The total industry can broadly be classified into two categories. These are a) Patent Medicines b) Generic Medicines Patent medicines are the products that are invented by the company, who have their own research team working on their own laboratories. These products are patented for many years to enjoy the monopoly market. After years of business the formulation is sold in the market so that others can go into mass production. Generic medicines are the products that are produced In mass scale.
These are marketed by several companies under different brand name, where the formulation f this product is almost same. Prices of the products are under this category are competitive. Bangladesh mainly concentrates on this category, as labor cost is one of the lowest in the world. Growth & Trends: The growth potential of pharmaceutical Industry Is enormous. As urban population Is increasing and people are getting educated, they are now more concerned about healthcare. So the demands of medical products are rising.
In Bangladesh unhygienic conditions and poor health maintenance plans provide vast scope for the pharmaceutical firms to sell their products. On the other hand, the constant natural starters provide opportunities to pharmaceutical companies to boost Its sales. The Industry Is growing the protection of national Drug Policy 1982. But after the GAIT regulation, changes are bound to take place. Furthermore, the trend &: growth of this industry tends to be positive as the demand of medicines is rising, which have mentioned earlier.
The development of sound institutions to access and equitably distribute these resources, however, is necessary in order for an industry to obtain the greatest benefit from its factor endowment. Nonetheless, the new world economies inherited attractive endowments such as ideal weather condition, suitable size of the industry or skillful manpower. In case of pharmaceutical industries in Bangladesh, they have invested in land to increase their business widely within and across the country. Day by day this sector is making a random physical change to grasp the international market. All the companies in Bangladesh have enlarged their physical size with huge success. Pharmaceutical companies have also appointed a large number of skilled manpower for the betterment of this sector.
A huge amount of people have been trained well to successfully operate the pharmaceutical companies around the country and outside as well. Demand: Bangladesh is prone to tropical diseases, and this leads to a high demand for pharmaceutical goods. Because of this and the poor health and hygiene situations, a teddy growth in the pharmaceutical sector is possible. Demand is positively related to the changes in disposable income. Assuming that income per capita will continue continue to rise. Dacha is the largest contributor, with nearly 35% market share. Chitchatting and Sleet follow with 26% market share each. Chula has a much smaller share of 14%, but it has an immense growth potential because of the higher value sales per chemist.
Dacha also has the highest per capita expenditure on drugs. Studies have shown that people in urban areas tend to consume more pharmaceutical products compared to people living in rural areas. Arbitration is steadily increasing in Bangladesh, as more and more people move in from rural areas to live in Dacha and the other cities. Because of the increased frequency in natural disasters, people prefer to live and work in cities other than in villages. This bears a direct impact on the volume of sales of the pharmaceutical companies. As more people are living in relatively developed areas, the demand for medicine is also rising. This provides a great opportunity for the companies to increase their sales.
Market prospects and market entry strategy 1 . Macro economic environment The overall macro economic environment is quite positive and favorable for international business. Both import and export are increasing; import is increasing since the country has moved to manufacturing sector more aggressively due to availability of skilled and cheaper labor force. In order to carry out international business smoothly, the national information infrastructure (N”) has also improved. The government has introduced liberal policy to attract for the foreign investors, business and commercial organizations. The country is experiencing slow but steady growth in the Gross Domestic Product (GAP) at 5. 3%.
Key indicators of gradual improvement in the economy are positive; Per capita income has increased at IIS$ 470 Noun 2005), literacy rate has increased at 65%, average life expectancy rate has increased at 68. 2 years, annual export growth is 9. 39% while import grew only at 13%. Inflation rate has reduced at 5. 1%. Per capita expenditure on medicine has increased at more than IIS$ 4. 00, which is among then lowest in Asian countries, compared to developed countries. But, this indicates good potential for the growth of domestic market. The pharmaceuticals sector is a growth sector as mentioned in the earlier chapters. Future potential for this sector is also bright. Recent export performance has drawn the attention of the government. But, the pharmaceutical industry sector is heavily depended on imported raw materials.
Rapid growth in the export market has created opportunity to expand production capacity. The sector can be viewed at a glance from the attached sector profile 2. Availability of marketing services In Bangladesh, all kinds of marketing and market promotion services are availability. Distribution of products overall the country. A large pool of sales force has been plopped over the last 22 years who can take the products to the doorstep of the end users through 120,000 retailed Pharmacists. To organize a sales and marketing force, expert services can be taken from local source. Moreover, there are marketing and promotional agencies, distributors, indenter and stockiest.
Organizations are there to import skill development training on sales, marketing and distribution. There are trade Journals, news letters and trade bulletins specifically for the pharmaceuticals sector. There are a good number of event organizers who can organize trade fairs, exhibitions and other events. . Recommended strategy for new entrants Following the success stories of the leading companies, several factors have been considered as critical to success and these are follows: ; Quality product through quality production system ; Skilled and trained manpower for product promotion ; New and wide range of products ; Innovative promotional techniques. Strong backward linkage support with or outside the country ; Prompt and cost effective delivery and distribution network with depots ; Attractive packing and packaging with detailed specifications ; Continuous research and development for improvement of products ; Sound operational plan including marketing and financial planning In the days to come, the local market will be very competitive. A new company should be well prepared with all sorts of planning like marketing and promotion, procurement and production, distribution and delivery, sound financial management, innovative product development. A good combination of several major elements may bring success for any new entrant in this sector and these are as follows: (a) Product characteristics 1 54 companies are selling common products, such tablets, capsules, syrup (liquid) etc.
To attain competitive edge, new entrant should emphasis on new dosage forms like, Anti-biotic, drugs, inhaler, suppositories, needle free injection, patch injection etc. Herbal products have a large potential market. (b) Price Since the government strictly controls price of pharmaceutical products, a new company should adopt ‘shadow or indirect’ pricing method. (c) Trade channel New companies should adopt trade channels that minimize their distribution and other costs. Possibility should be explored to get institutional orders. Contract manufacturing can be one of the options since the revised policy allows it. Since direct product promotion activities are prohibited other means should be applied. Push selling system can be an effective technique for product promotion.
Besides, incentives in different forms may be given to the field level sales force, doctors and medical practitioners. Sponsoring various events like workshops, seminars on medicines and healthcare related issues and financing charitable healthcare activities can be adopted. (e) Joint venture arrangements Joint venture arrangement with foreign reputed pharmaceutical companies having plant for API possibly form USA, Europe-Scandinavian countries, Japan will be best option for any new entrant. (f) Buy out and mergers Recently, many Mans merged. In Bangladesh, there are dormant factories which can be bought and restarted through infusing fresh funds. Related industries of pharmaceutical companies: Pharmaceutical industry itself is a potential one in Bangladesh.
