Failure to match Bangladesh market led to GSK closure: Management

Failure to launch “appropriate” drugs for Bangladesh market led to losses and the eventual decision to close down the operations of the British drugmaker GlaxoSmithKline in an emerging market, the top management says.

Senior Correspondentbdnews24.com
Published : 27 July 2018, 01:17 PM
Updated : 27 July 2018, 04:47 PM

“It was in our mind how to fill up the portfolio gap, but we could not do that,” GSK Bangladesh Chairman M Azizul Huq said to a question from bdnews24.com at a news conference on Friday.

The company on Thursday after a board meeting announced that they will close down the commercially unsustainable Bangladesh pharmaceutical operations but its main consumer healthcare products will stay in the market.

It, however, promised to compensate nearly 1,000 of its workers properly, and added the pneumonia vaccines, which the government buys via the UN’s wing for children UNICEF, will continue to be available in Bangladesh.

But the argument of “unsustainable” market comes as a surprise as Bangladesh is known to be a perfect market for drug sellers with its 160 million population, increasing purchasing power, a shift of diseases from acute to chronic, and rising ageing population.

Global data suggest Bangladesh's pharmaceutical sector can grow at 15 percent for the next five years with its growing domestic market that can meet 98 percent of the local demand and export to 127 countries.

“We are a global company. Our business model is that we’ll do a research and get a unique product out of our research which will meet unmet need [of drugs] and we will distribute it across the world,” the chairman explained.

“But in Bangladesh our products are (very) old and cheap. We could not fill up the portfolio gap. And we don’t have any drugs in the pipeline to fill up that gap,” he said.

For example, he said, GSK’s new shingles vaccine - a priority product - won most of the US market share soon after its launch. “But this vaccine is not running in Bangladesh. It’s not appropriate for Bangladesh market.”

“We could not introduce products which are appropriate to Bangladesh market. “It’s mismatched. We could not fill up the gap," Azizul added.

Listed on Bangladesh’s capital market in 1976 as a pharmaceutical company, GSK announced 500 percent dividend for its shareholders in 2016 and 550 percent in 2017.

On being asked, he said the last year’s profit figure was cumulative.  “It was our total profit. It’s not the pharma profits. Our 70 percent businesses are consumer healthcare and the rest is pharma. But 100 percent profit comes from consumer. Pharma was in loss,” he said.

Managing Director of the company Nakibur Rahman said they first notified the stock exchange in May that the company will go under a review.

“After concluding Thursday’s board meeting, we immediately informed the stock market.”

Nakibur said they will complete the entire process of operations closure by December this year, but a mechanism will remain in place until the expiry date of their last product in the market so that patients can contact them for any adverse effects, which is a common pharmaceutical practice.

He said they will compensate their employees with “respect, dignity and fairness”. “We’ll continue to listen and explain to them our position.”

The MD added they will help them get a job. “Soon we’ll hold a job fair on our campus to facilitate them.

The future of their factories – whether to dispose of them or use those in other ways – will depend on the board and the shareholders.

“We are proposing to close them and it will depend on the board and the shareholders,” the chairman said.