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There are several sectors on which Bangladesh can be proud of and, undoubtedly, the pharmaceutical sector is one of those. The sector is also 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 30 billion per year of which about 95% of the total requirement of medicines is catered by the local companies and the rest 5% is imported. The imported drugs mainly comprise of the cancer drugs, vaccines for viral diseases, hormones etc.
After meeting the local demands, some pharmaceutical companies have now stepped abroad and are marketing their products there successfully. These companies are now exporting their products to about 50 to 60 countries. Now that the TRIPS has come into force from the beginning of this year i.e. 2005, the international business scenario will face a remarkable change. The signatories to the Agreement of TRIPS shall now be obliged to adhere to its provisions.
Under the provisions of TRIPS, no company can produce, sell or market patent products other than the companies to whom the patent rights belong after 2005. Generally the patent period is for 20 years for a particular patent product and over this period the patent holders are taking a premium price from the consumers. This law is applicable both for the developed and the developing countries. But in view of the special needs and requirements of the least developed countries (LDCs); their economic, financial & administrative constrains; and their need of flexibility to create a viable technological base, they shall not be required to apply the provisions of the TRIPS for a period of 10 years i.e up to 2016 from the date of application. as defined under paragraph I of article 65. The council of TRIPS may, upon duly requested by a least-developed country, can accord extension of this period mentioned under article 66.1 of the TRIPS Agreement.
However, among the least developed WTO member countries, Bangladesh stands out clearly as the leader in terms of the pharmaceutical industries, which opens a gate of opportunity for the Bangladesh pharmaceutical industry to prepare itself to cater to the needs of the rest of the least developed member countries in terms of supplying medicines, mostly the patent generics until 2016.
The big question still lies in front of us to be answered. We do not have the basic domestic sources of raw materials to manufacture finished medicines. The raw materials, especially the patent generics are presently imported either from the developing or the developed countries.
But now that the patent law has come into force, no developed or developing country can sell or supply raw materials to any concern for production of patent medicines other than the patent holder companies. This clearly puts our industry in such a situation that either we shall have to remain confined with the generic market or we shall have to be self sufficient in manufacturing of the Active Pharma Ingredients (API). If we have any API plant, then we can always source out for the intermediate chemicals to produce API.
As the intermediate chemicals are not patent, they can very well be sold to or bought by any developed or developing country. But the question remains whether we are really prepared with any API plant. A very few number of pharmaceutical industries have their own API plants.
The leaders of the Bangladesh Association of Pharmaceutical Industries (BAPI) have had several meetings with the relevant ministries highlighting the immediate need to provide them with an industrial park for manufacturing of API. Along with the required API plants, it is essential to set up the effluent treatment plants.
The government has accepted the proposals but action is yet to be taken in this regard. However, some of the pharmaceutical companies already have API plants and a few are in the process of setting up API plants. Now having said about the positive side of this issue, it remains to be sorted out is to what extent this TRIPS rule would create opportunities for the global as well as local growth of the Bangladesh pharmaceutical market. The WTO members agreed that the TRIPS should be interpreted in a manner, which would enable the members to protect their right to public health and promote access to cheaper sources of quality medicines. Bangladesh, however, is prepared with their need of essential medicines due to the fact that Bangladesh has a strong national pharmaceutical industry.
Among the least-developed member countries, ironically the rest of the countries do not have sufficient facilities to produce medicines in all formulations. Most of these countries are dependent on imports of essential medicines from other countries.
This is the opportunity, which can be availed of by the countries with good pharmaceutical industries. But it is also understandable that extension into international markets may become a serious question for most of the growing companies. In the present interconnected global scenario the question whether to export or not seems purely academic.
If you decide to go for international market, you shall have to go for market research and find out the need of your product in the countries YOU choose to export. Then you shall have to find out the potential customers of your products and which contacts and market clout can support your export program.
Trade fairs conducted by EPB (Export Promotion Bureau) provide added opportunities to meet new customers. These exhibitions also provide opportunities to have one-to- one meeting with different potential customers and to meet the relevant authorities, namely the drug registration authority.
Most countries require that imports meet safety, technical and quality requirements through various testing and certification. Based on these requirements we can classify and categories these countries/markets as: highly regulated, moderately regulated; and less regulated.
Highly regulated
Under this classification, mostly are the US, Japan and the EU markets. To market your products, for instance in EU, you have to comply with the EU equivalence for certification. These countries conform to the ICH and CTD (common technical documents). For the US market you have to have the approval of FDA.
These countries require some methods for registration, which is difficult for companies in Bangladesh to meet, due to the lack of such facilities in Bangladesh like providing with bio-equivalence of a product. We have no institution where bio-equivalence can be studied or tested to meet such requirements. Moreover, it is very expensive to obtain the bio-equivalence study. Our pharmaceutical products can comply with any standard of quality but due to the very expensive procedure of getting the products registered in the developed countries, most of the companies do not even try to enter into these markets.
For the registration, standard references are required to be submitted which is again a costly and time consuming affair. Another requirement is the clinical trial reports, but unfortunately we not have such institution in the country where there are patients subjected to the clinical trials. As such these clinical trial reports are either gathered from any hospital or just to meet the requirement some reports are imitated from some existing reports on that particular product from publications.
Moderately regulated
These are the markets/countries where bio-equivalence or reference standard is not required. They accept the working standard samples for the products to be registered. But in some of these countries the fees for registration is so high that many of the medium sized companies will not prefer to enter into that market. Charging of high fee for registration is a sort of a non-tariff barrier. One good example of such market is Russia where one has to pay at least twenty five thousand to thirty thousand dollars as a fee for just one individual formulation.
Yet some of the moderately regulated markets demand some special style of text printing on the secondary, packing materials. For instance, if you want to register your products in the Philippines, the font size of the brand name shall have to be smaller than the font size used for printing, the generic name. Then PDS (Product Display Side) of the carton shall not contain any photograph. Only text is allowed on the PDS of the carton.
Less regulated
These are the markets where the registration requirements are very simple. Many of the documents required in the previous markets are not required in this market. For instance, the bio-equivalence tests, clinical trials and the reference standards are not essential. They only need some samples to be submitted to the drugs for testing purpose and if the drugs
qualify in the tests, those are allowed to be marketed in those markets. Some relevant documents are of course required to be submitted along with the samples, such as; free sales certificates, DT certificates, certificate of analysis, certificate of registration etc. These can be easily complied with because any company following the CGMP will definitely have these certificates. These are mostly the LDCs and some Asian, African and Latin American markets.
In these countries, the key is to determine what requirements exists, but, more importantly, which ones are enforced.
On the other hand, export sales require substantial up-front investment in the form of market analysis, making trips to the potential market to secure the required relationship, and ongoing support of export activities with promotional campaigns (like rebates from the government). Other areas relating to export require significant expenditure which includes safety and technical certifications, compliance top local laws and modification of existing products to meet the foreign needs (e.g. the text on the outer cartons to be in local language, the color to be changed etc.).
Besides, it is clear that no foreign market is free from challenges. including lost shipments, delays in delivery, cultural miscommunications, unforeseen competition, political upheavals, corruption, sudden changes in regulations and many other risks. One should be prepared to accept the setbacks and always project the exports as long term strategic direction.
All of the members of this big industry sector, who are at presently engaged in exporting to different countries, will definitely agree that literally no significant strategic support is provided by the Government to export pharmaceutical goods from our country. Leaders of the BAPI have put forward some suggestions and recommendations to the Government in writing as to how we can have better share in the global market but only a very few of the recommendations are discussed. Now is the time when the patented generic drug companies from the developed countries cannot enter with their patented generics in the least-developed or developing countries, we can capture a great share of the African markets and the moderately and less regulated markets. The present Government is very keen to extend all out supports and assistance to the exporting companies and we must avail ourselves of the full advantage of the situation.
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The author is director, marketing and sales of ACME Laboratories Ltd
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