Bangladesh’s pharmaceutical industry faces a steep uphill battle as the country prepares to graduate from the United Nations’ list of Least Developed Countries (LDCs), thereby losing key waivers under the WTO’s TRIPS agreement, which currently allow the production of generic medicines without paying patent fees.
The TRIPS (Trade-Related Aspects of Intellectual Property Rights) waiver, valid until 2029, has enabled domestic pharmaceutical companies to manufacture patented drugs without incurring intellectual property costs, while also sourcing raw materials at significantly reduced rates.
Once Bangladesh exits LDC status, these privileges will expire, raising production costs several-fold and driving retail prices sharply upwards—even when sold at minimal profit margins.
Industry insiders warn that the resulting increase in production costs will place Bangladeshi drug manufacturers under immense pressure in a fiercely competitive global market.
While large-scale companies may manage to adapt, small and medium enterprises are expected to suffer, with many likely to shut down due to financial losses.
The country’s reliance on imported medicine may also deepen, as domestically manufactured alternatives become costlier.
Imported drugs are already several times more expensive than locally produced equivalents, which will further strain household budgets, especially among low- and middle-income groups already grappling with rising living costs.
Experts stress the urgency of preparing for this looming disruption.
A report by the Bangladesh Institute of Development Studies (BIDS) highlights that the expiry of TRIPS benefits will not only raise patent fees, but also eliminate concessions on raw material imports.
Currently, local firms source approximately 80% of their active pharmaceutical ingredients (APIs) from abroad—40% from China and 30% from India—availing preferential rates under LDC status.
The report underscores the importance of ensuring access to affordable medicine, noting that between 67 and 70% of healthcare expenses in Bangladesh are paid out-of-pocket. At present, local firms meet 98% of domestic demand and export pharmaceuticals to 151 countries, generating roughly $200 million annually.
Priti Chakraborty, Chair of Universal Medical College and Hospital and a member of the Bangladesh Chamber of Industries, termed LDC graduation a national milestone but admitted it presents a daunting challenge for the pharmaceutical sector.
She cautioned that small and medium enterprises could be particularly vulnerable, and the cost of life-saving drugs is likely to rise.
Dr Md Zakir Hossain, Secretary General of the Bangladesh Association of Pharmaceutical Industries and managing director of Delta Pharma, pointed out that only 21 local firms currently produce 41 types of APIs.
As 400 varieties are needed, around 80% must still be imported. He noted that an over-reliance on foreign APIs post-graduation could inflate domestic medicine prices and hamper exports.
He also called on the government to fast-track approvals for patent-covered medicines via the Directorate General of Drug Administration (DGDA) before LDC benefits lapse.
Doing so, he argued, would prevent multinational companies from legally challenging local production rights once patent protections are reinstated.
Professor Dr Syed Abdul Hamid of Dhaka University’s Institute of Health Economics echoed the urgency of registering unproduced but critical molecules.
He called on the DGDA to accelerate collaboration with the private sector to ensure affordable drug availability in the post-LDC era.
He warned that rising medicine costs will disproportionately affect ordinary citizens, even if the affluent remain largely unaffected.
Furthermore, a decline in local production could increase dependency on imported medicines, which are significantly more expensive and could become even costlier if monopolised.
Industry leaders argue that the only way to mitigate the impact is through rapid investment in domestic API production, research, and innovation.
They also urge the government to introduce universal health insurance, enhance company capabilities, and eliminate corruption in the healthcare sector.
The long-delayed Active Pharmaceutical Ingredients (API) Industrial Park, first initiated in 2008 and allocated plots in 2018, remains largely underutilised.
Only four companies have commenced production, hamstrung by infrastructural delays.
Muhammad Halimuzzaman, treasurer of the Bangladesh Association of Pharmaceutical Industries and CEO of Healthcare Pharmaceuticals, stated bluntly that unless strategic action is taken now, drug prices will surge post-graduation.
He urged increased API production, robust research infrastructure, and enhanced industrial capacity to withstand the post-LDC shock.
Without swift and coordinated action from both public and private sectors, Bangladesh’s pharmaceutical sector—once hailed as a development success story—may find itself grappling with dwindling competitiveness, reduced export earnings, and an uphill battle to keep medicines within reach for its citizens.
