Health and hygiene to get budgetary care

Nov 27, 2023

The government plans to offer duty rebate on the import of more raw materials of medicine and medical equipment productions in the upcoming national budget, a move experts say will strengthen the local industry and benefit the health sector.

Besides, the VAT waiver may continue in the next year for raw material import for manufacturing sanitary napkins, diapers and toiletries, necessary items for public health and hygiene.

According to finance ministry officials, the government is going to include another 10-12 raw materials of cancer and diabetes drugs to the existing duty-free list to make the treatments more affordable.

Import of silicone tube for manufacturing intravenous cannula also may get duty rebate.

The next budget is also likely to see a 150% supplementary duty on liquid nicotine and transdermal nicotine patch, and impose 212.20% duty on e-cigarettes, vapes and parts of such devices, to discourage their use.

Industry leaders and health economists welcomed these budgetary initiatives, saying these will have positive impacts on public healthcare.

Dhaka University Institute of Health Economics Professor Syed Abdul Hamid said it would be a good move to allow duty waiver on raw materials of anti-cancer and anti-diabetes drugs.

Imports of all medical raw materials should be duty-free, and strict monitoring has to be there to regulate their pricing, he told The Business Standard.

Talking about the high expense of cancer treatment that requires expensive medicine, he said the core cost ranges between Tk3 lakh to Tk20 lakh annually, depending on the patient's ability.

According to the Bangladesh Cancer Society, there are approximately 13 to 15 lakh cancer patients in the country.

Some 1.56 lakh new cancer patients are diagnosed in Bangladesh each year while 1.08 lakh people die from cancer, according to the Globocan 2020 data.

On the other hand, the number of diabetes patients was 13.1 million in 2021, says Bangladesh Diabetes Society.

A study of BMC Health Services Research found in 2019 that the average annual treatment cost was Tk93,819.95 for each type-2 diabetic patient. Medicine cost accounted for 60.7% of the direct cost followed by the hospitalisation cost of 27.7%.

Industry insiders say in the wake of rising inflation, if raw materials for the key medicines of cancer and diabetes can be imported with zero duty, the prices of the drugs can be drastically reduced.

Bangladesh imports over 100 types of raw materials for cancer and diabetes medicine and around 76 types of them are used in cancer medicine production.

They mentioned that the government allows import duty waiver for only 30% cancer medicine raw materials.

Monjurul Alam, director of Global Business Development at Beacon Pharmaceuticals, said, "We are producing over 100 types of cancer medicines."

If the government provides a duty-free benefit for all the raw materials, it would help the industry offer medicines at more affordable prices, he said, adding that the industry currently sells cancer drugs at prices approximately 50% to 60% lower than imported ones.

Monjurul Alam also called upon the government to allow duty-free import of kidney and cardiac medicines raw materials.

Echoing his view, SM Safiuzzaman, secretary general of Bangladesh Association of Pharmaceutical Industries (BAPI) said, a number of companies are producing oncological drugs in Bangladesh, which helps offer such medicine at lowest prices.

A type of medicine that was previously imported at a cost of $1,000 is now sold by local pharmaceuticals at Tk500, he explained, demanding VAT-tax waivers for cancer and diabetes medicine production.

In the past 12 years, pharmaceutical companies such as Beacon, Eskayef, Renata, Incepta, Healthcare, and Techno Pharma have started to manufacture over100 types of oncological drugs.

VAT may go on sanitary pad, diaper raw materials

In another move, the government may continue the VAT exemption for the raw materials for sanitary pads and diapers until 30 June 2024 aiming to boost local production and help the industry grow further.

According to the National Hygiene Survey 2018 conducted by the Bangladesh Bureau of Statistics, some 29% of menstruating women in the country use sanitary pads, up from 14% in 2014.

The industry insiders say the size of the domestic sanitary napkin market, which currently stands at around Tk700 crore, has been growing at an annual rate of about 20%.

The demand is almost completely fulfilled by local companies.

Besides, the market size of diapers is around Tk800 crore, 90% of which is supplied by local companies.

Quamrul Hassan, business director at ACI Limited, told TBS that import of raw materials for sanitary napkins enjoys a VAT waiver. "It would be logical to continue this Because of this facility, the local industry has been protected."

Regarding this, an NBR official said some facilities cannot be withdrawn overnight because investments have come due to them.

Also, the government will allow import of LABSA and SLES – raw materials of soap and shampoo – at a reduced VAT rate of 5% for another year.

Stakeholders said the market size of the toiletries and skincare industry is around US$3billion and it is getting even bigger with a compound annual growth rate of 12.5%.

Delwar Hossain, managing director at United Sulpho-Chemicals Limited, told TBS, "The continuation of reduced VAT will ensure protection of local industry and supply of these raw materials at competitive prices."

Zaved Akhtar, chief executive officer and managing director of Unilever Bangladesh, told TBS, "If this facility was cancelled, the prices of these products would shoot up. The continuation will not affect the market.

Health and hygiene / National Budget