Registration process of over 100 made in Bangladesh drug brands from different companies are getting hampered and delayed for the Corona Virus pandemic.

Square, Beximco, Reneta, Eskayef and Incepta are the major local companies which have been trying export Bangladeshi drug abroad.

“Registration process is complicated; in European countries it takes more than five years to complete all process. In Developed market each drug product needs separate registration,” Am Faruque, former Eskaef Managing Director told Business Mirror over telephone.

The Bangladesh pharma industry has been a world rising star in generics and single player in domestic markets contributing significantly in terms of volume.

The Made in Bangladesh is currently export over 80 countries but the volume has not yet been significant due to the slow registration process.

“Our registration process for over two dozens of drug at UK and Europe are hampering for the disruption,” Abdul Muktadir. Chairman and Managing Director at Incepta Pharmaceuticals Ltd told Business Mirror.

In recent years, Bangladesh has its inherent cost advantage,  manufacturing intermediates and APIs at a cost much lower than those in China and India.

Risks from India pharma’s China linkages

Bangladesh’s large import dependence on China (nearly 50% by value) has become a significant threat to Bangladesh’s healthcare manufacturing and global supply chain. While Bangladesh pharma players over a time period have steadily migrated up the value chain to focus on value-added formulations with higher margins, but this over dependence on China has increased the threat to the nation’s health security as some of these critical APIs are crucial to mitigate Bangladesh’s growing disease burden.

Supply chain disruption for Bangladesh pharma

Any disruption in supply chain of APIs can result in significant shortages in the supply of essential drugs in Bangladesh. Some of the critical APIs for high-burden disease categories such as cardiovascular diseases, diabetes and tuberculosis are listed in the National List of Essential Drug, In fact, the current market is largely dependent on China for many antibiotic APIs manufactured by the fermentation route such as penicillin, cephalosporins and macrolides.

The increased dependency of low-cost API is mainly attributed to China’s extensive efforts towards developing economies of scale, easing regulations for bulk drug manufacturers, availability of low-cost utilities, building process efficiencies and supporting manufacturers in the form of subsidy, low taxes and fiscal incentives. Bangladesh has significantly lost out on the API manufacturing owing to the inadequate government support and API focused infrastructure coupled with complexity in getting approvals for setting up a manufacturing plant, delayed pollution clearances, high cost with low availability of utilities, regulatory and price control regime are some of the key challenges faced by the bulk drug industry

Major earnings cuts ahead for pharma firms

Drug manufactures feared that novel coronavirus, or COVID-19, pandemic has caused severe supply-side disruptions in various sectors, earnings will be cut by 10-15%. Pharma as a sector has emerged as a strong contender to drive the next leg of rally, whenever it comes. In anticipation, pharma stocks have seen a huge run up in the last 10 days. This is not just true for Bangladesh, but globally too pharma companies have performed well. While in the short term, most companies will bounce back from the last 5 year of underperformance, this time around, the leader will be different.

Relative stability, reasonable valuations

Bangladesh pharma has been relative resilient to the Covid disruption, and is poised to gain from favourable currency tailwinds and stable outlook for Bangladesh and US business Bangladesh growth has picked up (10% growth for IPM as of MAT Mar’20).

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