The pharmaceutical industry in Bangladesh has grown at 15% annually since being introduced in the 1980s. It is dominated by a few large players that control over half the market, including Beximco and Square, which hold 8.5% and 10.4% respectively. Barriers to entry for new companies are high due to capital requirements, established brands, and economies of scale of existing competitors. The industry has potential for growth but starting a new pharmaceutical business in Bangladesh poses high risks.

1. PHARMACEUTICALS INDUSTRY ANALYSIS
OF BANGLADESH
Md. Rabiul Islam

2. Introduction
• Pharmaceutical Industry is one
the fastest growing industry .
• Introduced in 1980s in
Bangladesh.
• This bar shows industry growth
is 15% with the increase in
revenue which makes the
industry really attractive.
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Pharmaceuticals Industry Analysis Of Bangladesh

3. Introduction
• The industry is in growth rate with the increase in
sales, this makes other interested in coming to this
industry.
• New firm cannot enter in market but still there are
245 companies competing as rivals.
• 95% of local demand is covered by domestic
company, where as 67% of it is hold by top 10
companies.
Such as: Beximco, Square.
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4. Analysis (Industry Rivals)
Top domestic rivals such as Incepta Pharmaceuticals,
Beximco, Renata, and Eskayef have market share of 10.4%,
8.5%, 5.74, and 4.5% respectively.
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5. Analysis (Industry Rivals)
• Equal in size and
capability
• Drugs not
differentiated
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6. Analysis (Potential New Entrants)
• Can any company Based on resources
and competitive capabilities.
• High barriers to entry .(245 Companies )
• High risk of return on Investment due to
existing competitors.
• Degree of threat depends on-
1. The reaction of existing firms to new entrants
2. The strength of barriers faced by new entrants.
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7. Analysis (Potential New Entrants)
Acting Forces of Entry Barriers :
• Brand preference and customer loyalty (Painkiller Napa (produced
by Beximco).
• Government Regulations (Majority of the existing pharmaceutical companies patented
formulations for a lot of medicines they manufacture and distribute.)
• Economies of scale and experience curve effects (It
might take years for a new entrant to enjoy economies of scale . Hence barriers to entry for them are high)
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8. Analysis (Potential New Entrants)
A new entrant may be faced with various hurdles erected
by established businesses, such as:
• Capital requirements and financial resources
• Distribution product differentiation - established products, brands
and relationships
• Economies of scale - manufacturing, R&D, marketing, sales,
• Access to distribution channels: preferred arrangements
• Regulatory policy- patents, regulatory standards
• Switching costs - employee retraining, new equipment, technical
assistance
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9. Analysis (Substitute Products)
• Generic drugs(patents expire
by 15-20 years)
• Herbal/Homeopathic
medicines(Long-term, cheap,
less side effect)
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10. Analysis (Substitute Products)
• Homemade Remedies
• Nutraceuticals-Fortified food
• Proficient use of health
information(innovative wearable medical
devices)
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Pharmaceuticals Industry Analysis Of Bangladesh

11. Analysis (Bargaining Power Of Supplier)
• 7 pharmaceutical raw materials suppliers in Bangladesh;
they are Pharma Raw Bangladesh, Dowla Brothers &
Company, Medinam, Nasana International, Sonewall
Limited, G. S. Enterprise.
• Suppliers generally have little room for negotiation, thus
they have low bargaining power.
• Large companies generally enjoy significant buying power
as the industry concentrates in a handful of large players.
• Companies in the pharma industry can switch from their
suppliers without incurring a very high cost.
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12. Analysis (Bargaining Power Of Supplier)
• The raw materials for manufacturing drugs are
commodity products in the chemical industry.
• Suppliers usually offer multiple products to the
manufacturer, which moderates pricing on rarer
materials and unique equipment.
• Recognizing labor as a supplier is important
because labor can exert great power by raising
prices.
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13. Analysis (Bargaining Power Of Buyer)
• Innovative high demand
medicines tend to set low
bargaining power of buyers
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14. Analysis (Bargaining Power Of Buyer)
• Consumers buy medicines at the
fixed price set.
• Doctors prescription does it all.
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15. Conclusion
The overall industry seems much attractive in terms
of growth rate, bargaining powers and revenue but
considering the startup cost, rules and regulations, it
needs a second thought. Although there are
substitutes but most of them are to be marketed by
the pharmaceutical industry itself.
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