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Bangladesh University of Business and Technology(BUBT)

Assignment On

“Pharmaceutical Industries in Bangladesh”

Submitted to:

Ms. Farha Sultana

Lecturer

Department of Management, (BUBT)

Submitted By:

Report made by the Vision Group Members

s.l Group Members Name ID

1 Farhana Khan Lopa 16171101027

2 Md. Yasin Ali 16171101001

3 Md. Shamsul Arefin 16171101020

4 Mehnaz Rashid 16171101007

5 Md.Ruhul Sinbad 16171101012

Date of Submission: 07/01/2017

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Letter of Transmittal

7th January ,2017

Ms. Farha Sultana

Lecturer, Department of Management.

Bangladesh University of Business and Technology (BUBT)

Mirpur-2, Dhaka-1216

Subject: Letter of Transmittal.

Madam

We are pleased to submit the report entitled “Pharmaceutical Industries of Bangladesh”.

This report has been prepared in accordance with your requirements.

We tried our level best for preparing this report. The information of this report is mainly

based on Internet information. All of us gave our hundred percent for making this report

come together.

We, fervently hope that you will find this plan worth reading. Please feel free for any query or

clarification that you would like us to explain. Hope you will appreciate our hard work and excuse

the minor errors. Thanking you for your co-operation .

Sincerely yours,

Farhana Khan Lopa ID#16171101027

Md. Yasin Ali ID#16171101001

Md. Shamsul Arefin ID#16171101020

Mehnaz Rashid ID# 16171101007

Md.Ruhul Sinbad ID#16171101012

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ACKNOWLEDGEMENT

All acclamation to Allah who has empowered and enabled us to accomplish the task successfully.

First of all ,we would like to thanks our Allah Almighty who really helps us in every problems

during the project. We would like to express our sincere and humble gratitude to Almighty who’s

Blessing , helps and guidance has been a real source of achievements in our life.

We wish to express our appreciation to our course teacher Ms. Farha Sultana who helps us a lot

and introduce us to new dimensions of knowledge.

We also wish to admit that we completed this project due to parents who pray for our success.

Last but not the least our team efforts, support, co-operation and encouragement showed by

each member in the group with each other.

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Table of Contents

SL Particulars Page No

1. Introduction 6

2. Methology of the study 7

3. Objectives of the study 7

4. Limitations 7

5. History of Pharmaceutical Industry 8

6 History of Pharmaceutical Industry in Bangladesh 9

7 Prospects 9

8 Pharmaceutical Companies in Bangladesh 10-13

9 Market Share of Pharmaceutical Companies In Bangladesh 14-15

10 Customer Choice 16

11 Finding & Analysis(SWOT) 17

12 Suggestions/Recommendations 22

13 Conclusion 22

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Executive Summary

The present study is focused towards the analysis of different barriers and prospects of

pharmaceutical industries in Bangladesh. Pharmaceutical industry is one of the most promising

sectors in Bangladesh. After the promulgation of local industry friendly Drug (Control) Ordinance

in 1982 the scenario of pharmaceutical industries changed considerably. Now, after fulfilling the

local demand Bangladesh is exporting pharmaceutical products to over 100 countries of the

world. There are still lots of space for Bangladesh to flourish in this sector. So,initiatives from the

stakeholders are required to ensure the remarkable growth of pharmaceutical industries in

Bangladesh. In this study, the scopes of advancement and the factors that can hinder the growth

of pharmaceutical business are discussed thoroughly.

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INTRODUCTION

The pharmaceutical sector is one of the trusty sectors in Bangladesh. Before Liberation War,

there was hardly any pharmaceutical enterprise in Bangladesh (then East Pakistan). After several

years of liberation, the government could not increase (in relative terms) budgetary allocations

for the improvement of health sector. At that time, most of the people had little access to the

essential lifesaving medicines. This sector started to improve from 1980s. The pharmaceutical

industry has grown in the last two decades at a considerable rate. After the promulgation of

Drug Control Ordinance-1982, the development of pharmaceuticals industry has accelerated.

The skills and knowledge of the professionals and innovative ideas of the people involved in this

industry are the key factors for these developments. Due to recent development of this sector,

the country is exporting medicines to global market including European countries and on the top

of it, the industry has been supplying about 95 per cent of the domestic demand for medicines.

There are three drug manufacturing units under control of the Government of Bangladesh. Two

of them are in Dhaka and another one is in Bogra. The name of these units is Essential Drug

Company Ltd. (EDCL), which is operating as a public limited company under the Ministry of

Health and Family Welfare In 2000, there were 261 Unani, 161 Ayurvedic, 76 Homeopathic and

Bio-chemic licensed manufacturing units in Bangladesh. The total worth of their medicines was

Tk 1.2 billion in 2000.

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METHOLOGY OF THE STUDY

This article is mainly based on secondary data collected from several reliable sources. For secondary data collection, Pharmaceutical Industries annual reports, exiting files and documents, manuals and publications were collected and analyzed. An intensive study on the relevant field was conducted through browsing internet.

LIMITATIONS

It was not possible to study all the relevant literatures.

Limited time frame was the major constraint to carry out the research smoothly.

Insufficient previous research works in this field is one of the major limitations of the

study.

OBJECTIVES OF THE STUDY

The study is aimed to fulfill the following specific objectives-

To key out the major achievements of the Pharmaceutical Industry of Bangladesh.

To critically analyze the SWOT analysis of the Pharmaceutical Industry of Bangladesh.

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History of Pharmaceutical Industry

The chemical industries (of the late nineteenth century) in upper Rhine Valley of Switzerland.

The drag store was opened by Arabian Pharmacists in Baghdad in 754 and many more was

opened in Islamic country and Europe.

Arabian pharmacists opened the first documented drug store:

Most of today's major pharmaceutical companies were founded in the late 19th and early 20th

centuries

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History of Pharmaceutical Industry in Bangladesh

Pharmaceutical Industry has grown in Bangladesh in the last two decades at a considerable rate.

The sector consistently creates job opportunities for qualified people. Like all other sectors in

Bangladesh, the pharmaceutical industry was much neglected during Pakistan regime. Most

multinational companies had their production facilities in West Pakistan. For several years after

liberation, the government could not increase budgetary allocations for the health sector.

In 1981, there were 166 licensed pharmaceutical manufacturers in the country. But in spite of

having 166 local pharmaceutical production units, the country had to spend nearly Tk 300 million

on importing finished medicine products. In 2000, there were 261 Unani, 161 Ayurveda, 76

Homeopathic and biochemical licensed manufacturing units. They produced medicines worth Tk

1.2 billion in 2000. One of the major positive impacts of Drug (Control) Ordinance is the rapid

development of local manufacturing capability.

Prospects

The growth of pharmaceutical industries of Bangladesh is remarkable and there are a lot of

potentials. As people are getting educated, they are now more conscious about healthcare. In

this regard, we can highlight about the increasing demand of “wellness” drugs, vaccines, medical

devices, etc. So,the demands of medical products are rising. On the other hand, many local

companies are exporting their products to different countries. At this time, Bangladesh is

exporting medicines to more than 100 countries. Two topmost companies have already received

the approval of FDA (Food and Drug Administration, USA), which is milestone for Bangladesh as

this approval will open the US market for Bangladeshi pharmaceutical products. Moreover,

another 5-7 pharmaceutical industries are upgrading their plants for the FDA inspection and

approval.

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Pharmaceutical Companies in Bangladesh

01. ACI Ltd.

02. Acme Laboratories Limited.

03. Alco Pharma Ltd.

04. Ambee Pharmaceuticals Ltd.

05. AmIco Laboratories Ltd.

06. Amulet Pharmaceuticals Ltd.

07. Apex Pharmaceuticals Ltd.

08. Apollo Pharmaceutical Laboratories Ltd.

09. Aristo Pharma Ltd.

10. Astra Biopharmaceuticals Limited

11. Beacon Pharmaceuticals Ltd.

12. Beximco Pharmaceuticals Ltd.

13. Bio- Pharma Laboratories

14. Bristol Pharmaceuticals Ltd.

15. Central Pharmaceuticals Ltd.

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16. Chemist Lab. Limited

17. Concord Pharmaceuticals Ltd.

18. Cosmic Pharma Ltd.

19. Delta Pharmaceuticals Ltd.

20. Desh Pharmaceuticals Ltd.

21. Doctor’s Chemical Works Ltd.

22. Doctor TIMS Pharmaceuticals Ltd.

23. Drug International Ltd.

24. Elixir Pharmaceuticals Ltd.

25. Eskayef Bangladesh Ltd.

26. Essential Drugs Company Ltd.

27. General Pharmaceuticals Ltd.

28. Genvio Pharma Limited

29. Globe Pharmaceuticals Limited.

30. Gonoshasthaya Pharmaceuticals Ltd.

31. Hadson Laboratories Ltd.

32. Hamdard Lab. (Waqf) Ltd.

33. Ibn-Sina Pharmaceuticals Ltd.

34. Incepta Pharmaceuticals.

35. Innova Pharmaceuticals Limited.

36. Jayson Pharma Ltd.

37. Jams Pharmaceuticals Ltd.

38. JCI (BD) Ltd.

39. Jess Chemical & pharmaceutical Works Ltd.

40. KDH Laboratories Limited.

41. Kohenur Chemicals Ltd.

42. Libra Pharmaceuticals Ltd.

43. Mala Chemical Ltd.

44. Medicon Lab.Ltd

45. Medimet Pharmaceuticals Ltd.

46. Millat Pharmaceuticals Limited

47. Modern Pharmaceuticals Limited

48. Mystic Pharmaceuticals Ltd.

49. National Laboratories Ltd.

50. Navana Pharma Ltd.

51. Nipa Pharmaceuticals Ltd

52. Novartis Pharmaceuticals Ltd.

53. Oasis Laboratories Limited

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54. Opso Saline Ltd.

55. Opso Pharma Ltd.

56. Organon ( BD ) Ltd.

57. Orion Laboratories Ltd.

58. People’s Pharma Ltd.

59. Pharmadesh Laboratories Ltd.

60. Pioneer Pharmaceuticals Ltd.

61. Radiant Pharmaceuticals Ltd.

62. Reman Drugs Ltd.

63. Renata Ltd.

64. Ribak Pharma Ltd.

65. Rephco Pharmaceuticals Ltd.

66. Roche Pharmaceuticals Ltd.

67. Salton Pharmaceuticals Ltd.

68. Seema Pharmaceuticals Ltd

69. SkylabLimited

70. SK+F Bangladesh Limited.

71. Sonear Laboratories Ltd.

72. Square Pharmaceuticals Ltd.

73. Standard Laboratories Limited

74. Sun Yad Pharmaceuticals Ltd.

75. Therapeutics Bangladesh Ltd.

76. Unimed Unihealth MFG. Ltd.

77. Union Pharmaceuticals Ltd.

78. Ziska Pharma Ltd

79. Universal Pharma Limited

80. Asiatic Laboratories Ltd.

81. Beacon Pharmaceuticals Limited

82. Delta Pharma Limited

83. GlaxoSmithKline Bangladesh Limited

84. Healthcare Pharmacuticals Ltd.

85. JMI Pharma Ltd.

86. Popular Pharmaceuticals Ltd

87. Prime Pharmaceuticals Ltd

88. Sanofi-aventis Bangladesh Limited

89. Sharif Pharmaceuticals Ltd

90. Silva Pharmaceuticals Ltd

91. Techno Drugs

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92. The White Horse Pharma

93. Ultra Pharma Ltd

94. Zenith Pharmaceuticals Ltd

95. Indo Bangla Pharmaceutical Works

96. Hallmark Pharmaceuticals Ltd

97. Decent Pharma Laboratories Ltd.

98. Biogene Pharma Ltd.

99. Ad-din pharmaceuticals Ltd.

100. Al-Amin Laboratories Ltd.

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Market Share of Pharmaceutical Companies In Bangladesh

Serial Name of Pharmaceutical Companies

Tk (Crore) Share

Growth %

Rank Total Market 7,186 100.00 24.30

1 SQUARE 1,378 19.18 23.54

2 INCEPTA PHARMA 650 9.05 32.17

3 BEXIMCO 620 8.62 40.33

4 OPSONIN PHARMA 355 4.94 26.09

5 ESKAYEF 348 4.84 24.82

6 RENATA 340 4.73 29.63

7 ACME 319 4.44 17.34

8 A.C.I. 293 4.08 18.81

9 ARISTOPHARMA 286 3.99 21.63

10 DRUG INTERNATIONAL 270 3.75 18.18

11 SANOFI AVENTIS 185 2.57 8.77

12 GLAXOSMITHKLINE 140 1.95 10.84

13 ORION PHARMA LTD. 140 1.94 31.47

14 NOVO NORDISK 128 1.79 27.72

15 HEALTHCARE PHARMA 126 1.75 33.20

16 GENERAL 117 1.63 19.25

17 SANDOZ 109 1.51 12.25

18 POPULAR PHARMA 94 1.31 54.53

19 NOVARTIS 94 1.30 46.01

20 IBN SINA 93 1.29 19.49

21 NUVISTA PHARMA 83 1.16 37.93

22 UNIMED &UNIHEALTH 68 0.94 22.80

23 SUN PHARMA 60 0.84 54.63

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24 GLOBE 57 0.80 24.72

25 BIO PHARMA 56 0.78 21.07

26 ROCHE 50 0.70 42.24

27 RADIANT PHARMA 41 0.57 71.73

28 PACIFIC 41 0.57 18.46

29 JAYSON 38 0.52 10.97

30 BEACON PHARMA 37 0.52 18.11

31 SMC 33 0.46 -1.25

32 ORION INFUSION 32 0.45 12.26

33 OPSO SALINE 30 0.42 1.85

34 KEMIKO PHARMA LTD. 29 0.41 4.68

35 NAVANA 29 0.40 -1.94

36 DELTA PHARMA 27 0.38 53.11

37 SERVIER 27 0.37 23.61

38 SOMATEC 23 0.33 4.37

39 RANGS PHARMA 22 0.31 -3.85

40 LIBRA 21 0.30 -4.70

41 ALCO PHARMA 21 0.29 5.44

42 APEX PHARMA 20 0.28 38.84

43 PHARMADESH 19 0.26 80.09

44 SILVA PHARMA 14 0.19 -1.21

45 MEDIMPEX 12 0.17 -50.53

46 EDRUC 11 0.15 -19.17

47 ZISKA 10 0.15 -0.71

48 WHITE HORSE PHARMA 10 0.14 81.65

49 RAK PHARMA LTD. 8 0.12 441.79

50 ASIATIC 8 0.12 65.29

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Customer Choice

Customer is a person who buys the products as well as consumes the products and consumer

only consumes the products. Pharmaceutical industries are dealing with life- saving drugs; here

customer choice does not change so rapidly. People may prefer one brand to another. But the

medicine may carry the same compound/ same ingredients. Customer choice depends on the

customers’ reliance upon the company. For example, Beximco’s Napa, and Glaxo’s Parapirol

carry the same compound and used for the same purpose. But, the customer purchases one of

them. Customers usually prefer some foreign medicine in case of sensitive problem. However,

our local pharmacies do not produce all the sensitive drugs, especially injections. This research

also conducted a small survey over the customer of medicinal product and their choices. The

sample was taken from different hospitals and pharmacy that came to buy the products.

CUSTOMER’S CHOICE OF BRAND NAME

Brand Name Respondent (in %)

Square 38

Beximco 24

Incepta 16

Glaxo SmithKline 8

Acme 6

Others 12

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Finding & Analysis(SWOT)

Strengths

1. The growth of middle class in the country has resulted in fast changing lifestyles in urban and to some extent rural centers. This opens a huge market for lifestyle drugs, which has a very low contribution in the Bangladesh market. 2. Bangladesh pharmaceutical manufacturers are one of the lowest cost producers of drugs in the world. With a scalable labor force, Bangladesh manufacturers can produce drugs at 40% to 50% of the cost to the rest of the world. In some cases, this cost is as low as 90%. 3. Most of the companies have own premises, so most companies can save their expenses; most pharmaceutical companies have a large size of factory. 4. Excellent transport-link the ease of access to / from the company. 5. Some companies have a good reputation in the market. Some companies have strong brand reputation in the market, these industries have well known brand in the market. 6. Bangladeshi pharmaceutical industry posses excellent chemistry, skilled workforce and process reengineering skills. This adds to the competitive advantage of the Bangladeshi companies. The strength in chemistry skill helps Bangladeshi companies to develop processes, which are cost effective.

7. The pharmaceuticals industry has MIS system. These companies have knowledge about diseases, which are available in our country. Most of the companies are more sophisticated. They are more concern or aware about each other. 8. The pharmaceutical companies follow the relationship selling method. The company representatives try to motivate the doctors to prescribe their medicine for the patients. The medical representatives of the pharmaceutical companies maintain the relationship with the doctors. 9. The pharmaceutical industry has the loyalty of the customers and vendors. Drug is essential for life. So these companies have certain markets to sell the medicines in Bangladesh. 10. These industries have some competitive advantages over the other industries. The pharmaceutical industries have strong manufacturing capacities.

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Weaknesses

1. The Bangladesh pharmaceutical industries are marred by the price regulation. Over a period of time, this regulation has reduced the pricing ability of companies. The DGDA (Directorate General of Drug Administration), which is the authority to decide the various pricing parameters, sets prices of different drugs, which leads to lower profitability for the companies. The companies, which are lowest cost producers, are at advantage while those who cannot produce have either to stop production or bear losses. 2. Bangladesh pharmaceutical sector has been marred by lack of product patent, which prevents global pharmaceutical companies to introduce new drugs in the country and discourages innovation and drug discovery. But this has provided an upper hand to the Bangladesh pharmaceutical industry. 3. Bangladesh pharmaceutical market is one of the least penetrated in the world. However, growth has been slow to come by. As a result, most of the pharmaceutical companies are relying on exports for growth. 4. Most of the pharmaceutical companies are in low financial positions, Due to the low financial position; it is not possible for some companies to install the latest technology in their premises. 5. Some of the pharmaceutical companies are in unskilled workforce. As a result these companies cannot minimize the cost of the production. 6. Due to very low barriers to entry, Indian pharmaceutical industry is highly fragmented with about 250 large manufacturing units and about 18,000 small units spread across the country. This makes Bangladesh pharmaceutical market increasingly competitive. The industry witnesses price competition, which reduces the growth of the industry in value term. To put things in perspective, in the year 2004 the industry actually grew by 8.6%. 7. Most of the companies do not up to date their machineries, they perform their activities with the traditional machineries, and so it is difficult to maintain the quality of the medicines. 8. Some of the companies in this industry have the rented premises, as a result it add costs to the production. So the selling prices are increasing day by day. 9. Innovative effectiveness is low in our country due to the lack of the sophisticated equipment, lack of the capital, lack of the skilled manpower, and the lack of the professional in our country.

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10. Sometimes per unit cost of the medicines are higher than the imported medicines. The selling prices of the medicines become higher. So the domestics company has to fight with the multi-national companies.

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Opportunities

The SAARC region, Bangladesh stands out as a nation with a vast potential to become a leading pharmaceutical producer. Currently the country is producing mostly the drug formulations and nearly 250 units are engaged in this activity. The production by these units is adequate to meet almost 95 percent of the national requirements. With many large pharmaceutical units, the international manufacturing standards are largely absent amongst most of the small units. Regulatory procedures are yet to fully evolve. However companies like Beximco Pharmaceuticals, Square Pharmaceuticals, etc are now trying to adopt international manufacturing standards in their facilities. New drug policy will help to expand pharmaceuticals industry Lifesaving international-standard drugs are now being produced in Bangladesh and the country is about to achieve self-sufficiency in production of pharmaceuticals. Unveiling the plaque of an essential medicine-producing project here, The Essential Drugs Company Limited (EDCL) is already supplying drugs to different international organizations and also exporting abroad. After implementation of the new policy, the industry would further expand and generate new job opportunities in the country. As a least developed country, Bangladesh would get opportunity to produce patent medicines till 2016. BAPI Eyes to expand Pharmaceutical Markets Bangladesh is now exporting pharmaceuticals to about 30 countries and also eyeing expansion of more markets next year. Bangladesh had started exporting pharmaceuticals to some neighboring countries like Myanmar, Sri Lanka and Nepal in the 1980s and since then the export market expanding gradually. Bangladesh Association of Pharmaceutical Industry (BAPI) said that the country would get the opportunity for exporting pharmaceuticals and other related items to India and China and other countries next year. Bangladesh is, among the 49 least developed countries (LDCs), which has the strongest base of manufacturing pharmaceuticals and so the country would get share of exporting the items after the global market will open up for all in the year 2005. Besides, the regular brands, Bangladesh are also exporting high-tech specialized products like inhalers, suppositories, Nasal Sprays, injectables and infusions.

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Threats

1. There are certain concerns over the patent regime regarding its current structure. It might be possible that the new government may change certain provisions of the patent act formulated by the preceding government. 2. The competition is increasing day by day in the pharmaceuticals sector. So the pharmaceutical companies have to face competition in the market. 3. Rising the cost of the wages; the basic wages, so it effect on total cost of the production and it will increase the selling prices of the medicines. 4. Increasing the interest rate, the interest rate of the bank is increasing day by day. So the investors do not agree to borrow from the bank. 5. Threats from other low cost countries like China and Israel exist, so, differentiation in the contract manufacturing side may wane. 6. The short-term threat for the pharmaceutical industry is the uncertainty regarding the implementation of VAT. Though this is likely to have a negative impact in the short term, the implications over the long-term are positive for the industry. 7. Some companies appear to be focused on the maximization of short-run sales as opposed to long-run profits. This shift in focus is never good for the industry. Prices crash and marketing expenditure to finance gimmicks shoots up resulting in lower profits per unit of sale. Many companies panic at this stage and join the bandwagon of bad selling and marketing practices. 8. Bad selling practices in the pharmaceuticals industry by some companies are likely to dampen the market growth. In addition depreciation of the taka will raise the cost of imported raw materials. 9. The pharmaceuticals sector attained a lower growth rate of 8.6 % only during the year 2004 as against 5.90% during the previous year. The lower growth rate of national pharmaceutical market may be attributed to various factors such as lower public expenditures on health care, natural calamities, including the floods, cyclones, epidemical diseases and lower agro-crop harvest. 10. Existing product become unpopular or unfashionable, the quality or the ingredients of the medicines are changing day by day. So, the company has to face the losses.

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SUGGESTIONS/RECOMENDATIONS

The pharmaceuticals industry has to make commitment to the quality of the medicine, because medicines are directly related to life. The companies have to concern about this fact.

So, the pharmaceuticals industry should clearly identify the strengths, weaknesses, opportunities and threats. They have to point out of the strengths and take steps to utilize these strengths properly. The pharmaceutical industries have to challenge with the threats of the external environments. So, they have to differentiate their product from other industry.

CONCLUSION

There still remains a lot of work in the field of SWOT analysis of the pharmaceuticals industry in Bangladesh. Several questions remain unanswered with regards to this emerging construct, some of which have been addressed within this paper, and some of which still remain to be explored. This research within the SWOT analysis has helped to shed some light in establishing what the characteristics of the SWOT analysis are. The SWOT analysis also provides the information about the pharmaceuticals industry in Bangladesh. There is some strength in the pharmaceuticals industry in Bangladesh. Government should take step to utilize this strength properly. Further researches will be pursued in this area by us in the hope of gaining a better understanding of SWOT analysis and its constituents, with the ultimate goal of providing a practical and functional measurement tool.

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REFERENCE

[1] http://bddrugs.com/detail.php?nid=13.

[2] http://www.hplbd.com/cakehplbd/pages/partnering

[3] http://www.newstoday.com.bd/index.php?option=details&news_id=56395&date=2012-

03-17

[4] http://beximcopharma.com/latest-news/5335-beximco-pharma-enters-eu-market

[5]http://www.bdmedicines.com/p/pharmaceutical-companies-in-bd.html