Technology Transfer for Pharm aceutical Productive Capacity in Bangladesh

Padmashree Gehl Sampath and Ermias Biadgleng (UNCTAD) Kuala Lumpur, April 29, 2010.

1

UNCTAD/CD-TFT

1

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

UNCTAD/CD-TFT

2

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

UNCTAD/CD-TFT

3

3

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

UNCTAD/CD-TFT

4

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

UNCTAD/CD-TFT

5

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.

UNCTAD/CD-TFT

6

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

UNCTAD/CD-TFT

7

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

UNCTAD/CD-TFT

8

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

9

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

UNCTAD/CD-TFT

10

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.

11

UNCTAD/CD-TFT

11

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.

UNCTAD/CD-TFT

12

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

13

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

14

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

15

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

16

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

UNCTAD/CD-TFT

17

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

18

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

19

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

20

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

21

THANK YOU

22

UNCTAD/CD-TFT

22