Bangladesh Drugmakers See Little Gain from US 100% Tariff Exemption
In this article (9)
Bangladesh’s pharmaceutical industry will see limited immediate export gains from a US tariff adjustment exempting specialty medicines, according to industry leaders including Shawkat Haider of Beximco Pharmaceuticals Limited.
Under Section 232 of the Trade Expansion Act, the US announced a 100 percent ad valorem tariff on certain licensed pharmaceutical products and ingredients from September 29, while granting zero-tariff entry on selected specialty drugs to eligible jurisdictions.
The zero-rate list covers rare-disease orphan drugs, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, and antibody-drug conjugates from approved partners including Bangladesh, India, Japan, and the European Union.
The Manufacturing Gap
Exemption on paper means little without production lines on the ground. Bangladesh built its drug export trade on generic small-molecule tablets, capsules and basic formulations rather than complex biologics.
Commercial production of gene therapies or antibody-drug conjugates requires sterile cleanrooms, specialized bioreactors and years of clinical validation. Shawkat Haider, executive director of Beximco Pharmaceuticals Limited, confirmed the structural limitation facing domestic producers.
“Bangladesh will not get any significant benefit from the tariff adjustment because we do not manufacture this type of highly sophisticated medicine,” Haider said.
Regional Competition and Compliance
Regional competitors hold a wide lead in the specialty segments covered by the US order. Contract manufacturers in South Korea and India already operate US Food and Drug Administration-cleared biologic plants. They supply licensed ingredients directly to North American distributors.
Local producers attempting to enter these niches face steep capital costs and strict US regulatory audits. Domestic veterinary medicine manufacturers also lack the international certifications needed to clear US border inspections, leaving that market segment out of reach for now.
Earlier Tariffs and Trade Timelines
The revised pharmaceutical duties follow an earlier round of US trade enforcement under Section 232. Washington activated the first phase of 100 percent tariffs on July 31 for an initial annex of listed companies before widening enforcement to broader pharmaceutical categories on September 29.
Industry lobby BAPI, the Bangladesh Association of Pharmaceutical Industries, is reviewing product lists to identify whether any existing formulation pipelines qualify under the zero-tariff rules. Abdul Muktadir, president of BAPI and chairman of Incepta Pharmaceuticals, said individual product assessments will determine if future export openings exist.
What to Watch
Dhaka drugmakers are reviewing capital expenditure plans for dedicated biotech and oncology plants to evaluate their long-term viability under US export specifications.
Government trade officials are tracking whether the US Trade Representative adds conventional oral generic categories to future Section 232 exemption schedules before the next tariff review cycle opens in 2027.
Questions & Answers
Q.What types of medicines are exempted from US tariffs under the new adjustment?
What types of medicines are exempted from US tariffs under the new adjustment?
The US zero-rate list covers rare-disease orphan drugs, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, and antibody-drug conjugates from approved partners. These are specialty medicines, not the generic small-molecule products Bangladesh typically produces.
Q.Why won't Bangladesh benefit significantly from the US tariff exemption?
Why won't Bangladesh benefit significantly from the US tariff exemption?
Bangladesh's pharmaceutical industry primarily produces generic small-molecule tablets and capsules, not the complex biologics and sophisticated medicines covered by the exemption. Producing these requires specialized equipment and clinical validation, which Bangladesh lacks.
Q.What challenges do Bangladeshi producers face if they want to enter the specialty medicine market?
What challenges do Bangladeshi producers face if they want to enter the specialty medicine market?
Domestic producers would face high capital costs for facilities like sterile cleanrooms and specialised bioreactors. They also need to clear strict US regulatory audits and acquire international certifications, which are currently lacking.
Q.When did the US first impose tariffs and then widen their enforcement on pharmaceutical products?
When did the US first impose tariffs and then widen their enforcement on pharmaceutical products?
The first phase of 100 percent tariffs began on July 31 for an initial list of companies. Enforcement was then widened to include broader pharmaceutical categories on September 29.
Reader pulse
Is this US exemption a missed opportunity for Bangladesh?
24,361 votes so far