Contract manufacturing can boost medicine exports to Tk 200b a year

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Contract manufacturing can boost medicine exports to Tk 200b a year

Jubair Hasan

Bangladesh can export drugs worth Tk200 billion a year if the local medicine makers upgrade their facilities to a level that’ll enable them to do contract manufacturing for foreign pharmaceuticals, experts said Sunday.

Drug manufacturing is becoming costly in the highly regulated western market, prompting major pharmaceutical companies to contract out drug making to companies in low-cost countries.

“Contract manufacturing is one of the major growth areas in global drug industry. And Bangladeshi companies can be one of the major beneficiaries of the fast growing sector,” said ABM Faroque, president of Bangladesh Pharmaceuticals Society (BPS).

“The country’s top 10-12 drug makers have state-of-the-art drug plants and if they upgrade their facilities further, they’ll be in a position to sign lucrative contract manufacturing deals with foreign companies,” said Faroque, also a professor of pharmaceutical technology at Dhaka University.

“It will pave the way for a new revolution in the pharmaceutical sector. It could be our next garment industry and create hundreds of thousands of high-paid jobs,” he said.

Under the system, foreign medicine companies visit local pharmaceutical plants to inspect their facilities and manufacturing standards. If they are convinced with the standards, the companies place manufacturing orders in exchange for annual fees.

The contracted companies manufacture medicines following strict formula given by the foreign firms and then ship the medicines back to the buyers.

“I know several local firms are now considering signing contract manufacturing deals with foreign companies from the European Union and North American,” Faroque said.

He made the comments during a two-day international conference on contract manufacturing in the city. The BPS and the Canada-based Global Strategy Exchange (GSE) organised the event at a hotel.

Drug experts from the United States, the European Union and Canada shared their experience during the conference and urged Bangladeshi firms to invest more in improving their production facilities.

Faroque said leading drug makers such as Square, Beximco, Incepta, ACI and Renata and Aristopharma have upgraded and expanded their manufacturing facilities in recent years, keeping their eyes on export market.

“They will need further up-gradation of their plants to woo foreign buyers for contract manufacturing jobs. They will also have to train their workers and pharmacists to the level of foreign countries,” he said.

Faroque said studies by the BPS have found that the contract manufacturing by the local companies could alone fetch export orders worth Tk 200 billion. Presently India, Turkey and China dominate the sector.

According to BPS, the medicine exports have increased to Tk 10 billion during the period of April-March this fiscal year, which was Tk 6.0 billion during the same period last year.

Bangladeshi drug makers are now exporting medicines to 72 countries across the globe – mainly to the poor African and Asian nations. The companies are also making up 97 per cent of the local medicine demand.

Export value of pharmaceuticals, though small, is growing at 50 per cent per year. Exports increased from $8.2 million in 2004 to $28.3 million in 2007 and expanded further in last two of years.

Dr Sayma Ali, head of marketing of Renata Pharmaceuticals, said contract manufacturing can help transfer costly and most-modern technology to Bangladesh.

“It cuts production costs, helps introduce good manufacturing practices and makes local firms more efficient,” she said.

Ali said a few leading medicine manufacturers have got green signals from EU markets to export medicines under the system recently. But they did not step into the USA market, which is highly regulated.

Noor Hossain, General Manager of Aristopharma, said Bangladeshi companies now follow good manufacturing practice (GMP) standards, set by the UN World Health Organisation (WHO).

“I am confident that our plants will meet the standards required by top global firms,” he said. “It’s a matter of time before the foreign firms make Bangladesh a top destination for contract manufacturing jobs.”