Private health sector faces licensing delays, import dependence, API challenges

Infograph: TBS

Bangladesh's private health sector is facing multiple challenges including licensing complexities, heavy dependence on imported medical devices, and lagging progress in active pharmaceutical ingredient (API) production. Addressing these issues is crucial for tackling the challenges posed by LDC graduation.

Business leaders have called for public-private partnerships, rational drug pricing, developing the API sector and an easier licensing process.

Their comments came today (25 November) at an event titled "Private Sector Participation in Bangladesh's Health Sector: Opportunities and Challenges," organised by the FBCCI.

Abdur Razzaq, Chairman of JMI Group, said Bangladesh can produce 99% of its medicines locally, yet local production of medical devices remains stuck at only 5–10% due to the absence of policy support.

"We never developed policy support for medical devices. If we hadn't received policy backing, our pharmaceutical industry would not be here today," he said.

Razzaq warned that costs would continue to escalate as the dollar rate climbed from Tk87 to Tk123 and raw material prices rose by 40%.

Major General Mostafizur Rahman, CEO of Bangladesh Association of Pharmaceutical Industries, said cost escalation and lack of timely price adjustments are forcing companies out of business.

"For the last one and a half years, no new prices have been approved. If any company tries, they face lawsuits," he said. "Around 13–14 companies have already shut down."

He noted that import dependency remains a threat, while essential raw materials often require approvals from up to 47 authorities, delaying API production and crippling competitiveness.

Despite major investment in API production, the API Park is unable to operate fully due to the lack of gas and electricity supply, Rahman said.

"There is no skilled manpower, and academia-industry collaboration is missing," he added, noting that revised curricula submitted to the UGC have remained pending for over a year.

Speakers highlighted that licensing delays have paralyzed the sector, Narcotics licenses take 15 days to one month or longer. Companies must appoint additional staff solely to chase licensing paperwork. Environmental clearance requires over 20 types of documents, causing months-long delays. Many firms continue to operate without proper licenses, weakening monitoring capacity.

Dr Md Akramul Islam, Senior Director at BRAC, stressed that quick reform of the licensing system is critical, especially for ensuring private sector participation in services for low-income populations.

Directorate General of Drug Administration Director Ashraf Hossain said that it usually takes a pharmaceutical company around five years to break even. A proper feasibility study must be done before starting a company.

"We do not leave any work pending. Many people allege the presence of counterfeit or adulterated medicines, but they fail to provide any concrete evidence," he said.

In a keynote presentation Dr Sayed Abdul Hamid, Professor of health Economics, University of Dhaka said, the medical equipment market has grown to Tk15,000 crore, but local manufacturers remain at a disadvantage.

Key challenges include: 80% of raw materials are imported. Tariffs on raw materials are often higher than finished imported products, 250% tariff on inputs of a burette infusion set vs 10% on the finished item. Unauthorised inflow of cheap, low-quality equipment due to lack of regulatory enforcement constitutes another challenge.

He proposed VAT exemption for 10–15 years, tariff correction, restrictions on importing items already made locally, and strong regulatory control to prevent unauthentic products.

He said that Bangladesh's pharmaceutical market, worth $4 billion, remains vulnerable because API imports dominate.

"We made the API policy only in 2018. China and India heavily supported API development – we must do the same," he said. Without self-sufficient API capacity and strong academic-industry collaboration, LDC graduation will pose severe risks.

Gazi AKM Fazlul Haque, Director General of Research and Policy at the Bangladesh Investment Development Authority (Bida), said that Bida has taken the initiative to formulate a policy for medical equipment. A draft policy will be prepared and submitted to the Ministry of Health.

He added that to tackle the challenges of LDC graduation, pharmaceutical companies must prioritise API production, registration of new products, and investment in research.

Health Secretary Saidur Rahman acknowledged that complicated licensing processes have left many institutions outside regulatory oversight.
"We will try to simplify renewal to a three-year cycle, but we will not compromise on quality," he said.

He noted severe gaps in diagnostic services, urban primary healthcare, workforce shortages, and weak emergency care. Public–private partnership (PPP) models could help fill these structural gaps, he added.

Universal Medical College Chairman Priti Chakraborty emphasised that high treatment costs continue to push families into poverty, calling health insurance a key tool for financial protection.