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Bangladesh Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, Sep 2011, Pages: 89
Bangladesh Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bangladesh's pharmaceuticals and healthcare industry.
Bangladesh’s pharmaceutical industry, which was worth US$1.40bn in 2010, is fairly typical for South Asia. Growth is high, but per-capita spending remains low. The market is also characterised by the ability of those on high incomes to purchase expensive patented drugs, while the vast majority of the population make do with frequently sub-standard over-the-counter (OTC) preparations. Local pharmaceutical companies and those multinationals with manufacturing facilities in Bangladesh cater for approximately 95% of domestic demand. Of the 49 UN-decreed Least Developed Countries (LDCs), Bangladesh is the only one that is nearly self-sufficient in terms of pharmaceutical production.
Headline Expenditure Projections
- Pharmaceuticals: BDT97.45bn (US$1.40bn) in 2010 to BDT113.73bn (US$1.57bn) in 2011; +16.7% in local currency terms and +12.1% in US dollar terms. Forecast up moderately from Q311 due to macroeconomic factors.
- Healthcare: BDT241.68bn (US$3.47bn) in 2010 to BDT271.18bn (US$3.74bn) in 2011; +12.2% in local currency terms and +7.8% in US dollar terms. Forecast up marginally from Q311.
- Medical devices: BDT11.47bn (US$165mn) in 2010 to US$12.60bn (US$174mn) in 2011; +9.9% in local currency terms and +5.5% in US dollar terms. Forecast up marginally from Q311 due to analyst modification.
Business Environment Rating: Bangladesh’s pharmaceutical Business Environment Rating (BER) in Q411 remains unchanged at 40.6 out of 100, which is well below the region’s average score of 53.0. The country has moved down one place to occupy 16th position, behind Pakistan, and has an unchanged Industry Rewards score of 43. Despite its current ranking, BMI expects Bangladesh’s position to improve over the medium term as a result of rising population numbers, economic improvements and the efforts made by domestic firms to expand both their products portfolios and overseas markets.
Key Trends & Developments
- Bangladesh remains at a high risk of encountering an outbreak of avian influenza. After two successive years of non incidence, 71 new outbreaks had been reported by the end of May 2011. As part of efforts to combat a possible epidemic, more than 1,000 field staff from the Department of Livestock Services (DLS) were deployed to poultry firms around the country.
Using cell phone and web-based SMS portals, members of the DLS have been able to report outbreaks swiftly. The SMS surveillance system, which was initially introduced by USAID, is supported by the Bangladesh government’s Avian Influenza Preparedness and Response Project, which is sponsored by the World Bank and is seen as a means of addressing the threat posed by the influenza virus to the human population.
- The World Bank has approved US$359m in credit for Bangladesh’s Health Sector Development Program (HSDP), which aims to support the Bangladesh government’s efforts to improve healthcare services, particularly for women and children, as well as poor and marginalised members of society. So far, the World Bank has contributed US$300mn to the Health, Nutrition and Population Sector Program, and has helped mobilise a total of US$1.2bn in donor assistance.
- Bangladesh’s overall export earnings reached their highest ever rate of growth – an expansion of 41.47%. According to official statistics released by the Bangladesh Ministry of Commerce, the country earned US$22.92bn in export earnings against an annual target of US$18.50bn over the July-June 2010-2011 fiscal year. This compared with US$16.20bn earned over the same period in the 2009-2010 fiscal year. Export earnings of US$2.38bn were recorded in the month of June 2011 alone, marking a 40% increase in revenue. The figure compares with US$1.70bn earned during the same month in 2010.
- Beximco announced that it has received GMP accreditation from the Regulatory Authority of Austria for its oral solid (tablets and capsules) and sterile eye drop facilities at Tongi, Dhaka. The granting of regulatory approval marks a significant milestone for the company, which will now be able to expand its exports to the lucrative generic drug markets of Europe.
Economic View: Final figures for FY2009/10 showed that real GDP growth in Bangladesh came in at a healthy 5.8%, marginally down from the initial estimate of 6.0%. These latest figures have not led to a revision of BMI’s below-consensus FY2010/11 real GDP forecast of 5.6%, as we maintain our view that private consumption will under-perform this year as remittance growth remains flat and inflation continues to pick up. The country therefore appears to be heading towards a more balanced path to growth. In the case of the pharmaceutical sector, increased wealth should translate into greater out-ofpocket spending by consumers and a greater proportion of public funds being directed to healthcare projects, especially among the poor.
Political View: The Bangladesh government is committed to expanding access to medical services in general and pharmaceuticals in particular. Under the constitution of the People’s Republic of Bangladesh (amended May 17 2004), the state regards ‘raising the level of nutrition and the improvement of public health’ as one of its primary duties. Although healthcare is mainly provided through government-run hospitals or private clinics, the country’s state-run healthcare facilities are oversubscribed, short-staffed and lacking equipment, especially those outside of the large cities. Nevertheless, efforts are being made to improve healthcare services.
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