Pharma industry needs to prepare for headwinds | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Wednesday
June 11, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
WEDNESDAY, JUNE 11, 2025
Pharma industry needs to prepare for headwinds

Panorama

Professor Mustafizur Rahman, M Deen Islam & Rachel Thrasher
05 October, 2022, 09:00 am
Last modified: 05 October, 2022, 01:38 pm

Related News

  • Trump executive order demands pharma industry price cuts
  • Trump to sign executive order to cut prices of medicine to match other countries
  • Boosting local API production key to competing globally: Pharma experts
  • Trump signs healthcare executive order that includes a win for pharma companies
  • Drugmakers take wait-and-see approach amid possible US tariff on pharma imports

Pharma industry needs to prepare for headwinds

How can Bangladeshi policymakers become compliant with World Trade Organisation (WTO) rules, without losing the economic success that has allowed it to graduate from LDC status in the first place?

Professor Mustafizur Rahman, M Deen Islam & Rachel Thrasher
05 October, 2022, 09:00 am
Last modified: 05 October, 2022, 01:38 pm
As medicine prices increase, the poorest one-fifth of households will face a difficult tradeoff between life-saving medicines and other basic needs. Photo: Mumit M
As medicine prices increase, the poorest one-fifth of households will face a difficult tradeoff between life-saving medicines and other basic needs. Photo: Mumit M

Bangladesh faces a challenging paradox: it is set to graduate from its 'least developed country' (LDC) status in 2026, but upon graduation, it will lose the flexibility in international trades rules that has allowed it to nurture a burgeoning pharmaceutical industry and establish a strong foothold in the global medicines market.

In 1971, the United Nations created the LDC category to provide support for counties with especially low incomes and particular challenges to economic growth. 

Under this framework, LDCs have access to international support measures (ISMs) in the areas of trade, finance, technical assistance, and participation in international fora. 

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

The WTO is one such international institution that recognises the LDC category and has put in place special rules (or, more accurately, exemptions) for those countries. 

Bangladesh is not alone in facing the looming implications of graduation: Bhutan is scheduled to graduate in 2023; Sao Tome and Principe, the Solomon Islands, Angola, Kiribati and Tuvalu in 2024 and Nepal with Bangladesh in 2026. 

In the next few years, graduating LDCs must carve out a path for continued industrialisation after graduation. How can Bangladeshi policymakers become compliant with World Trade Organisation (WTO) rules, without losing the economic success that has allowed it to graduate from LDC status in the first place?

Over the past four decades, Bangladesh has leveraged its allowances as an LDC to build an incredible domestic pharmaceutical industry that now caters to nearly 97 percent of the country's domestic demand and exports to the global market. 

Notable WTO flexibilities include a prolonged transition period for implementing the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS) and a specific waiver from the requirement to provide patent protection for pharmaceutical products. 

The LDC waiver for pharmaceuticals allows Bangladesh to produce branded generic pharmaceuticals without complying with patent and license requirements. 

This makes medicines highly affordable compared to the patented versions sold elsewhere in the world.

When Bangladesh graduates, it will no longer enjoy the benefits of the waiver and will be required to make changes to current laws and policies. 

Our recent research seeks to provide insight into this momentous shift by sketching the policy space landscape for Bangladesh and highlighting the unintended consequences of graduation, including potentially skyrocketing prices for essential medicines.

Despite Bangladesh's success in building up a domestic pharmaceutical industry, it continues to rely predominantly on imports for its active pharmaceutical ingredients (API), or the raw inputs for most pharmaceutical products. 

To counteract this, the country has already developed a policy to produce and export API domestically, including plans for an API industrial park. However, some of the policies and incentives in place are likely to contradict global trade and investment rules, stymying efforts to limit API imports. 

Additionally, one of the adverse implications of this change will be higher prices for essential medicines, especially for newly innovated medicines under patent protection. 

Becoming compliant with the WTO's intellectual property rules requires providing exclusive marketing rights only to innovators of patented medicines. This implies monopolisation of the market for essential medicines, which will lead to a sharp jump in the prices of patented medicines.

For example, insulin, a life-saving medicine for people with diabetes, could cost as much as 11 times the current price. For medicines like insulin where demand is mostly unresponsive to price increases, the higher prices lead to other negative welfare impacts and increasing poverty, especially for households needing insulin. 

Other new patent-protected drug families, like cancer treatments, will face similar impacts. 

Already, the poorest one-fifth of households are spending more than 10 percent of their income on out-of-pocket medicines expenditure. As medicine prices increase, those households will face a difficult tradeoff between life-saving medicines and other basic needs, such as food, shelter and education. 

In the recent past, Chad and other LDCs floated a proposal to extend the general LDC transition period for the TRIPS Agreement in perpetuity, along with a 12-year transition period for countries graduating from the group. 

A 13-year extension was granted in 2021, but the full proposal failed to get traction at the recently held 12th WTO Ministerial Conference in Geneva. 

Bangladesh's geo-strategic location will likely play a key role in determining the country's future path to industrialisation. 

The China-led Regional Comprehensive Economic Partnership has substantial membership overlap with the Comprehensive and Progressive Trans-Pacific Partnership. 

Meanwhile, the new US-led Indo-Pacific Economic Framework is making an attempt to move into this region. 

Bangladesh is likely to consider joining these and other regional groupings whose rules may further constrain its policymaking.

For Bangladeshi decision-makers, we have two recommendations. 

First, they must continue to advocate at the WTO and other trade negotiating forums for policy flexibility for LDCs and transition periods for countries graduating from LDC status. 

Second, they must continue to implement policies that expand the backward and forward linkages in its pharmaceutical sector, as planned under the National API and Laboratory Reagents Production and Export Policy. 

Ultimately, however, the difficulty faced by graduating LDCs calls for a broader reimagining of the global network of trade and investment rules, as they come increasingly into conflict with domestic policy space. 

Without these efforts, Bangladesh, and ultimately other LDCs, will face growing tensions with the WTO and risk undoing the economic progress that was the cause of their success in the first place.


Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue (CPD), Dhaka, Bangladesh.

M Deen Islam. Illustration: TBS
M Deen Islam. Illustration: TBS

M. Deen Islam, Assistant Professor of Economics, University of Dhaka, Bangladesh. 

Rachel Thrasher. Illustration: TBS
Rachel Thrasher. Illustration: TBS

Rachel Thrasher, Researcher, Global Economic Governance Initiative, Boston University Global Development Policy Center. 

Features / Top News

pharmaceutical sector / Pharma industry / Pharmaceutical Industry / Pharma / pharmaceutical companies / Pharmaceutical business

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Bangladesh's growth forecast unchanged: WB report
    Bangladesh's growth forecast unchanged: WB report
  • Faiz Ahmad Tayeb. Photo: BSS
    Import duty on raw materials for e-bikes, lithium batteries reduced from 80% to 1% in some cases: Faiz Taiyeb
  • Swedish activist Greta Thunberg, who departed Israel by plane on Tuesday after being detained aboard the Gaza-bound British-flagged yacht "Madleen" after Israeli forces boarded the charity vessel as it attempted to reach the Gaza Strip in defiance of an Israeli naval blockade, talks to journalists surrounded by French police as she arrives at a terminal at the Paris-Charles de Gaulle Airport, in Roissy-en-France near Paris, France, June 10, 2025. REUTERS/Gonzalo Fuentes
    Greta Thunberg says she was kidnapped by Israel in international waters

MOST VIEWED

  • On left, Abdullah Hil Rakib, former senior vice president (SVP) of BGMEA and additional managing director of Team Group; on right, Captain Md Saifuzzaman (Guddu), a Boeing 787 Dreamliner pilot for Biman Bangladesh Airlines. Photos: Collected
    Ex-BGMEA SVP Abdullah Hil Rakib, Biman 787 pilot Saifuzzaman drown in boating accident in Canada
  • File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar
    Dhaka: The city we never want to return to, but always do
  • Chief Adviser Muhammad Yunus leaves for a four-day visit to the United Kingdom from the Dhaka airport on 9 June 2025. Photo: CA Press Wing
    CA Yunus leaves for UK; discussion expected on renewable energy investment, laundered money
  • File Photo: Collected
    Enhanced surveillance at Ctg airport amid rising global Covid-19 cases
  • Inside the aid ship stormed by Israeli forces on 9 June 2025. Photo: BBC
    Israeli forces stormed aid boat carrying Greta Thunberg bound for Gaza: Freedom Flotilla Coalition
  • Photos: Collected
    Abdul Hamid wasn't arrested because he's not wanted right now: Home adviser

Related News

  • Trump executive order demands pharma industry price cuts
  • Trump to sign executive order to cut prices of medicine to match other countries
  • Boosting local API production key to competing globally: Pharma experts
  • Trump signs healthcare executive order that includes a win for pharma companies
  • Drugmakers take wait-and-see approach amid possible US tariff on pharma imports

Features

Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

8h | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

1d | Features
Photo collage shows political posters in Bagerhat. Photos: Jannatul Naym Pieal

From Sheikh Dynasty to sibling rivalry: Bagerhat signals a turning tide in local politics

3d | Bangladesh
Illustration: TBS

Unbearable weight of the white coat: The mental health crisis in our medical colleges

6d | Panorama

More Videos from TBS

Greta Thunberg deported from Israel

Greta Thunberg deported from Israel

10h | TBS World
BNP is not a revolutionary party: Mirza Fakhrul

BNP is not a revolutionary party: Mirza Fakhrul

11h | TBS Today
News of The Day, 10 JUNE 2025

News of The Day, 10 JUNE 2025

9h | TBS News of the day
Trump sends 2,000 more National Guard and 700 Marines to Los Angeles

Trump sends 2,000 more National Guard and 700 Marines to Los Angeles

12h | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net