Policy Space for Building Production Capabilities in the Pharmaceuticals Sector in Low- and Middle-Income Countries: Evidence from Bangladesh
-
Mustafizur Rahman
, Veronika J. Wirtz , Warren A. Kaplan , Rachel Denae Thrasherand Kevin P. Gallagher
Abstract
Over the past four decades Bangladesh has built enough domestic productive capacity in the pharmaceuticals and related industries to generate manufacturing capacity and employment to provide access to medicines in the country and to become a modest exporter of medicines as well. This paper traces the role played by government policy in fostering Bangladesh’s burgeoning pharmaceuticals sector and then examines the extent to which such policies would have been permissible under World Trade Organization (WTO) rules and the rules of recent trade and investment treaties. Bangladesh has not had to adhere to such rules given its status as a Least Developed Country (LDC) but will face those rules as it may graduate from LDC status in the coming years. We find that a significant amount of Bangladesh’s policies would not have been permitted under the WTO, and even more policy space would be constrained under other regional and bilateral trade and investment treaties. These findings reveal that Bangladesh will face a series of challenges as it graduates from LDC status in its efforts to build its domestic pharmaceutical industry moving forward. Our findings also pinpoint challenges for current WTO and other trade and investment treaty members who now seek to build domestic productive capacity in this sector in the wake of the COVID-19 pandemic.
References
Aghion, P., M. Dewatripont, L. Du, A. Harrison, P. Legros, and J. Cai. 2015. “Industrial Policy and Competition.” National Bureau of Economic Research Working Paper 18048: 1–32, doi:https://doi.org/10.3386/w18048.Search in Google Scholar
Ahonkhai, V., S. F. Martins, A. Portet, M., Lumpkin, and D. Hartman. 2016. “Speeding Access to Vaccines and Medicines in Low- and Middle-Income Countries: A Case for Change and a Framework for Optimized Product Market Authorization.” PLoS One 11 (11): e0166515. https://doi.org/10.1371/journal.pone.0166515.Search in Google Scholar
Alam, G. M., and A. Q. Al-Amin. 2014. “Role of Pharmacy Education in National Development of Bangladesh: A Scope for Public and Private Sectors.” Indian Journal of Pharmaceutical Education and Research 48 (4): 11–21. https://doi.org/10.5530/ijper.48.4.3.Search in Google Scholar
Amin, M. N., and T. Sonobe. 2013. “The Success of the Industrial Development Policy in the Pharmaceutical Industry in Bangladesh.” GRIPS Discussion Paper 13-07. National Graduate Institute for Policy Studies. Also available at https://econpapers.repec.org/paper/ngidpaper/13-07.htm.Search in Google Scholar
Amsden, A. 2001. The Rise of “The Rest”: Challenges to the West from Late-Industrializing Economies. The Rise of “The Rest”. Oxford: Oxford University Press. Also available at https://www.oxfordscholarship.com/view/10.1093/0195139690.001.0001/acprof-9780195139693.10.1093/0195139690.001.0001Search in Google Scholar
Bangladesh Bank. 2021a. Category-Wise Imports. Also available at https://bb.org.bd/econdata/import/yearly/category-wise_import_payments.pdf.Search in Google Scholar
Bangladesh Bank. 2021b. Import of API. Also available at https://www.bb.org.bd/openpdf.php.Search in Google Scholar
Bangladesh Bureau of Statistics. 2018. “Labor Force Survey Bangladesh 2016–17.” Dhaka, Bangladesh: Bangladesh Bureau of Statistics. Also available at http://203.112.218.65:8008/WebTestApplication/userfiles/Image/LatestReports/LFS_2016-17.pdf.Search in Google Scholar
Bangladesh-Denmark. 2013. “Agreement on the Promotion and Reciprocal Protection of Investments Between the Government of the People’s Republic of Bangladesh and the Kingdom of Denmark.” investmentpolicy.unctad.org. Also available at https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/5125/download.Search in Google Scholar
Bangladesh-India. 2011. “Agreement Between the Government of the Republic of India and the Government of the People’s Republic of Bangladesh for the Promotion and Protection of Investments.” investmentpolicy.unctad.org. Also available at https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/265/download.Search in Google Scholar
Bangladesh-Thailand. 2002. “Agreement Between the Government of the People’s Republic of Bangladesh and the Government of the Kingdom of Thailand for the Promotion and Reciprocal Protection of Investments.” investmentpolicy.unctad.org. Also available at https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/5130/download.Search in Google Scholar
Bangladesh-Turkey. 2012. “Agreement Between the Government of the Republic of Turkey and the Government of the People’s Republic of Bangladesh Concerning the Reciprocal Promotion and Protection of Investments.” investmentpolicy.unctad.org. Also available at https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/274/download.Search in Google Scholar
Bangladesh-UK. 1980. “Agreement Between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People’s Republic of Bangladesh for the Promotion and Protection of Investments.” investmentpolicy.unctad.org. Also available at https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/277/download.Search in Google Scholar
Bangladesh-U.S. 1989. “Treaty Between the United States of America and the People’s Republic of Bangladesh Concerning the Reciprocal Encouragement and Protection of Investment.” investmentpolicy.unctad.org. Also available at https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/278/download.Search in Google Scholar
Bangladesh-Vietnam. 2005. “Agreement on the Promotion and Reciprocal Protection of Investments Between the Government of the Socialist Republic of Vietnam and the Government of the People’s Republic of Bangladesh.” investmentpolicy.unctad.org. Also available at https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/5131/download.Search in Google Scholar
Barton, D. C. 2020. Annual Revenue of Top 10 Big Pharma Companies. Thepharmaletter. London. Available at https://www.thepharmaletter.com/article/annual-revenue-of-top-10-big-pharma-companies (accessed March 3, 2020).Search in Google Scholar
Brazil – Measures Affecting Patent Protection (Brazil – Patent Protection). 2001. Appellate Body Report, DS199. Geneva: World Trade Organization. Available at https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds199_e.htm (visited December 16, 2021).Search in Google Scholar
Canada – Certain Measures Affecting the Renewable Energy Generation Sector (Canada – Renewable Energy). 2013. Appellate Body Report, DS412. Geneva: World Trade Organization. Available at https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds412_e.htm (accessed March 15, 2022).Search in Google Scholar
Canada-Australia-Brunei-Chile-Japan-Malaysia-Mexico-New Zealand-Peru-Singapore-Viet Nam. 2018. “Comprehensive and Progressive Agreement for Trans-Pacific Partnership.” Government of Canada. Also available at https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/tpp-ptp/text-texte/toc-tdm.aspx?lang=eng.Search in Google Scholar
Chang, H.-J., and A. Andreoni. 2020. “Industrial Policy in the 21st Century.” Development and Change 51 (2): 324–51. https://doi.org/10.1111/dech.12570.Search in Google Scholar
CPD. 2020. An Analysis of the National Budget for FY2020-21. Also available at https://cpd.org.bd/unrealistic-fiscal-framework-demands-an-early-budget-revision-cpd/.Search in Google Scholar
DGDA. n.d. “Allopathic Drug Database.” Database. n.d. Also available at https://dgda.gov.bd/index.php/manufacturers/allopathic.Search in Google Scholar
DGDA. 2017. “Guidelines for the Submission of Bangladesh Common Technical Document.” Director General of Drug Administration (DGDA). Also available at https://dgda.gov.bd/index.php/guidelines1-for-the-submission-of-bangladesh-common-technical-document/file.Search in Google Scholar
DGDA. 2019. “DGDA Annual Report 2018–2019.” Dhaka, Bangladesh: Directorate General of Drug Administration (DGDA). Also available at https://www.dgda.gov.bd/index.php/downloads/annual-information/620-dgda-annual-report-2018-19.Search in Google Scholar
EBL. 2019. Pharmaceutical Industry of Bangladesh: The Multi-Billion Industry. Also available at https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwj1xfbH9oX0AhUr6XMBHTHqBF8QFnoECAYQAQ&url=http%3A%2F%2Fwww.eblsecurities.com%2FAM_Resources%2FAM_ResearchReports%2FSectorReport%2FPharmaceuticals%2520Industry%2520of%2520Bangladesh.pdf&usg=AOvVaw1gV4aFF5qVT5OxajVw-4ub.Search in Google Scholar
Eli Lilly and Company v. Government of Canada. 2021. International CEntre for the Settlement of Investment Disputes. Case No. UNCT/14/2. Washington, D.C.: ICSID. https://www.italaw.com/sites/default/files/case-documents/italaw8546.pdf (visited December 13, 2021).Search in Google Scholar
Embassy of the People’s Republic of China in the People’s Republic of Bangladesh (“Chinese Embassy in Bangladesh”). 2021. “Signing Ceremony of the MoU on Cooperation for COVID-19 Vaccine Between Sinopharm Group and Incepta Vaccine Ltd is Held Today.” Embassy Bilateral Activities. Dhaka: Chinese Embassy in Bangladesh. https://www.mfa.gov.cn/ce/cebd/eng/zmjw/t1899825.htm (visited December 6, 2021).Search in Google Scholar
Export Promotion Bureau (EPB), Bangladesh. 2021. Bangladesh Export Data. Also available at http://epb.gov.bd/site/view/epb_export_data/-.Search in Google Scholar
Fan, P. 2008. Innovation Capacity and Economic Development: China and India. United Nations University World Institute for Development Economics Research (UNU-WIDER), Research Paper, No. 2008/31. Helsinki, Finland: UNU-WIDER. Also available at http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.578.2294&rep=rep1&type=pdf (visited November 23, 2021).Search in Google Scholar
Fan, P. 2018. “Catching Up in Economic Transition: Innovation in the People’s Republic of China and India.” Asian Development Bank InstituteADBI Working Paper 809. Tokyo: Asian Development Bank Institute. https://www.adb.org/publications/catching-economic-transition-innovation-prc-and-india (visited November 23, 2021).10.2139/ssrn.3191760Search in Google Scholar
Gallagher, K. P., ed. 2005. Putting Development First. London: Zed Books.Search in Google Scholar
Gay, D., and K. Gallagher. 2020. “The Need to Extend the WTO TRIPS Pharmaceuticals Transition Period for LDCs in the COVID-19 Era: Evidence from Bangladesh.” CDP Policy Review No. 10. United Nations Department of Economic and Social Affairs: Economic Analysis. Also available at https://www.un.org/development/desa/dpad/publication/the-need-to-extend-the-wto-trips-pharmaceuticals-transition-period-for-ldcs-in-the-covid-19-era-evidence-from-bangladesh/.Search in Google Scholar
General Agreement on Tariffs and Trade (GATT).” 1947. U.N.T.S. 55: 194.Search in Google Scholar
Gleeson, D., J. Lexthin, R. Labonte, B. Townsend, M.-A. Gagnon, J. Kohler, L. Forman, and K. C. Shadlen. 2019. “Analyzing the Impact of Trade and Investment Agreements on Pharmaceutical Policy: Provisions, Pathways and Potential Impacts.” Globalization and Health 15: 78. https://doi.org/10.1186/s12992-019-0518-2.Search in Google Scholar
Government of Bangladesh. 1911. The Patent and Designs Act, 1911 (Act. No. II of 1911). Also available at http://bdlaws.minlaw.gov.bd/act-details-94.html (accessed March 15, 2022).Search in Google Scholar
Government of Bangladesh. 1982. The Drugs (Control) Ordinance, 1982 (Ordinance No. VIII of 1982). 1982. Also available at http://bdlaws.minlaw.gov.bd/act-623.html (accessed March 15, 2022).Search in Google Scholar
Hossain Ovi, I., and N. Mahmud. 2019. “Banglaesh Pharmaceutical Industry Blooms Bigger.” Dhaka Tribune, 2019, sec. Business. Also available at https://www.dhakatribune.com/business/2019/08/22/bangladesh-pharmaceutical-industry-blooms-bigger.Search in Google Scholar
India – Certain Measure Relating to Solar Cells and Solar Modules. 2016. Appellate Body Report, DS456. Geneva: World Trade Organization.Search in Google Scholar
India – Export Related Measures. 2019. Panel Report, DS541. Geneva: World Trade Organization.Search in Google Scholar
Intellectual Property Policy (Draft). 2018. Ministry of Industries, Government of the People’s Republic of Bangladesh. Also available at https://moind.portal.gov.bd/sites/default/files/files/moind.portal.gov.bd/notices/56861395_f4d0_465c_8c81_bc7f59141e7c/NIP%20Policy%202018%20(Draft).pdf.Search in Google Scholar
International Trade Commission (ITC) Trade, Map. 2021. “ITC Trade Map Database.” Database. Washington, D.C.: ITC. https://www.trademap.org/Bilateral_TS.aspx?nvpm=1%7c156%7c%7c000%7c%7c30%7c%7c%7c2%7c1%7c1%7c2%7c2%7c1%7c1%7c1%7c1%7c1 (visited December 16, 2021).Search in Google Scholar
IQVIA. 2021. Top Selling Drugs in Bangladesh. Dhaka: IQVIA. https://www.gazipurkontho.com.bd/2021/10/13/%E0%A6%B0%E0%A7%8B%E0%A6%97%E0%A7%80%E0%A6%B0-%E0%A6%9A%E0%A6%BF%E0%A6%95%E0%A6%BF%E0%A7%8E%E0%A6%B8%E0%A6%BE-%E0%A6%AC%E0%A7%8D%E0%A6%AF%E0%A7%9F%E0%A7%87%E0%A6%B0-%E0%A7%AC%E0%A7%A9-%E0%A6%B6/ (visited December 16, 2021).Search in Google Scholar
Islam, D., W. A. Kaplan, V. J. Wirtz, and K. P. Gallagher. 2020. The Social Costs of Graduating from Least Developed Country Status: Analyzing the Impact of Increased Protection on Insulin Prices in Bangladesh. GEGI Working Paper 038. Boston: Global Development Policy Center.Search in Google Scholar
JT Global. 2021. “Pharmaceuticals”. Tokyo: Japan Tobacco Inc. Available at https://www.jt.com/sustainability/pharmaceutical/index.html (accessed March 15, 2022).Search in Google Scholar
Kashem, A. 2021. “Bangladesh Decides to Join Largest Trade Bloc.” The Business Standard. Dhaka, Bangladesh. https://www.tbsnews.net/economy/bangladesh-decides-join-largest-trade-bloc-299347 (visited December 10, 2021).Search in Google Scholar
Ministry of Commerce, Government of Bangladesh. 2018. National Active Pharmaceutical Ingredients and Laboratory Reagents Production and Export Policy. Also available at https://mincom.gov.bd/sites/default/files/files/mincom.portal.gov.bd/policies/275863ac_df4b_4050_a9db_9e5451689cd4/API_10(10.5.18).pdf.Search in Google Scholar
Ministry of Health and Family Welfare. 2005. National Drug Policy 2005. Also available at https://www.who.int/docs/default-source/searo/hsd/edm/nmp-ban-2005-goweb-ok.pdf?sfvrsn=101bc39d_2.Search in Google Scholar
Ministry of Health and Family Welfare. 2016. National Drug Policy 2016.Search in Google Scholar
Mohiuddin, A. K. 2019. “An A–Z Pharmaceutical Industry: Bangladesh Perspective.” Asian Journal of Research in Pharmaceutical Sciences 9 (1): 17–28. https://doi.org/10.5958/2231-5659.2019.00004.3.Search in Google Scholar
Morgan, S. G., B. Yau, and M. M. Lumpkin. 2017. “The Cost of Entry: An Analysis of Pharmaceutical Registration Fees in Low-, Middle-, and High-Income Countries.” PLoS One 12 (8): e0182742. https://doi.org/10.1371/journal.pone.0182742.Search in Google Scholar
Murshid, M., and M. Haque. 2019. “Bangladesh National Drug Policy 1982–2016 and Recommendations in Policy Aspects.” Eurasian Journal of Emergency Medicine 18: 104–9. https://doi.org/10.4274/eajem.galenos.2019.43765.Search in Google Scholar
Niti, N. S. 2019. “Potentials of Bangladesh Pharmaceutical Industry.” Global Journal of Human-Social Science: Interdisciplinary 19 (1): 1–9.Search in Google Scholar
Pharmapproach. June 14, 2021. “Top 10 Pharmaceutical Companies in the World”. Pharmapproach.com. Available at https://www.pharmapproach.com/top-10-pharmaceutical-companies-in-the-world/ (accessed April 6, 2022).Search in Google Scholar
Privett, N., and D. Gonsalvez. 2014. “The Top Ten Global Health Supply Chain Issues: Perspectives from the Field.” Operations Research for Health Care 3 (4): 226–30. https://doi.org/10.1016/j.orhc.2014.09.002.Search in Google Scholar
Rahman, M., and S. M. Farin. 2018. Research Report 2: WTO Decision on TRIPS and Public Health: A Window of Opportunity for Bangladesh’s Pharmaceutical Industry. Dhaka: Center for Policy Dialogue. Also available at https://cpd.org.bd/wp-content/uploads/2018/08/Research-Report-2-Rahman-and-Farin-2018_WTO-Decision-on-TRIPS-and-Public-Health.pdf.Search in Google Scholar
Razzaque, M. A., R. I. Rabi, and H. Akib. 2020. “Bangladesh’s Pharmaceutica Exports: Trends, Market Prospects, and Policies.” In Navigating New Waters: Unleashing Bangladesh’s Export Potential for Smooth LDC Graduation, edited by M. A. Razzaque, 363–408. Dhaka: Bangladesh Enterprise Institute.Search in Google Scholar
Regional Comprehensive Economic Partnership (RCEP). Nov. 15, 2020. Jakarta: The ASEAN Secretariat. Available at https://rcepsec.org/legal-text/ (visited March 15, 2022).Search in Google Scholar
SafeMeds4all. n.d. Sales. n.d. Also available at https://www.safemeds4all.com/.Search in Google Scholar
Saipem, S.p.A.v. The People’s Republic of Bangladesh, International Centre for the Settlement of Investment Disputes, Case No. ARB/05/7. Washington, D.C.: ICSID. https://www.italaw.com/sites/default/files/case-documents/ita0734.pdf (visited December 13, 2021).Search in Google Scholar
South Centre. 2020. The End of the LDC Transition Period for Pharmaceutical Products Under the TRIPS Agreement Upon LDC Graduation: Implications for Bangladesh. Geneva: South Centre.Search in Google Scholar
Tabacek, K. 2020. Small Group of Rich Nations Have Bought up More than Half the Future Supply of Leading COVID-19 Vaccine Contenders. Nairobi, Kenya: Oxfam International. https://www.oxfam.org/en/press-releases/small-group-rich-nations-have-bought-more-half-future-supply-leading-covid-19 (accessed September 17, 2020).Search in Google Scholar
The World Bank. 1993. The East Asian Miracle: Economic Growth and Public Policy. Oxford: Oxford University Press. Also available at http://documents1.worldbank.org/curated/en/975081468244550798/pdf/multi-page.pdf.Search in Google Scholar
Tuhin, A. H. 2020. ICB Raises Investment In Renata. The Business Standard, sec. Stocks. Dhaka, Bangladesh. Available at https://www.tbsnews.net/economy/stock/icb-raises-investment-renata-61564 (accessed March 15, 2022).Search in Google Scholar
UNDESA. 2020. “COVID-19 Testing in LDCs – Status Report of 30 Sep 2020.” United Nations. Also available at https://www.un.org/development/desa/dpad/wp-content/uploads/sites/45/LDC-testing-30-Sep.pdf.Search in Google Scholar
United States – Certain Measures Relating to the Renewable Energy Sector (US – Renewable Energy). 2019. Panel Report, DS510. Geneva: World Trade Organization.Search in Google Scholar
USAID. 2019. USAID/Bangladesh Comprehensive Private Sector Assessment. Dhaka: USAID/Bangladesh. Also available at https://pdf.usaid.gov/pdf_docs/PA00TWMH.pdf.Search in Google Scholar
USP. 2020. USP Statement on India Export Restrictions of 26 Finished Drug Products and Active Pharmaceutical Ingredients (APIs). Also available at https://www.usp.org/news/usp-statement-on-india-export-restrictions-of-26-finished-drug-products-and-apis.Search in Google Scholar
Wade, R. 2003. Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization. Princeton: Princeton University Press. Also available at https://press.princeton.edu/books/paperback/9780691117294/governing-the-market.Search in Google Scholar
World Health Organization (WHO). n.d. “Welcome to Medicines Prequalification.” WHO – Prequalification of Medical Products (IVDs, Medicines, Vaccines and Immunization Devices, Vector Control). n.d. Also available at https://extranet.who.int/pqweb/medicines.Search in Google Scholar
World Trade Organization. 1994. “Agreement on Trade-Related Aspects of Intellectual Property Rights.” International Legal Materials 33: 1197.Search in Google Scholar
World Trade Organization. 1994. “Agreement on Subsidies and Countervailing Measures.” United Nations Treaty Series 1868: 14–153.Search in Google Scholar
World Trade Organization. 1994. “Agreement on Trade-Related Investment Measures.” United Nations Treaty Series 1868: 186–200.Search in Google Scholar
World Trade Organization. 2019. Trade Policy Review: Bangladesh. Also available at https://www.wto.org/english/tratop_e/tpr_e/tp485_e.htm.Search in Google Scholar
Wouters, O. J., M. McKee, and J. Luyten. 2020. “Estimated Research and Development Investment Needed to Bring a New Medicine to Market, 2009–2018.” JAMA 323 (9): 844–53. https://doi.org/10.1001/jama.2020.1166.Search in Google Scholar
© 2022 Walter de Gruyter GmbH, Berlin/Boston
Articles in the same Issue
- Frontmatter
- Research Foundation
- Changed Industrial Relationship by Offshoring Threat and Labor Share: An Empirical Game-Theoretic Analysis
- Policy Analysis
- Emerging Markets Interest Rates, International Reserves and Net Foreign Assets
- Political Domination and Economic Dispossession of Farmers: The Case of Land Acquisition for Special Economic Zones in India
- Policy Space for Building Production Capabilities in the Pharmaceuticals Sector in Low- and Middle-Income Countries: Evidence from Bangladesh
- The Real Exchange Rate Policy Trilemma in Surplus-Labor Developing Economies
Articles in the same Issue
- Frontmatter
- Research Foundation
- Changed Industrial Relationship by Offshoring Threat and Labor Share: An Empirical Game-Theoretic Analysis
- Policy Analysis
- Emerging Markets Interest Rates, International Reserves and Net Foreign Assets
- Political Domination and Economic Dispossession of Farmers: The Case of Land Acquisition for Special Economic Zones in India
- Policy Space for Building Production Capabilities in the Pharmaceuticals Sector in Low- and Middle-Income Countries: Evidence from Bangladesh
- The Real Exchange Rate Policy Trilemma in Surplus-Labor Developing Economies