customers. For example, software traditionally was
purchased as a product in which customers made a one-time payment and then owned a perpetual
license to the software. Many software suppliers have changed their pricing to a subscription model
in which the customer subscribes for a set period of time, such as one year. Afterwards, the
subscription must be renewed or the software no longer will function. This model offers stability to
both the supplier and the customer since it reduces the large swings in software investment cycles.
(Mamun et al., 2006)
5.4.6 Price Discounts
The normally quoted price to end users is known as the list price. This price usually is discounted
for distribution channel members and some end users. There are several types of discounts, as
outlined below.
Quantity discount - offered to customers who purchase in large quantities.
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Cumulative quantity discount - a discount that increases as the cumulative quantity
increases. Cumulative discounts may be offered to resellers who purchase large quantities
over time but who do not wish to place large individual orders.
Seasonal discount - based on the time that the purchase is made and designed to reduce
seasonal variation in sales. For example, the travel industry offers much lower off-season
rates. Such discounts do not have to be based on time of the year; they also can be based on
day of the week or time of the day, such as pricing offered by long distance and wireless
service providers.
Cash discount - extended to customers who pay their bill before a specified date.
Trade discount - a functional discount offered to channel members for performing their
roles. For example, a trade discount may be offered to a small retailer who may not purchase
in quantity but nonetheless performs the important retail function.
Promotional discount - a short-term discounted price offered to stimulate sales. (Mamun et
al., 2006)
6. Competitive strategies of pharmaceutical companies
The pricing and other competitive strategies of pharmaceutical companies have been
altered by revolutionary developments in information technology, new state drug
substitution laws, federal legislation, and the emergence of market institutions that include
health maintenance organizations (HMOs) and pharmacy benefit managers (PBMs). An
important and sometimes overlooked factor that distinguishes one company from another in
the pharmaceutical industry is strategic planning. Low-cost high-quality drugs benefit society
and helps provide pharmaceutical companies a competitive edge.
There are some factors which drive the price and quality competitiveness of different
companies.
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Distinguished Operational Capability
Consistently delivering high quality Products
Professional Management Capability
Adopting Innovation in Manufacturing Process
Low Manufacturing Cost
Research and Development Capability in both Formulation and API(Active
Pharmaceuticals Ingredients)
Sales and Marketing Capability focused on Brand building. (Kotler et al., 2008)
6.1 Influential factors on prescription preparation by doctors: a survey conducted on
practicing doctors and medical representatives in Bangladesh
Pharmaceutical industry is one of the progressive and perspective industries in Bangladesh. It
contributes 1% to the country’s GDP and is the third largest industry in terms of contribution to
government revenue .The current market size is about 10,000 million with having almost
persistently double digit growth. The market is almost self-sufficient in meeting local demand as
97% of the drugs are manufactured locally and is exporting to 92 countries. (Habib and Alam,
2011)
There are 267 licensed pharmaceutical companies in Bangladesh. About 80% of the drugs sold in
Bangladesh are generics and 20% are patented drugs. The country manufactures about 450
generic drugs for 5,300 registered brands which have 8,300 different forms of dosages and
strengths. Among the 49 Least Developed Countries (LDCs), Bangladesh has the strongest base
to manufacturing pharmaceutical products. (Habib and Alam, 2011)
This large pharma market is principally driven by the prescriptions of doctors. Company
personnel (marketing and sales division) always try to motivate doctors to prescribe their own
company brands by personal selling, clinical meetings, seminars, symposia, etc because in
Bangladesh the promotion of pharmaceutical products in the mass media is strictly prohibited.
The sales division (medical representatives) is playing the imperative role for marketing division.
Medical representatives regularly make sales call to doctors by sharing scientific information and
competitive advantages of their products over the competitors.During prescription preparation
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doctors consider such factors and use brand names for treatment and patients buy the prescribed
brands. (Habib and Alam, 2011)
It might be helpful to pharma marketers to figuring out the factors that influence physicians to
include brands in prescription which will ultimately help to sustain the development in the
intense rivalry. (Habib and Alam, 2011)
6.2 Materials and Methods
The focus of this study was to gain marketing insight by subjective and objective analysis of
factors those influence the prescription preparation of doctors. It was a cross-sectional,
descriptive and quantitative research. (Sultana and Khosru, 2011)
By purposive, convenient sampling, 200 registered practicing doctors from Dhaka, Rangpur,
Comilla, Narayongong, Mymensing and Khulna and 245 medical representatives from the same
districts of Bangladesh of 16 pharmaceutical companies comprised the study population. The
selected doctors were specialized in Medicine, Surgery, Gynecology, Dental and GP (General
Practitioner). Designations of the medical representatives of the pharmaceutical companies were
regional sales manager, area sales manager and medical information officer. To get the best
knowledge on the purpose of the study, the survey method was taken as better way to
communicate with the medical representatives and physicians than any other option.
Questionnaire was prepared and finalized after pre testing. Pre testing was done on both the
physicians (30 physician) and the medical representatives (40 representative) and no major
change was made in the questionnaire. Same questionnaire was used both for subjective and
objective analysis except the respondents’ part.
The measurement was made on the basis of 5 point Likert Scale. Non response was very minimal
and that was filled by neutral value. All data input, format, transformation and analysis were
performed using SPSS 16 version and Microsoft Excel®. The study was conducted from
February 2013 to October 2013.
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Better generalization can be done if the whole country was covered with addition of negative
questions in the questionnaire that would more solidify the perception. (Sultana and Khosru,
2011)
6.3 Results and Discussion
Among the 200 physician respondents 58 were female and 142 were male physicians; more
specifically, 18 were dentist, 86 were GP, 45 were medicine specialist, 28 were surgeon. Among
the 245 medical representatives seven were female and 238 were male, 212 were medical
information officer and 33 were manager (area and regional). After analyzing the data, it was
found that there is difference in response between variable to variable and doctor (subjective) to
medical representatives’ (objective) response. (Sultana and Khosru, 2011)
Seventy six percent of doctors consider company image during prescription generation while
83.3% representatives think the same (Fig. 4). 22.68% younger (25 – 35Y) doctors are strongly
agreed to consider company image and 36.59% older (46Y and above) doctors have same
consideration. Whereas 88.89% younger (below 25 Y) and only 25% older (46Y and above)
representatives strongly agreed on it. (Sultana and Khosru, 2011)
Sixty nine percent of doctors consider promotional regularity during prescribing medications to
patients but 87% of representatives think regular promotion of brands increases prescription in
favor of the promoted brands (Fig. 5). Younger doctors (53.61%) are more sensitive to regular
promotion than older (36.59%) ones. Representatives have little more focus on product
availability than doctors (Fig.6). Older (both doctors and representatives) people have more
focus on availability maintaining. (Sultana and Khosru, 2011)
Subjective responses of doctor and objective responses of representatives regarding competitive
price of brands does not has suggestibility to have significant consideration during prescribing
medications to patients (Fig. 7). Representatives think to have more improvisation on
prescription but doctors’ response is significantly different of having less consideration of
representatives during prescribing medications (Fig. 8).
There is no variation of responses with age in case of doctor but there is significant difference in
representatives. 33.33% younger but 75% older representatives agreed to have role on changing
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doctors’ decision in favor of their brands. Easy brand name and international certification of the
firm did not make a huge noise in the survey responses (Fig. 9, Fig. 10). There is much
difference in consideration of promotional tools in prescription generation (Fig. 11) between
subjective and objective assessment. Twenty five percent of older and 77.78% younger
representatives strongly agreed to that. (Sultana and Khosru, 2011)
There is a little gap in the response to have effect on prescription of scientific information and
personal experience related confidence consideration between doctors and representative (Fig.
12). Subjective response with age is similar but older (75%) agreed more than the younger
(55.56%) representatives in case of personal experience. (Sultana and Khosru, 2011)
6.4 Comparative analysis of subjective and objective responses is given below.
Figure 4: Comparative response (in percentage) in consideration of company image during
prescribing medications to patients
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Figure 5: Comparative response (in percentage) in consideration of regular promotion during
prescribing medications to patients
Figure 6: Comparative response (in percentage) in consideration of availability of brands during
prescribing medications to patients
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Figure 7: Comparative response (in percentage) in consideration of low price of medicine during
prescribing medications to patients
Figure 8: Comparative response (in percentage) in consideration of medical representative’s
improvisation during prescribing medications to patients
Figure 9: Comparative response (in percentage) in consideration of easy brand name during
prescribing medications to patients
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Figure 10: Comparative response (in percentage) in consideration of international certification of
company during prescribing medications to patients
Figure 11: Comparative response (in percentage) in consideration of promotional tools during
prescribing medications to patients
Figure 12: Comparative response (in percentage) in consideration of scientific information
during prescribing medications to patients. (Sultana and Khosru, 2011)
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Pharma market in Bangladesh has become hyper competitive, because every firm is competing
in generic market. Medical representatives of every firm are firmly trying to create prescriptions
in favor of their brands by many innovative ways. This study contains a minimum scenario of
influential factors on prescription preparation and hope to see a healthy growth of pharma
industry of Bangladesh.
7. Export prospects of pharmaceuticals sector in Bangladesh
Bangladesh's pharmaceutical industry has tremendous potential to grow and compete in the
international market. Most companies follow the good manufacturing practice (GMP) standards,
set by the UN World Health Organization (WHO). Bangladesh can compete with countries like
India, China, Brazil and Turkey in the international export market due to its quality compliance.
Bangladesh can continue to produce patented products until 2016 as per trade related intellectual
property rights (TRIPS).The industry is legally permitted to reverse engineer, manufacture and
sell generic versions of on-patent pharmaceutical products for domestic consumption as well as
for export to other LDCs. It created a big opportunity to make Bangladesh a new chemical entity.
Bangladesh imports 80 per cent of its pharmaceutical raw materials. A good number of skilled
professionals from home and abroad are expected to join the industry to enrich its human
resources pool. (Yusuf and Muhammad, 2006)
Pharmaceuticals sector is one of the fastest growing sectors in Bangladesh. With satisfactory
annual growth rate of 34%, this sector is also fulfilling 97% of the total medicine requirement
of the local market. Now more than 200 registered pharmaceutical manufacturers in Bangladesh.
Itis the largest employment sector in Bangladesh. Around 35,000 people work in the industry
i.e.50% are pharmacists, chemists, biochemists and microbiologists. Government organization
i.e. Directorate of Drug Administration and semi government Pharmacy Council of Bangladesh,
control pharmacy practice in Bangladesh. The Bangladesh Pharmaceutical Society is associated
with international organizations i.e. International Pharmaceutical Federation and Commonwealth
Pharmaceutical Association. According to Bangladesh Pharmaceuticals and Healthcare Report
2011, Bangladesh medicine sales reached. 7,000 crore in 2010. Business Monitor International in
its latest report said Bangladesh hold the 14th position in 17 regional markets surveyed in BMIs
Pharmaceutical & Healthcare Business Environment Ratings for the Asia region. Bangladesh's
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pharmaceutical rating is 40.2out of 100; this figure has changed marginally from the previous
quarter but still remains lower than the regional average of 53.1. Globally, Bangladesh occupies
67th position in BMIs 83market-strong pharmaceutical universe. The experts forecast the growth
trend would take the sales volume to Tk. 10,000 crore in 2011.At present Bangladesh is
exporting more than 67 different countries of the world. There are about450 generics/substances
registered in Bangladesh. Out of these 450 generics, 209 are in the controlled category (i.e. in the
essential drug list). The remaining 333 generics are in the decontrolled category. The total
number of brands/items that are registered in Bangladesh is currently estimated to be 5,300 while
the total number of dosage forms and strengths are 8,300, about 12,500 plus brands. The top 10
domestic manufacturers having a market share of about85%, while the other manufacturers
contribute about 20% of the total pharmaceutical market of Bangladesh. (Yusuf and Muhammad,
2006)
7.1 Foreign Markets
Bangladesh has exported basic chemicals to many countries like Hong Kong, South Korea,
Malaysia and so on. After being successful in exporting basic chemicals, a few leading
companies also started registering and exporting their finished formulation in sixty seven other
countries, i.e. Australia, Brazil, Canada, Japan, etc. Overall pharma companies have export
activities in about 72 countries. (Yusuf and Muhammad, 2006)
7.2 International Privilege
Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement permits Bangladesh to
reverse-engineer patented generic pharmaceutical products to sell locally and export to markets
around the world. The 1994 WTO agreement on Trade Related Aspects of Intellectual Property
Rights (TRIPS) requires signatories to implement patent protection for almost all products,
including pharmaceuticals. However, article 66 provides LDCs with a breathing space before
introducing full product patent protection. Bangladesh is therefore exempt until 2016 from the
requirement to observe patent protection on reverse-engineered generic products destined for the
local market and also enjoys a range of privileges with regard to exporting such products. (Yusuf
and Muhammad, 2006)
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7.3 Where the industry is right now
Since the Doha declaration in WTO / TRIPS Agreement declaration in 2001, our govt. has just
allocated land for the proposed central API (active pharma ingredient) facility. Expert said that
if you don't have the backward-integrated API or raw material industry, you cannot be
competitive in export markets. India is competitive in world market because it has vibrant, world
class API manufacturing capabilities. APIs occupy a significant portion of cost of pharma
products, and cheap labor cost is not a huge advantage as it is always publicized by many. Sad
but true- we are nowhere near India in terms of skilled manpower or process capabilities, and
there is no noticeable progress to develop the skill set or manpower. Again, the industry is yet to
have any bioequivalence testing facility which is mandatory for product registration in developed
markets, and there is mounting pressure from even semi regulated markets for such compliance.
The global generic drug market is now $130 billion, and US is the market leader with more than
$45billion whereas India's presence is strong with $9 billion and ours only $45 million.
Bangladesh is now exporting a wide range of pharmaceutical products covering all major
therapeutic classes and dosage forms. Beside our regular brands, we are also exporting high-tech
specialized products like inhalers, Suppositories, Nasal Sprays, Injectables and infusions. Apart
from our overseas retail customers, we are even supplying to world-renowned hospitals and
institutions like Raffles Hospital of Singapore, Jinnah Hospital of Pakistan, MEDs of Kenya,
SPC of Sri Lanka and KK Women & Children Hospital of Singapore. The product quality,
packaging and presentation of our products have been highly appreciated in all the countries we
are exporting. (Yusuf and Muhammad, 2006)
7.4 Export Scenario
As said before pharmaceuticals sector is the 2nd foreign currency earner sector in Bangladesh.
Last five years it earns at least $30 million. Globally Bangladeshi pharmaceuticals companies
were doing a much better business in 2010.Top ten companies have almost reached their
expected sales target. According to a June 2010 Business Monitor International (BMI) report,
Bangladesh had a domestic pharma market worth Tk. 7,000 crore in 2010 and export worth
$40.69 million; expert says it could be reached domestic worth Tk. 1000 crore export worth
$45 million in 2011 and domestic worth Tk.1200 export worth $48 million in 2012. (Muktadir
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and Abdul, 2011)
7.5 Barriers
High cost of registration for their export items and restriction on transfer of funds for
promotional activities.
The fixed mark-up system of pricing helped keep the prices of pharmaceutical products
low; this made it difficult to cover costs of marketing and distribution.
In order to export a drug to a regulated market and to some moderately regulated market,
itis mandatory to provide bioequivalence data. At present there is no bioequivalence
laboratories exist in Bangladesh and we have to conduct this experiment abroad at a high
price.
Weaknesses in government policy on pharmaceuticals.
Bangladesh is also being deprived of the technology transfer where the major strength of
the multinationals lie.
Pharmacies are not adequately supervised to ensure the quality of drugs sold there.
Sometimes pharmacies are not supervised at all by the DDA because of the inadequate
strength of the drug administration. (Muktadir and Abdul, 2011)
7.6 Opportunities
APIs (Active Pharmaceutical Ingredients):
There are massive Scope in the overseas markets. There is no strict registration requirement and
promotional costs are also low for API. If we maintain cost effectively in this particular matter; it
will be a huge opportunity for us for exporting our raw materials in foreign markets. (Hasan and
Nazmul, 2010)
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Bulk drugs:
Bangladesh Pharmaceutical Society is planning to set-up a “Reference Laboratory” for appeal,
biopharmaceuticals and pharmacokinetic analysis and research. They are also seeking foreign
participation in developing this laboratory. Opportunities have been created in Bangladesh for
bioequivalence study, validation report, clinical trials and manufacturing plant audit mechanism.
These sub-sectors would need more investment in future. The industry created opportunities for
foreign direct investment. Some of the pharmaceutical manufacturers of Bangladesh have made
multimillion-dollar investments on new plant and facilities conforming to USFDA and UK-
MHRA Standards. They have sufficient production capacity for contract (“Toll”) manufacturing
including an abundant and cheap labor force. (Hasan and Nazmul, 2010)
7.7 Support needs to buster export
Removal of export barriers.
Strengthening of drug administration.
Development of independent drug testing laboratory DTL.
Development of clinical testing / Bioequivalence centers.
Establish API Industry Park.
Introduce CGMP (Current Good Manufacturing Practice) training.
Dedicated pharma zone (Temperature control area) at sea / Airports
Suggested changes in patent law to make use of TRIPS Agreement. (Hasan and Nazmul,
2010)
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8. Market insight: How Bangladesh pharmaceutical sector performed in 2015
The Pharmaceutical sector is one of the most developed among the manufacturing industries in
Bangladesh, although it is still small compared to other comparable sectors. The increase in
awareness about healthcare, higher income and increasing government expenditure have resulted
in higher demand for medicine.The Drug Policy of 1982 has helped the industry grow by 65
times from BDT 1730 million to BDT 113 billion now, according to IMS report of 2014. In 2000
there were 173 active and licensed allopathic drug-manufacturing units in the country, while the
figure now stands at 300 now.According to the Directorate General of Drug Administration
(DGDA), there are currently 200 active allopathic companies in Bangladesh. medication. There
are 1495 wholesale drug license holders and about 37700 retail drug license holders.
The industry meets 98% of the demand for medication in the country and can be considered to be
self-sufficient.The sector employs 1,15,000 workers and between 2013 and 2014, the growth
stood around 11.37%. According to IMS Health, annual pharmaceutical sales in the local market
may reach BDT 160 billion within 2018. (Rahman, 2015)
Figure 13: Local Sales (Source: IMS /4th quarter report – data visuals by EBL Securities)
8.1 Export scenario
The industry is also exporting abroad. Currently, formulations are exported to 92 countries
around the world. The major destinations for Bangladeshi medicines are Myanmar, Sri Lanka
and Kenya, while nearly 50 countries import Bangladeshi medicines regularly. The growth in
exports has averaged over 10% from 2010 to 2014. In 2015, the exports was over $ 41.17
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million. Pharmaceutical companies are trying to export to regulated, unregulated and moderately
regulated markets. (Rahman, 2015)
Figure 14: Exports (Source: IMS /4th quarter report – data visuals by EBL Securities)
8.2 Domestic competition
The domestic market is highly concentrated and competitive. The local manufacturers dominate
the industry capturing market share of 90%. While the multinationals cater to the remaining
demand. According to IMS Health, the top 10 companies hold 68.5% market share, the top 20
hold 85.73%, and the top 31 hold 94.1%, while the remaining 169 companies shared 5.9%
among them.Square Pharmaceuticals led the industry with a market share of 19.21%. Incepta and
Beximco took 2nd and 3rd positions with market shares of 10.42% and 8.47% respectively.
(Rahman, 2015)
Table 4: Top 10 companies (Source: EBL Securities Ltd)
8.3 MNCs
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Although a number of MNCs are operational in Bangladesh market, no MNCs are in the top ten
in terms of domestic sales. Out of the top fifteen pharmaceutical companies in Bangladesh, only
two players are MNCs. Among the MNCs, Sanofi has the highest market share while Novartis
has the highest growth as of 2014. (Rahman, 2015)
Table 5: Top MNC pharmaceutical companies (Source: EBL Securities Ltd)
8.4 Backward integration
Due to lack of backward integration, the sector is at a competitive disadvantage, as
pharmaceutical players still have to import 90% of raw materials from 98 indenters around the
world. Most APIs or their raw materials have to be imported from countries like China, India,
Korea & Italy. This generates higher factor costs which can be up to 30-40% of the cost of
medicine. The API Park which was supposed to be established has been delayed due to various
problems like rise in production cost, slow gas connection and slow handover. The
manufacturers are also concerned about their capability to shift their entire production in the API
Park. For many APIs, The domestic market is too small to justify an API manufacturing plant
other than the reduction of cost. Although the companies have the technical knowledge to
produce APIs, there is not enough demand in the market. This means that once the API Park is
established, we would need to export the additional products abroad. Export channels need to be
set up now. (Rahman, 2015)
8.5 TRIPS
According to the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS),
all signatories are bound to incorporate 20 year product patent protection for pharmaceutical
products in their domestic legislation. Currently, total 48 LDCs, including Bangladesh, are not
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obliged to enact legislation on product patent rights till 2016. TRIPS provided Bangladesh
pharmaceutical firms with patent free production rights domestically until 2016 and limited
exporting advantage. A major challenge to the current scenario could have been the expiry of the
agreement. But on November 6, 2015, the TRIPs council meeting approved extension of the
transition period for pharmaceutical products for least developed countries till 2032. Bangladesh
secured additional protection for LDCs, including additional waiver as well as the previous
waiver. (Rahman, 2015)
8.6 Beximco pharma secures FDA approval
Beximco Pharmaceuticals Limited becomes the first Bangladeshi pharmaceutical company to be
approved by the US Food and Drug Administration (FDA).The approval came following
successful inspection of its oral solid dosage facility at Tongi during 19-22 January 2015.
The company says it has received the establishment inspection report (EIR) from the US drug
regulatory authority stating that the audit is formally concluded. This is a major milestone for the
company as well as for the entire industry as this is the first time a Bangladeshi company has
received the prestigious FDA approval, according to a press release. This approval, it said, is
based on the comprehensive audit encompassing all the systems of drug manufacturing including
quality, facilities and equipment, materials, production, packaging and labeling and laboratory
controls.Remarkably, there was no 483 observation issued by the US regulatory authority. A 483
form is issued when FDA has observations of non-compliance or deviation from good
manufacturing practices (GMP).The company has already submitted several abbreviated new
drug application (ANDAs) for the US market which are currently under review. This is a
remarkable achievement for the Bangladesh pharmaceutical industry as this makes ways for us to
export medicines to the US market known for stringent regulations and quality standards.
Beximco Pharma has facilities already accredited by the regulatory authorities of European
Union, Australia, Canada, Taiwan and Brazil. (Rahman, 2015)
9. Conclusion
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The pharmaceutical sector has already been declared as the thrust sector by the government of
Bangladesh. Bangladesh has built a strong baseline and going towards the self-sufficiency for the
production of medicine. Meanwhile, some companies have started to produce vaccine, insulin,
anticancer drugs, etc. As the industry is growing at 11.37% and has a CAGR of 21%, it has a lot
to offer given that the government provides incentives & the investment in R &D increases
among the companies. In 2015 alone, patented drugs worth $60bn are going off patent which
opens up opportunities for generic manufacturers around the world. Bangladesh could be ideally
positioned to gain from generic drug opportunities with its cost advantages and skilled
manpower, but we need to address those key challenges faced by the industry in order to gain
further competitive advantages and build presence in the global generics. In Bangladesh the per
capita consumption rate of medicine is one of the lowest in this earth. However, since
independence this industry has been a key contributor to the Bangladeshi economy. The industry
has been equipped to realize them is a million dollar question. When we have generic drug
producers like India and China, we will have to make double the efforts required to enter any
export destination. Pharmaceutical Industry is rising at a likely rate with the expansion of
healthcare infrastructure and so increasing the health consciousness and the purchasing
competence of natives. Healthy growth is to be expected to encourage the Pharmaceutical
companies to introduce newer drugs and newer research products, while at the similar time
maintaining a vigorous competitiveness in respect of most compulsory drugs.
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