API raw materials left to expire as price approval stalls for two years

Despite applying two years ago, pharmaceutical companies have yet to receive price approval from the Directorate General of Drug Administration (DGDA). As a result, locally produced pharmaceutical raw materials worth nearly Tk 200 million cannot be released to the market. Unable to sell the products, manufacturers say the raw materials are approaching expiry while sitting in warehouses.

Bangladesh's annual demand for pharmaceutical raw materials is estimated at $1.3 billion, with nearly 90% imported from China, India and European countries. Industry stakeholders believe that with adequate policy support and infrastructure, domestic manufacturers could produce up to half of the country's total demand, significantly reducing dependence on imports and saving substantial foreign exchange.

According to DGDA and health sector sources, companies such as ACME Laboratories and Healthcare Pharmaceuticals have begun producing active pharmaceutical ingredients (APIs) using their own initiatives and by relying on costly diesel-powered generators due to inadequate utility services.

ACME is commercially producing five API products, including Montelukast and Azithromycin. However, the company has been unable to market them because it has not received the required price certificate from the DGDA, despite applying in 2024.

Matiur Rahman Sinha, Director of ACME Laboratories, told Asia Post, "We established an international-standard API manufacturing facility and even invited the DGDA Director General to inspect it. Although we submitted our application in 2024, the government has not approved the prices even after two years. As a result, pharmaceutical raw materials worth around Tk 200 million are on the verge of expiring in our warehouses. Who will bear the responsibility for these losses?"

Healthcare Chemicals, a subsidiary of Healthcare Pharmaceuticals, is facing a similar challenge. The company is commercially producing three API molecules and has applied for price approval for four more. Due to an insufficient gas supply, it operates on diesel-powered generators, consuming about 60,000 liters of diesel every month, significantly increasing production costs.

Mohammad Layek Ali Khan, Head of Research and Development (API) at Healthcare Chemicals, told Asia Post, "Alongside the three commercially produced molecules, four API products, including Rosuvastatin and Metformin, are awaiting price approval. Although production costs have increased because of diesel usage, the government has yet to provide any update on price determination."

Mohammad Halimuzzaman, Chief Executive Officer of Healthcare Pharmaceuticals and Secretary General of the Bangladesh Association of Pharmaceutical Industries (BAPI), said the DGDA has been contacted repeatedly through letters and meetings regarding price approval.

"They have assured us several times, but they have not provided any definite timeline," he said.

The 2031 Challenge

Currently, Bangladesh produces only 10 to 15 of the approximately 200 essential pharmaceutical raw materials required by the industry.

After Bangladesh graduates from the Least Developed Country (LDC) category, it will no longer enjoy international patent waivers under the TRIPS Agreement from 2031. At that point, pharmaceutical manufacturers will have to pay substantial royalties for patented medicines, making production significantly more expensive.

Industry experts say expanding domestic API production is the only sustainable way to address the post-2031 challenges. However, bureaucratic delays are preventing even locally manufactured raw materials from reaching the market.

API Industrial Park Lacks Gas and Reliable Electricity

To promote domestic API production, the government established the API Industrial Park under the Bangladesh Small and Cottage Industries Corporation (BSCIC) in Gazaria, Munshiganj.

Built at a cost of Tk 3.31 billion, the park's 42 industrial plots were handed over to investors in 2018. However, even after several years, the park has not received uninterrupted gas or electricity supply. Manufacturers have been forced to rely on expensive diesel generators, making locally produced APIs less competitive in international markets.

A visit to the site found that although gas pipelines have been installed, there is no gas supply. Rural electricity connections are available but insufficient for industrial-scale operations. The Central Effluent Treatment Plant (CETP), constructed at a cost of approximately Tk 800 million, remains unused and is deteriorating. Security arrangements beyond the park's boundary walls are also inadequate, while most of the 42 plots remain vacant.

Mohammad Nazmul Hossain, Managing Director of Unimed Unihealth Pharmaceuticals, told Asia Post, "Because of infrastructure deficiencies and the high cost of operating generators, producing APIs domestically is now more expensive than importing them. Without uninterrupted gas, electricity and government incentives, Bangladesh cannot compete with India and China."

He added, "The government allocated land, but much more is needed, including proper security. Investors have been requesting improvements for years without receiving adequate attention. Many have become discouraged, and some have already withdrawn. However, the current government has begun discussions with companies, and we hope effective measures will be taken soon."

Tk 800 Million Effluent Treatment Plant Going to Waste

API production generates hazardous chemical waste. To protect the environment, the government built a Central Effluent Treatment Plant (CETP) costing nearly Tk 800 million to treat waste from all factories within the industrial park.

The centralized facility was expected to reduce treatment costs for individual manufacturers while simplifying environmental monitoring.

However, because no factory has entered full-scale production, the CETP has never been used. Left idle since its completion, the facility is gradually deteriorating.

DGDA Response

Regarding the prolonged delay in price approvals, Akhtar Hossain, Director of the Directorate General of Drug Administration, told Asia Post that the matter has reached the highest levels of government.

"A decision has been made to establish both an Advisory Committee and a Price Determination Committee. The advisory committee has already been formed, while the price determination committee is currently being finalized. Legal complexities have caused the delay. Once both committees become operational, they will quickly establish a mechanism for determining API prices," he said.