US trade agreement: Ominous signals for Bangladesh’s pharmaceutical industry

Let us begin with Clause 2.6 of the US agreement concerning intellectual property: “Bangladesh shall provide a robust standard of protection for intellectual property. Bangladesh shall provide effective systems for civil, criminal, and border enforcement of intellectual property rights and shall ensure that such systems combat and deter the infringement or misappropriation of intellectual property...”

In other words, the US agreement is demanding a “robust implementation” of intellectual property (IP) laws and is calling for Bangladesh to strictly enforce patent laws.

We know that our pharmaceutical industry has a complex relationship with intellectual property laws. About 90 per cent of the “generic” medicines produced in the country rely on raw materials imported from abroad—most of which are not patented. Among such a vast volume of ingredients, how is it possible to determine which ones are covered by IP licenses, which are not, which have violated patents, and which have not? Who will determine this, and how? Whose responsibility is it? This is by no means the responsibility of port authorities or customs. Then who will do it? Seeking answers to these questions is quite startling.

To prevent violations of foreign companies’ IP rights in the import of raw materials or products, training programmes have long been initiated for port customs officials so that they can “detect and seize” such goods.

The most alarming aspect is that, through this agreement, the Americans are seeking access to all digital data of our customs system and demanding “digital enforcement rights” under intellectual property law. In other words, they would have control over all data from our ports and customs and would be able to track labels of imported raw materials used by manufacturers.

The situation would effectively mean that the technology is controlled by the Japanese, decisions are made by the Americans, interests are served by multinational companies, while Bangladesh Customs would act as an agent of foreign powers, cracking down on domestic producers.

Intellectual property (IP) law is fundamentally a political issue. There has been a century-long “Cold War” between the Global South and the Global North over this matter. Whether, where, and to what extent intellectual property rights over goods or medicines should be enforced is directly tied to the economic self-reliance of poor countries and the survival of their local industries. Therefore, it cannot simply be treated as a customs or administrative issue.

Determining patents for raw materials is inherently complex. Thousands of cases remain pending for years. In that sense, it is also a judicial issue. In Africa, after countless deaths due to lack of medicines for AIDS and tuberculosis, a continent-wide movement emerged against the strict enforcement of patent laws in pharmaceuticals.

It is essential to view such a sensitive and highly controversial issue through a political-economic lens and to examine the history of patent-related legal battles across different countries.

Yet, by signing this agreement, the government of Bangladesh has reduced the broader political-economic discourse on intellectual property to a non-justiciable matter, effectively turning it into a policing issue. It is as if tracking is done from Japan, directives are issued from the secretariat to “catch everyone,” and customs officials carry out arrests. In reality, every patent issue requires deep scrutiny.

Moreover, Bangladesh’s Patent Office lacks both technical and legal capacity. Determining who qualifies for patent rights over new inventions requires economic, social, and judicial judgment, along with legal training, skilled manpower, and an understanding of public interest—much of which is currently absent. There is also a shortage of competent lawyers capable of handling related litigation. The issue is not merely technical; it is fundamentally about “public interest versus private profit,” a distinction that is not well understood here in this context.

In such an unprepared state, are we presenting training from the Americans or Japanese on how to seize IP violations by our own pharmaceutical companies as “technology transfer”? While patent and trademark disputes worldwide require lengthy court battles, are we, through this agreement, effectively surrendering judicial sovereignty to the United States?

One of the advantages of being a Least Developed Country (LDC) is that Bangladeshi companies are not required to obtain patents or licenses for producing generic medicines. It is important to note that the raw materials and ingredients of generic medicines are identical to those of branded drugs.

Typically, generic versions are produced after the patent on branded medicines expires. Because Bangladesh is an LDC, local companies are not required to pay patent fees to international brands. Hundreds of pharmaceutical companies in the country have developed by producing generic medicines under these intellectual property exemptions.

A major strength of Bangladesh’s pharmaceutical industry is that it operates on a “high-volume, low-margin” production model. Additionally, keeping medicine prices affordable for decades has been a significant achievement of the National Drug Policy (1982).

We buy generic medicines for as little as Tk 50 from local shops, while the same drugs may cost many times more in the United States or Europe. The industry now meets nearly 97 per cent of domestic demand and also exports to 100 countries. This development has been possible largely due to the relaxation of patent laws under LDC status.

If Bangladesh is graduated out of LDC status, or if it is forced through bilateral agreements to pay intellectual property fees, then hundreds of local companies will not be able to sustain low-cost production after paying such large sums. This is precisely what the United States seeks, and the agreement makes this clear.

At present, most of the country’s 182 pharmaceutical companies are small. If strict intellectual property laws are enforced under US conditions, these smaller firms will not be able to survive after paying patent fees. In that scenario, the pharmaceutical security of 200 million people could fall into the hands of a few large companies and, in particular, multinational pharmaceutical corporations.

There are many essential and widely used medicines in the country. Let us assume that to produce one such medicine, a raw material called Salt-1 must be imported. Because of LDC benefits, local companies can currently import it without paying any patent fees. However, if the agreement is implemented, and if this salt or any similar ingredient used in producing omeprazole is patented, then pharmaceutical companies in Bangladesh will be required to pay patent fees.

In this way, if production of every new medicine, new raw material, or even a modified version of an existing raw material must pass through various patent barriers, it will become extremely difficult for the country’s pharmaceutical industry to survive. That is why even major pharmaceutical companies are saying that there is no scope for reviewing this agreement. Every clause related to intellectual property in the agreement is disastrous for the entire pharmaceutical sector.

Many countries in the world now handle IP laws with great care and address patent-related complexities. In local pharmaceutical production, they prioritise public interest, public health, and the principle of “access to medicines.”

Countries such as Brazil, Egypt, and Indonesia have trained their patent offices over many years based on national interest. These patent offices have developed the capacity to maintain a balance between public interest and corporate interests.

The Indian company Natco wanted to produce a spinal medicine called risdiplam. However, the patent for this medicine was held by the Swiss company Roche. Roche filed a lawsuit, arguing that the Indian company must pay royalties to produce the drug. After prolonged legal proceedings, the Indian High Court ruled in favour of Natco, granting it the right to produce the medicine locally.

After Natco produced the generic version, the cost per bottle fell to 15,000 rupees, whereas Roche had been selling the same medicine for 600,000 rupees. In other words, local production reduced the cost by 97 per cent. If the court had ruled in favour of the foreign company, Indian citizens would not have been able to access this expensive and rare medicine so affordably. This ruling is considered a landmark in the history of intellectual property law, delivering a clear message: public interest comes first, corporate interest comes second.

Nearly 10 per cent of Bangladesh’s population suffers from diabetes—around 20 million people.

Recently, in the Asian Development Review, four researchers showed that if Bangladeshi pharmaceutical companies are required to pay patent fees, the price of domestically produced insulin could rise by up to 11 per cent.

In addition, the prices of chemotherapy drugs, oncology medicines, and hepatitis C treatments would increase. Bangladesh’s market monitoring system is extremely weak. Due to administrative and judicial unpreparedness in an unregulated market, the prices of generic medicines could rise by as much as 1,000 per cent. Not only would prices increase, but many medicines could also become scarce or unavailable even at higher prices.

Already, out-of-pocket healthcare spending in Bangladesh is among the highest in South Asia. If a 20-taka generic medicine costs Tk 500, a public health crisis is inevitable.

It should be noted that the US agreement is stripping away Bangladesh’s LDC-related benefits. The advantages Bangladesh had under WTO rules as an LDC have been sacrificed, along with policy sovereignty, under the constraints of a bilateral agreement with the United States. In return, Bangladesh has taken on 15 additional conditions.

The United States will impose conditions, sanctions, and tariffs—that is its long-standing practice.

But who willingly sacrificed the interests of nearly all key domestic industries? Who secretly and openly campaigned in favour of this agreement?

Who worked so extensively over a long period to implement an agreement that sacrifices the achievements of Bangladesh’s garment industry, poultry and dairy sectors, pharmaceutical industry, and agriculture?

The Ministry of Commerce, the Economic Relations Division (ERD), a powerful adviser in the interim government (now a minister in the current government), and influential consultants working with ERD were highly eager to finalise this agreement. It is also worth noting that many of them had earlier advocated for Bangladesh’s graduation from the LDC list during the Hasina government.

The calculation of the Hasina government was different. Amid severe economic inequality, the state became fixated on the hollow prestige of becoming a middle-income country, while ignoring essential issues such as livelihoods, employment, and public health. GDP figures were manipulated, human development indicators were misrepresented, and the country pursued LDC graduation based on superficial metrics like per capita income.

However, any sensible citizen would agree that with such widespread poverty and severe unemployment, graduating to a middle-income country would cause local producers to lose one trade benefit after another. We clearly state that in a country with millions of poor people, those who, through opaque processes, voluntarily accepted a bilateral agreement that sacrifices all LDC benefits must be held accountable.

* Maha Mirza is a writer and researcher

* The opinion expressed is of the author’s own

* The article, originally published in Prothom Alo online edition, has been rewritten in English by Rabiul Islam