Bangladesh should quickly do some homework on how to tap its potential of earning billions from the global pharmaceuticals market as the country will lose its preferential trade benefits after graduating from a least developed country (LDC) in 2026, according to an economist.

Local drug makers, who cater to 98 per cent of the domestic demand worth Tk 20 billion annually, need to focus on expanding research and development to strengthen their production of new molecules, said Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD).

"Because after 2026, when the country will become a developing country, local pharmaceutical companies will have to follow patent guidelines when producing medicine," he added.

If medicines are produced following the patent rights, drug prices in local markets will be costlier.

To avert the situation, Bangladesh initially tried to extend its Trade Related Aspects of Intellectual Property Rights (TRIPS) waiver by six to nine years and then up till January 1, 2033.

However, in the 12th Ministerial Conference of the World Trade Organisation (WTO) held in Geneva last month, global leaders did not extend the TRIPS deadline for graduating LDCs.

Under the current trips agreement, drug makers in LDCs can produce any generic medicine without having to follow the patent guidelines until January 1, 2033, but the benefit is not applicable for graduating LDCs such as Bangladesh.

On the other hand, global leaders at the WTO did extend the TRIPS waiver for the production of emergency drugs, such as Covid-19 vaccines, for all countries.

Rahman then suggested addressing the shortage of skilled manpower and exploring opportunities of setting up joint ventures to attract more foreign direct investment (FDI) for the country's special economic zones.

He also suggested encouraging contract manufacturing, bringing changes in local laws to take advantage of the TRIPS agreement, and quickly opening active pharmaceutical ingredient (API) parks in the country.

The seasoned economist yesterday made these comments at a discussion on "Export of Pharmaceuticals Sector Upon LDC graduation: Strategies and Way forward" organised by the Dhaka Chamber of Commerce and Industry (DCCI) at its office in Dhaka.

Government high-ups, drug manufacturers, exporters, university professors, experts and businessmen participated in the discussion.

Salman Fazlur Rahman, private industry and investment adviser to the Prime Minister, said annual pharmaceutical exports from Bangladesh will cross $1 billion from the current $160 million within the next two to three years as the door to US markets are open for certain local drug makers because of their high level of compliance.

He also said if local drug manufacturers can utilise the US market opportunities, the value may cross $5 billion within the next five to six years.

ABM Faruque, a professor of the department of pharmaceuticals of the University of Dhaka, also suggested quickly opening API parks, a project for which was taken in 2008 but could not be implemented until now.

Ahmad Kaikaus, principal secretary to the Prime Minister, said LDC graduation will be an opportunity for the country even though there are some challenges to overcome.

Prosenjit Chakraborty, general manager of Square Pharmaceuticals, suggested launching negotiations with the US for exporting more medicine to the US defence services as an opportunity has been created in this regard.

He also suggested launching negotiations with leaders of the Association of South East Asian Nations as the trade bloc has taken some measures to only do business with medicine within member countries.

DCCI President Rizwan Rahman said Bangladesh will face a higher tariff regime ranging from 8 per cent to 15 per cent in the export market after graduation, which may decrease the country's export earnings by 14.28 per cent, or $5.73 billion.

The pharmaceutical sector may be affected by loss of the TRIPS waiver, resulting in the decline of generic and patented drugs production and export, he added.