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EM- 519 (Strategic Management)

Overview on the Pharmaceutical


industry of Bangladesh

Supervised by:
Dr. Muhammad Shariat Ullah
Department of Management
University of Dhaka

Submitted By
MD. SHAIFUL HAQUE KHAN
ID: 3-14-27-076
Date of Submission
June 11, 2016

Pharmaceutical Industry Overview

Inception: Around 1950

No of Companies: 231

Market Size: 76.5 Billion BDT

Market Growth: 24.30 %

Position: 2nd (after Garments) in Industry Sector

Demand Covers: 97% of Domestic Market

No. Of Medicine Brand: 5300

Market Share: Domestic 80% and MNC 20%

Exports: 72 Countries

The industry was incepted in 1950


After Liberation (1971) market was dominated by MNCs and
were dependent on imports
In 1982 National Drug policy and Drug Control Ordinance
introduced
In 1982 there were 133 local firms
Since then the domination of local firm started

Market Share of companies


Serial

Pharma

Tk (Crore)

Market Share

Growth %

Square

1378

19.18

23.54

Incepta

650

9.05

32.17

Beximco

620

8.62

40.33

Opsonin

355

4.94

26.09

Eskayef

348

4.84

24.82

Pestel Analysis
Political Factors
Political Instability (Hartal,
Strikes etc)

Export-Import policy

Tax and Tariff policy (27.5%)

Social Factors

Economic Factors
High GDP growth (6.2%)

Unemployment Rate (4.5%)

Exchange rates

Lower rate of inflation (7.48%)

Labor cost

Technological Factors

Alternate Methods used in


rural areas (spiritual, Herbal,
Homeopathy etc)

80% of Active Pharmaceutical


Ingredient (API) imported not
produced

Unreliable power supply force


leads firms to depend on selfgeneration of power

Technological innovation only


in medicine production not in
production of material/machine

Religion

Demographics features of
population

Environmental Factors
Climate change affects on
operation
The National Drug Policy
2005 states that the
pharmaceutical plants must
comply with disposal of waste
streams

Legal Factors
World Bank (2009) reports
Bangladesh is ranked 119 out
of 183 economies on ease of
doing business
Monitoring and supervisory
role of DDA (Director of Drug
Administration)
WHOs current Good
Manufacturing Practices
(GMP) should be strictly
followed

Porters 5 force analysis

Bargain Power Of Customer: Low


Consumer has no choice but to buy what Doctor says
Buyers are scattered not united (retail)
NPPA (National Pharmaceutical Pricing Authority) tries to
control the price but not much effective
Bargain Power of Supplier: Low
Pharma industry depends upon organic chemicals
Chemical industry is very competitive and fragmented so
supplier switching is easier
Rivalry Among Existing Firms: High
The number of firms in the industry is high
Lots of similar sized firms
Product Differentiation
Cost competitiveness
Threat of Substitute Products: Very Low
Almost zero substitute for medicine
Biotechnology is a threat for industry but for Bangladesh this
threat will be quite mild for several decades
Threat of New Entrants: Very High

Capital requirement is low


Creating a regional distribution network is easy

A Small survey on 12 professional shows the following result

References:
http://dspace.bracu.ac.bd/bitstream/handle/10361/3263/10164036.pdf?
sequence=1
http://www.pharmabiz.com/ArticleDetails.aspx?aid=77989&sid=21
http://cispharma.blogspot.com/2015/04/bangladesh-pharmaceuticalindustry.html