Throughout the last decade, all arms of the global health sector enjoyed significant business growth.
The size of the global pharmaceutical market simply doubled during this period with an annual value of $1.27 trillion.
If the current scenario continues, this sector will gain more than five percent growth in the next five years.
Health budget reduction in many developed countries, patent expiry of some high valued products, changes in contemporary drug regulations, lifestyle modifications, introduction of hi-tech products, increased vaccination coverage, recent advances in the health sector of some developing countries, and awareness towards side effects of chemical drugs added new dimensions in the global pharmaceutical industry which brought many changes internally; they also pushed the overall market to grow positively.
In view of the global market analysis, it is clear that the USA controls more than 30% of the global pharmaceutical industry followed by EU countries who contribute more than 15%.
Japan is in a very strong position as it dominates almost 12% of the total market.
In terms of production quantity, China and India are unparalleled; however, due to the different prices, their shares are around eight percent and less than five percent respectively.
Recently a new era has evolved in the healthcare business due to changes in disease patterns.
The number of persons aged 60 or above is expected to increase by 100% by 2050 and increase by 200% by 2100, rising from 962 million globally in 2017 to 2.1 billion in 2050 to 3.1 billion in 2100. That means age related problems like hypertension, diabetes, asthma, cancer, stroke, neurological diseases, kidney diseases, osteoporosis, eye diseases etc will be the key drivers of the pharmaceutical industry growth.
Considering the above, the global pharmaceutical giants are putting their research attention more on biologics than on conventional chemical molecules.
It is worth mentioning that biologics are produced from animal origin by using biotechnology and they offer precise actions with very minimum or no side effects.
Due to huge investment and research, lots of successes are coming from biologics day by day.
Now biologics are no more limited to insulin and vaccine, rather they have been spread across all therapeutic classes.
Side effects of chemical drugs and easy accessibility of biologics are also promoting the growth of biologics.
According to pharmaceutical experts, the biologic product market may exceed the conventional chemical molecule market within the next couple of years.
In 2019, the United States Food and Drug Administration (USFDA) approved 19 biologics which is a landmark.
The next year, in 2020, 11 out of the top 20 high valued products were biologics which is a sign of future growth.
In the last five years, more than 80 biologics have been approved globally, 600 biologics are under development and 370 biologics are in different phases of clinical trials.
Also, it needs to be noted that after 2010, the growth of biologics was almost 100% which is very rare in pharmaceutical history.
The average development cost of an original biologic is $800 million to $1.2 billion, which only big companies having strong Research & Development (R&D) support can invest in.
In view of this fact, the medium sized companies moved with a different strategy and developed the copy of original biologics after the patents expired.
These true copies are known as biosimilars and their development cost is almost 10 times lower than the original ones.
These biosimilars are usually offered at more than 30% reduced price which increases the accessibility towards biologics.
Also, a recent study revealed that the use of biosimilars will reduce treatment costs by $44.2 billion within 2024.
The European Union first approved biosimilars in 2006 and currently their approved number of biosimilars is 68.
USFDA was a little conservative in approving biosimilars; however, in 2015 they approved the drug Filgrastim-sndz by Sandoz as the first biosimilar and as of December 2020, they have approved 29 biosimilars.
For the production and marketing of biosimilars, the Asia-pacific, Africa and Latin America are preferred places due to less stringent regulatory issues.
Therefore, renowned multinational companies are putting their attention here and working with multidimensional approaches including collaboration with local companies.
In view of the above, the Indian and Chinese governments are offering many packages to attract foreign investors as well as local entrepreneurs.
Currently their main objective is to be sound in the R&D sector. During the last few years, India approved 50 biologics among which 50% were biosimilars.
In Bangladesh, the market size of biologics (both copy and original) is approximately $185 million in where the major share comprises insulin and anti-cancer products.
Few local companies like Square, Incepta, ACI, Aristopharma, Beacon etc have the capacity of manufacturing copy biologics; however, in almost all cases, the basic materials are imported from different sources.
Moreover, the companies are far away from extensive research activities.
There are many biologics globally whose patents will expire shortly. So Bangladesh can give a research drive targeting a few of them.
This will not only bring cost effective biologics to the local markets but will also increase the export volume by a greater scale.
A research cell can also be formed by engaging the R&D departments of renowned companies, Pharmacy Faculty of Dhaka University, Bangladesh Council of Scientific and Industrial Research (BCSIR), Bangabandhu Sheikh Mujib Medical University (BSMMU), International Centre for Diarrhoeal Disease Research, Bangladesh (ICDDR, B) and the National Institute of Biotechnology.
Even eminent Bangladeshi scientists who are working abroad may also be connected here. Public Private Partnership (PPP) may be the business model of the said project.
The patent right of the newly developed biologic will go to the government and the commercial production will take place at the API Park, Gazaria, Munshiganj or any other suitable manufacturing sites assigned by them.
Instead of importing, the local companies will purchase the basic materials from the government and the investor companies will get a discount on purchase.
The author is a pharmacist and a former short-term consultant at the World Bank.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.