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THURSDAY, JULY 17, 2025
Pharma industry can gear up to face LDC graduation challenges

Thoughts

Ferdaus Ara Begum
27 December, 2024, 09:30 pm
Last modified: 27 December, 2024, 09:34 pm

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Pharma industry can gear up to face LDC graduation challenges

Post-LDC graduation, our pharma industry will grapple with the loss of TRIPS waivers, which demands strategic planning, enhanced API production, and policy support to sustain growth and affordability

Ferdaus Ara Begum
27 December, 2024, 09:30 pm
Last modified: 27 December, 2024, 09:34 pm
Ferdaus Ara Begum. Sketch: TBS
Ferdaus Ara Begum. Sketch: TBS

Bangladesh has a vibrant pharma industry and meets about 96% of the domestic demand, producing mostly generic drugs, which make up almost 80% of the drugs produced locally. The nation exports to about 150 countries, including some developed countries. 

The projected revenue in the pharmaceutical market in Bangladesh is expected to reach $2.28 billion in 2024, but the Bangladesh Investment Development Authority (BIDA) estimates that the value of the domestic market alone may exceed $6 billion by 2025. 

Considering the importance of the sector, it is one of the primary concerns how the sector will sustain itself after graduation when Intellectual Property Rights (IPR) protection will be equally implementable for Bangladesh as a developing country along with other countries. 

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Over the years, Bangladesh has been able to leverage the policy space as a least developed country (LDC) under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement of the World Trade Organization (WTO) to strengthen domestic pharmaceutical production, ensuring affordable access to essential medicines for the people of the country, reducing much reliance on multinational corporations and imports. 

Graduation from LDC status means some of these policy privileges will be lost, requiring a plan to encounter new regulatory and market challenges. 

The External Resource Division (ERD) organised a seminar at the end of 2022 where a number of decisions were taken and private sector organisations were given responsibilities to act more effectively. 

It was also mentioned that the Ministry of Commerce would need to have a consultation with all concerned for resubmission for getting an extension of the LDC exemption and waivers before the next ministerial conference. 

The resubmission was to be prepared to align with the MC12 Outcome Document, where the conference acknowledged the particular challenges that graduating LDCs are going to face because of the loss of trade-related international support measures (ISMs). 

The submission should highlight, among others, the issues of affordability and public health and the loss of two to three years because of the Covid-19 pandemic. Considering all these issues, Bangladesh would need to work proactively with all other LDCs for an extension of the TRIPS waiver, especially in the pharmaceutical sector, for some more time. 

Bangladesh would also need to try for a country-specific waiver through the TRIPS Council. However, in the meantime, the MC13 conference is over, and graduated LDCs have been extended exemption for three more years after graduation based on a decision made at the WTO to support a smooth transition of LDCs. 

Following the recommendation of the seminar, a new act was made through a gazette on 13 November 2023, by revoking the Patent Act 2022 (No. 5 Act of 2022). The new Act, through its 72 clauses, is much more supportive as it has included some new provisions in detail, which will give the country some breathing space. 

Until graduation, we will avail ourselves of all benefits of TRIPS exemption. But any new molecule that comes after 2026 will need a patent before that flexibility will be availed by the country. The Bangladesh Patent Act (BPA) 2023 excluded pharmaceutical products from patent protection until the country's graduation from LDC status; also, this exemption can be extended for three more years after graduation, based on a decision made at the WTO's 13th Ministerial Conference to support a smooth transition.

BPA 2023 integrates critical TRIPS flexibilities such as choice of patentability, compulsory licencing, parallel importation, research exceptions, additional provisions, etc. These measures aim to protect public health and prevent monopoly pricing. It has also given a clear definition of patenting of small industrial innovation through the utility model (clause 42).

It also listed the items that will remain outside of the patent. Along with renewal, the patent right will be for eight years, and separate rules will be prepared to regulate the patent under the provision. 

In Chapter 3, para 2, it is mentioned that as per decisions of the TRIPS Council, pharmaceuticals and agrochemical products will be out of the patent as long as it decides. The time frame can also be extended further as per the gazette notification of the government. 

Compulsory licencing (Clause 36) has been included, which will allow the government to provide any sort of social safety, security, nutrition, health, or national economic development. For semiconductor technology, compulsory licensing can be issued for non-commercial purposes by the authority concerned if any sort of particular situation arises. If any compulsory licensing is approved under clause 36(2), then the patent holder will be given a royalty at the rate of 4% on the total sales, provided all other processes are maintained. 

Very recently, RAPID came up with a policy brief that examines the implications of LDC graduation on Bangladesh's pharmaceutical industry, focusing on medicine prices, accessibility, export dynamics, and the sector's overall resilience. They have come up with a decision that Bangladesh's graduation from LDC status is unlikely to have a substantial impact on household poverty, as significant price increases for medications due to LDC graduation per se are not anticipated. 

But for this, preparation at the home front is very important. Bangladeshi firms are facing challenges in importing chemicals, as about 100% of chemicals are imported in the country. Chemicals such as various solvents, acids, alkalis, etc., which are not produced in the country. Businesses face difficulties because of regulatory constraints. 

The country should also build an activated pharmaceutical ingredients (API) manufacturing facility to reduce dependency on imported APIs. In that respect a collective effort would need to be initiated. So far, 27 companies have obtained plots in the API park. The companies are building their finished formulation manufacturing capacities, which include both small-molecule synthetic drugs and complex biologic vaccines.

More infrastructural support in the API park, including gas connection, is required readily; CETP also needs to be operational. In that respect, the Ministry of Industries is working and will try to go for alternatives so that companies that have already invested do not have to wait for a gas connection only. 

Bangladesh can also try for potential API markets other than western-regulated markets. There are countries that have large formulation bases but no API, such as Indonesia, Pakistan, Egypt, and Kenya. Export of API to these countries will be possible if the API park can start working properly. 

Bangladesh is doing well in producing all types of dosage forms; however, the country needs to step in with biosimilar products for which there is a guideline that needs to be revised based on the revisited guidelines of the UK MHRA and WHO. 

It was informed that the stringent conditionalities for biosimilar products have been relaxed and EU and WHO regulations and guidelines have been much simpler now. DGDA would need to start working in this respect in full collaboration with the private sector and BAPI. 

Bangladesh has global accreditations from USFDA, UK MHRA, TGA, Australia, EMA, Health Canada, TEDA, Taiwan, ANVISA, Brazil, GCC (Gulf), etc. The country can be a pioneer and a hub in generic medicine; in that respect, Bangladesh would need to exploit full utilisation of its reverse engineering efforts. R&D initiatives in collaboration with universities are a must. The US FDA has approved 446 novel drugs in the USA from 2012 to 2022. The Bangladesh Association of Pharmaceutical Industries (BAPI) is following the list, which will be continuously updated up to 2026. 

Bangladesh would need to introduce as many products as possible in the local market so these products are exempted from patents. Bangladesh can take support to follow the examples of India. 

Bangladesh needs to start working in this line for which support from all concerned government organisations is very much required. FDI attraction in this area is one of the primary needs. In the past, there were some FDIs; however, they have left for several reasons. We need to explore new facilities for FDI in this sector. 

Capacity for negotiation, especially in the field of legal aspects, is another issue. In the universities now there are law departments; they need to take a plan to prepare legal experts to work equally with international experts. Bangladesh also needs skilled manpower to work as organic synthetic chemists; BAPI would need to sit with the concerned private and public universities to put forward their exact demands in that respect.

The already established expertise in the Bangladesh Council of Scientific Industrial Research (BCSIR) can be utilised; there are some good scientists available in this research organisation. However, they need high-quality lab facilities and other accessories for research. Public-private collaboration in that respect can be encouraged to work together. 

The discontinuation of export subsidies may lead to an estimated 6.9% decline in export earnings for pharmaceuticals. Bangladesh, even though it exports to a number of countries, has an amount that is not very high, and it remains almost stagnant for long. Evergreening of patents is another issue for lifetime patents; provisions can be included in the policy. 

There is an immediate need to have a translation of the patent law into English (clause 72). The Advisory Centre on WTO Law (ACWL) was established in 2001 to provide legal advice on WTO law, support in WTO dispute settlement proceedings, and training in WTO law to LDCs and countries with economies in transition. Bangladesh needs to exploit full utilisation of all this available support to sustain its pharma sector. 


Ferdaus Ara Begum is the CEO of BUILD, a public private dialogue platform that works for private sector development.


Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard. 

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