Pharma stares at major raw material crisis if Iran conflict drags on 

Rising instability in global energy and petrochemical markets due to the ongoing war in the Middle East has driven up the prices of basic chemicals and pharmaceutical raw materials in the global market.

Although Bangladeshi drug manufacturers currently have several months' stock of raw materials and face no immediate supply disruption, industry insiders warn that a prolonged conflict could significantly impact the sector.

These concerns were shared by pharmaceutical industry owners and raw material importers participating in the 17th Asia Expo on Sunday.

Abdul Mukadir, president of the Bangladesh Association of Pharmaceutical Industries (Bapi), said that the prices of almost all raw materials have increased due to rising costs of petrochemical-based basic chemicals. 

"Crude oil prices have nearly doubled – from $60 per barrel to around $120 – which is directly affecting chemicals and inputs used in pharmaceutical production. However, if the war ends quickly and global energy supply stabilises, prices may come down again."

He added that the war is creating major challenges not only for the pharmaceutical sector but for industries worldwide. "Due to electricity shortages, we are increasingly relying on diesel-powered generators to maintain production, which may create uncertainty around fuel supply in the future."

Mukadir said pharmaceutical companies distribute medicines nationwide – from cities to rural areas – using around 20,000 vehicles daily. The government has assured diesel supply until April, and if the situation improves by then, a major crisis may be avoided.

Industry leaders also said there has been no decision yet to increase medicine prices.

DH Shamim, managing director of pharmaceutical raw material importer BBCON, told The Business Standard that prices of almost all raw materials have increased by an average of up to 30% due to global conditions, raising production costs and putting pressure on the industry.

He noted that gas shortages and rising costs of solvents and other basic intermediates have also increased the cost of producing APIs (active pharmaceutical ingredients), ultimately pushing up overall manufacturing costs.

"Companies have little choice but to purchase raw materials at international market prices. However, since retail prices (MRP) remain unchanged, many companies are incurring losses," he said.

Shamim warned that survival would become difficult if the war continues for long. "Companies typically maintain three to six months of raw material stocks. If the conflict lasts beyond one or two months, a major crisis could emerge once current inventories are depleted."

Raghu Mitra, director of Lee Pharma – an Indian company specialising in APIs and contract manufacturing – said that due to raw material shortages, many firms are currently unable to take new orders. "We may manage the situation for the next two to three months, but beyond that, the outlook is uncertain."

Finding alternative API sources to take time

Amid global instability and the ongoing Middle East conflict, the health ministry on 24 March instructed the industry to explore alternative sources for importing pharmaceutical raw materials or APIs. While the directive is positive, it will take time to implement, said Dr Mohammad Zakir Hossain, secretary general of Bapi.

He told The Business Standard that although the ministry suggested exploring sources beyond India and China, it is not feasible to do so quickly. "Raw materials cannot be sourced overnight from just any country. A lengthy process is required."

He explained that sourcing from a new supplier involves document verification, sample collection, laboratory testing, product development, and at least six months of stability testing. After that, regulatory approval is required before imports can begin. The entire process typically takes 9 to 14 months.

He added that most pharmaceutical raw materials globally depend on petrochemicals, largely supplied through China- and India-centric supply chains. While limited alternatives exist in Europe, the United States, and Japan, they are costly and not suitable for all products.

"Due to long-standing business relationships with China and India, we receive raw materials at competitive prices. Switching to new sources carries a risk of higher costs," he said.

Although there is no major supply disruption at present, prices of some raw materials and primary packaging materials have already begun to rise. "We usually maintain stocks for two to three months. If the war continues for another one or two months, higher import costs will start affecting the market," he added.

He also noted that some existing suppliers have already indicated price increases. "If the war persists and the petrochemical crisis continues, pressure on the pharmaceutical industry will intensify."

The three-day Asia Pharma Expo 2026 and Asia Lab Expo 2026 – South Asia's flagship exhibitions for pharmaceutical manufacturing technology – began yesterday at the Bangladesh-China Friendship Exhibition Center, inaugurated at 10am by Health Minister Sardar Md Sakhawat Hossain Bakul.

Speaking at the event, the minister reaffirmed the government's commitment to advancing the pharmaceutical sector and emphasised the need for collective efforts, adding that the health ministry will continue supporting its development.

The 2026 edition features more than 400 exhibitors from over 20 countries, showcasing technologies in pharmaceutical processing, packaging, APIs and excipients, analytical and laboratory instruments, cleanroom and HVAC systems, water management, and turnkey project services.