The recent adjustment by the United States to exempt certain pharmaceutical products from tariffs is expected to offer limited immediate benefits to Bangladesh’s pharmaceutical industry, industry officials have stated. While the tariff relief may eventually create export opportunities, the country currently lacks the manufacturing capacity for many of the highly specialized medicines covered under the new measure.

The US government introduced a 100 percent ad valorem tariff on specific licensed pharmaceutical products and ingredients beginning July 31, under Section 232 of the Trade Expansion Act. This tariff initially targeted companies listed in a prior annex and was extended on September 29 to apply to additional covered entities. However, as part of this adjustment, the US exempted products originating from a select group of eligible jurisdictions—including Bangladesh, Argentina, India, Japan, South Korea, the European Union, and others—from these tariffs.

The list of pharmaceutical products covered by the tariff exemption is extensive and includes orphan drugs—which are medications designed to treat rare diseases—nuclear medicines, plasma-derived therapies, fertility drugs, cell and gene therapy products, antibody-drug conjugates, medical countermeasures against chemical, biological, radiological, and nuclear threats, as well as pharmaceutical products for animal health, subject to regulatory conditions.

Despite these provisions, industry leaders in Bangladesh caution that the exemption is unlikely to translate into immediate export gains because local companies do not yet produce many of the specialized drugs targeted by the US measure. Shawkat Haider, executive director of Beximco Pharmaceuticals, noted that Bangladesh’s pharmaceutical industry has not developed the sophisticated manufacturing technologies and regulatory compliance needed to produce such complex medicines at scale. Efforts to enter the highly competitive US market would require significant investment in research and development, upgrading manufacturing infrastructure, and meeting stringent US regulatory standards.

Haider also highlighted the challenge posed by competition from established pharmaceutical exporters such as India, South Korea, and Japan, which currently dominate these advanced product segments. While Bangladesh has a limited number of manufacturers in the animal health pharmaceutical sector, the industry is still too nascent to fully meet US market requirements.

Abdul Muktadir, chairman and managing director of Incepta Pharmaceuticals Ltd and president of the Bangladesh Association of Pharmaceutical Industries (BAPI), echoed these sentiments but suggested the tariff adjustment could represent a potential opening for the future. He emphasized the need for detailed, product-specific analyses to determine where Bangladesh could effectively benefit, pointing out that the country does not currently export these specialized medicines to the US.

Md Abu Zafor Sadek, deputy general manager of UniMed UniHealth Pharmaceuticals, described the US tariff exemption on selected pharmaceutical categories from 20 countries as a positive development for strengthening the global pharmaceutical supply chain. He pointed out that although Bangladesh presently has limited capacity in the most specialized segments, continued efforts to advance capabilities in biotechnology and high-value pharmaceutical manufacturing may unlock new export possibilities over time.

In summary, while the US tariff exemption marks a potentially favorable shift for Bangladesh’s pharmaceutical sector, substantial hurdles remain before the country can capitalize on the opportunity, largely due to its current production limitations and the rigorous demands of the US market.