Technology Transfer for Pharm aceutical Productive Capacity in Bangladesh
Padmashree Gehl Sampath and Ermias Biadgleng (UNCTAD) Kuala Lumpur, April 29, 2010.
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This presentation is based on: • Ermias Biadgleng and Padmashree Gehl Sampath, Technology Transfer and Local Production in Bangladesh, Draft 2010. • Gehl Sampath, P., Innovation and Competitiveness in Bangladesh’s Pharmaceutical Sector, UNU-MERIT Working paper, 2007. 2
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Presentation The significance of the case study of Bangladesh Productive Capacity for Pharmaceutical Innovation in Bangladesh; Beximco Pharma and Square Pharma. The genesis – multinational corporations
Institutional Framework Linkages in Pharmaceutical innovation Strengths and Good Practices Challenges Conclusion and issues for the future
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Bangladesh 153 million people (2008 est.) among the 49 LDC; 213.5 billion $ GDP measured at PPP (2008)
28.7% industry, 52.3% services (2007)
Unique among LDCs and many developing countries in its strength in pharmaceuticals; Declare itself self-sufficient, except for insulin, vaccine and anti-cancer; attracting the interest of international business; Started exporting to different markets. 4
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Current Capacity for Pharmaceutical Innovation in Bangladesh Secondary (Drug) Manufacturing 247 registered pharmaceutical companies 150 operational; 34 suspended, 63 non-functional
The top ten controls 74% of the market 5,300 registered brands, covering 450 generic drugs (2007) Most manufacturers undertake their own drug formulation and development; Limited Primary (API) production Domestic market estimated at 750 million US$ 5
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The genesis – multinational corporations and key current factors
The industry credits the multinational corporations that were fully operational until 198s as the sources of technology; Currently growth and capacity is based on high revenue- supported by growth in household income and remittance; Other factors, include low labor cost, access to cheaper API in the region.
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Square Pharmaceutical Limited the leading company- 19.48 % market share with authorized capital of ~ $ 73.5 million, Markets 525 products-Very strong in 44 products in injectable dosage forms Its net profit in 2009 was ~ $ 28 million Currently exporting to more than 34 countries Facilities include, three units for drugs, one unit for API (from advanced intermediary stage) and others for pesticide and pet. 7
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Beximco Pharmaceutical Limited (BPL) Considered 2nd largest with 7.22% market share With authorized capital of ~ $ 29.4 million; Its net profit in 2008 was ~ US$ 8 million Leads in export from Bangladesh; Markets 410 product-Very strong in IV Fluids in the local market with 40-45 % market share the niche products include, oral solid dosage (OSD), and CFC free metered dose inhaler (MDI) and API from advanced intermediary stage. 8
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Other companies ACME- considered 3rd largest, strong in rural market, with 325 products Notable for introducing Baby zinck - launched with the help of Bill and Melinda Gates Foundation and based on the technology (formulation) of L'Oréal;
Advanced Chemicals Industry- previously Imperial Chemical Industry Renata Ltd.- previously Pfizer (Bangladesh) Aristopharma- 9th largest, investing for export; Nuvista Ltd formerly Organon (Bangladesh). UNCTAD/CD-TFT
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The Institutional Framework in Bangladesh Science and technology policy (1986) -emphasis on tech competence and self-reliance; Ongoing revision (draft as of Feb. 2010) shift to Institutional mechanism for collaboration and linkages, bottom up approach- policies to be developed for each sector, including pharmaceutical sub-sector; Priority to the production of basic materials, basic pharmaceuticals, and in-house R&D capabilities. 10
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Industrial and Investment Policy (2009) Highly export oriented- limited incentives for domestic supply of medicine; e.g land and utility; In finance - Pharmaceuticals companies rely on commercial loans and capital market, also benefits from income tax holiday for re-investment; limited foreign exchange allocation for export operations of pharmaceutical companies;
API imported at much lower rate than MFN but at zero if imported 100% for export.
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Intellectual Property Policy 1911 Patent and Design law, interpreted not to apply to pharmaceutical product patents; Industry takes the TRIPS flexibility as key issue; No exclusivity for pharmaceutical test data; Draft Law (2005) maintain the transition period lasting until 2016; propose for adoption of mailbox application procedure; Does not appear to be a legislative priority; Its adoption may trigger the mailbox application system which is not required for LDCs.
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National Drug Policy 1982 and 2005 Restrictions on operation of multinational corporations, except for production of vitamins (19982) and production for export (2005); Contract manufacturing permitted since 2005; No importation of drugs or close substitutes that are being produced in the country; Coordinates competitive import of API Price control for 209 products- but implementation is very limited to~ 45 products UNCTAD/CD-TFT
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GMP and drug quality control Bangladesh promoted as ‘non-regulated’ market by the pharmaceutical industry; No uniform follow-up of compliance once license is issued and a ‘block list’ of raw materials is approved; Quality of drugs appears to be investigated after incidents occur; Most small companies are financially stressed; The DA has two testing labs, but not upgraded yet and has less than half of the staff it was supposed to have UNCTAD/CD-TFT
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GMP and drug quality control (3) Square and Beximco- securing foreign accreditation; Both investing for more accreditation and acquire technologies from advanced economies, Not all companies think foreign accreditation is the way forward; a move to ‘regulatory based’ quality and safety control is timely UNCTAD/CD-TFT
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Linkages in Pharmaceutical innovation Macro Poor linkages Lack of scientific culture Bureaucratic rigidity Weak public support.
Meso Lack of access to technology. Weak scientific infrastructure Inadequate human capital formation Institutional instability
Micro Intellectual isolation of researchers Lack of incentives for collaboration
Source: Gehl Sampath, 2010 UNCTAD/CD-TFT
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Linkages in Pharmaceutical innovation (2) FY2007 in primarily, secondary and tertiary levels of education Bangladesh perform below the regional average for net enrollment; a wide array of institution of engaged in health research and education More 74 public research and education, more than 50 private education centres that provide pharmacy courses, around half of which are accredited by government
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Linkages in Pharmaceutical innovation (3) very weak collaboration between pharmaceutical companies and public R&D institutions, universities; limited involvement of research centres in new product and process development; lack of funding for research centres; extensive specialisation of companies on formulation and production technology (lack of demand) UNCTAD/CD-TFT
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Strengths and Good Practices Comprehensive product range; Beximco’s facilities are qualified by Multinationals (GSK for MDI and Roche for OSD); TGA of Australia, the Gulf Central Committee for Drug Registration and Anvisa of Brazil.
Square’s facility is approved by UK Medicines and Healthcare Products Regulatory Agency facility at Pabna -ISO 9001 Certificate, enlisted by UNICEF. UNCTAD/CD-TFT
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Challenges Limitations on API production: 80% API imported Limitations on technologies for GMP and R&D Labs not up-grades and no central reference lab;
No capacity in vaccine, insulin etc systemic challenges- allocation of land, finance for R&D, foreign currency for export, and energy and poor quality of regulations; Export at limited stage- due to weak API production. UNCTAD/CD-TFT
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Conclusion and issues for the future To sustain the success, Bangladesh needs to: Urgently develop a STI policy and structure for pharmaceutical sub-sector, including addressing the problem of linkages in R&D Improve both the governance and the capacity problems on quality and safety, and price control Address the competiveness challenges in API (technical capacity, incentives and API park); Leverage support for vaccine technologies; UNCTAD/CD-TFT
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THANK YOU
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