Term Paper on Industrial Relationship

Historical Background
Incepta Pharmaceuticals Ltd. is a leading pharmaceutical company in Bangladesh established in the year 1999. The company has a very big manufacturing facility located at Savar, 35 kilometer away from the center of the capital city Dhaka. Incepta began its operation with a handful of highly skilled and dedicated professionals guided by an able leadership. Proper strategic planning, technical excellence, swift and timely decisions helped us achieve our objectives leading to much faster growth. Incepta was able to anticipate the need of the market and provide the right product at the right time. High focus on R&D investment from the very beginning made possible the introduction of quality products ahead of its competitors in most cases. Incepta Pharmaceuticals Ltd. is now the 2nd largest company of the country and recognized as the fastest growing of the top five manufacturing company in the country. Incepta now has one of the largest and competent sales force and large distribution network of its own, operated from 18 different locations throughout the country. A marketing team composed of pharmacists and doctors are at the core of the marketing operation. These professionals play a crucial role in providing the necessary strategic guideline for the promotion of its product. The company has very innovative plan to become a most renowned pharmaceutical company in the world by improving research based dosage form manufacturing within a very short period.

Product Profiles
Incepta Pharmaceuticals was produced its first product, ranitidine, in December of 1999. The company produces various types of dosage forms which include tablets, capsules, oral liquids, ampoules, dry powder vials, powder for suspension, nasal sprays, eye drops, creams, ointments, lotions, gels, prefilled syringes, liquid filled hard gelatin capsules, lyophilized injections, human vaccine etc. Since its inception, Incepta has been launching new and innovative products in order to fulfill unmet demand of the medical community. The company specializes in value added high technology dosage forms like sustained release tablets, quick mouth dissolving tablets, effervescent tablets, barrier coated delayed release tablets, prefilled syringe products, Insulin and Insulin analogue and biological products, among others . It has established a modern research and development laboratory for the development of new, advanced dosage forms for various drugs and devices like poorly soluble drugs, dry powder inhalers, coated pellets, modified release products, taste masked preparation etc. A vast number of different types drugs are produced by Incepta every year, i.e., anesthetics (Nordrine), analgesics, anti anginal, antihistamine, anti pyretic, anti diabetic, antifungal, antiemetic, anti migraine, anti protozoal, diuretic, gynecological, hepatitis B medications, various nutrient supplements, ophthalmic, vitamins and minerals, antihypertensive, antiulcerant, and so on. Besides, many drugs are under research to develop soon.
The company sells its products in Bangladesh and plans to begin exporting to both developed and developing countries around the world.

Competitive Status
The country has a large generic market, and large companies are beginning to have success overseas. Beginning in 2000, Incepta has been launching new and innovative products at a faster pace than its competitors. Incepta now has one of the largest and competent sales force and large distribution network of its own, operated from 18 different locations throughout the country. However, despite the country possessing huge manufacturing capabilities, the complete lack of R&D in domestic companies could cause the market to stagnate.
Incepta has a very competent sales team, which promotes the specialties throughout the country. The company virtually covers every single corner of the rural as well as urban area of Bangladesh. On 15th January 2011, Incepta implemented globally acclaimed ERP software system - SAP. Incepta is the first Bangladeshi company to implement SAP to manage resources throughout the company operation. This world class resource management system will allow the company to become more efficient and effective in its day to day operation.
Incepta Pharmaceuticals has retained the second largest position with its local sales amount Tk 9.52 billion in 2012 in the country’s Tk.55.billions pharmaceutical market followed by Beximco pharma and Square Pharma though the firm is growing at a relatively high rate than the other top companies. Again though the overall scenario is showing Square and Beximco as closest competitors but value wise there is a huge gap. Again Incepta Pharma is the 2nd largest company in pharmaceutical market, so growth rate is relatively high for the company than others. Incepta Pharmaceuticals competitive status:

• Rivalry among existing firms • Threats of new entrants • Threats of substitute products • Bargaining power of buyers • Bargaining power of suppliers

Trend of Performance (Production/Sales turnover/profit& profitability)
During the last 12 years of operation Incepta launched as many as 124 new generics for the first time ever in Bangladesh. High focus on quality and timely introduction of much needed essential medications previously unavailable in the country has enabled Incepta to become the second largest pharmaceutical company of the country. Incepta Pharmaceutical trend of performance of last 6 years are given below:

|Year |2007 |2008 |2009 |2010 |2011 |2012 |
|Sales Turnover (Tk in |36,98,025 |40,10,167 |47,67,988 |64,56,892 |78,90,242 |92,51,603 |
|thousand) | | | | | | |
|Production (units) |5,78,214 |6,23,546 |6,04,328 |6,87,902 |7,04,610 |7,52,639 |
|Net profit |4,53,968 |5,34,781 |6,24,740 |7,51,879 |9,72,973 |12,25,265 |
|(Tk in thousand) | | | | | | |
|Profitability growth rate| 14.45 | 17.80 | 16.82 | 20.35 | 29.40 | 25.82 |
|(%) | | | | | | |

From the table we see that Incepta pharmas sales are increasing day by day which also indicate net profit of this companies also rising. Profitability growth showing that companies performance also growing.

Growth rate (Trend analysis of Productivity)
Beginning in 2000, Incepta has been launching new and innovative products at a faster pace than its competitors. Up to September 2012, it has already launched 351 generics with a total of 660 presentations. The company produces a wide variety of dosage forms covering nearly all the major therapeutic classes.
During the last 12 years of operation Incepta launched as many as 124 new generics for the first time ever in Bangladesh. High focus on quality and timely introduction of much needed essential medications previously unavailable in the country has enabled Incepta to become the second largest pharmaceutical company of the country. The trend analysis of Incepta Pharma Ltd. is given below:

SWOT analysis of Incepta Pharmaceuticals Ltd.
Here I will be able to identify internal and external factors that affect strengths, weaknesses, opportunities and threats to activities or operations of Incepta Pharmaceutical company’s in Bangladesh. Factors affecting an organization can usually be classified as:
• Internal factors – Strengths (S), Weaknesses (W)
• External factors – Opportunities (O), Threats (T)

Strengths of Incepta Pharmaceutical Ltd.
• Incepta Pharmaceutical are producing world-class products.
• Wide range of products.
• Price is competitive both in local and foreign market.
• Strong brand image created by the market leaders parallel to MNCs.
• Large pool of efficient and qualified technical manpower at minimum cost.
• Supportive government policy attracting foreign investors.
• Backward linkage support is being created.
• Large domestic market with reasonable growth rate.
• Oldest and one of the largest sector in terms of capital investment.

Weaknesses of Incepta Pharmaceutical Ltd.
• Patent law is not updated to accommodate benefits of LDCs. In Bangladesh patents are more prohibited under Patents and Drugs Act 1911 as amended for time to time and patents and Drugs Rules 1933. In order to make best use of compulsory licensing and parallel imports, recent patent law needs to be updated.
• A Task Force was created comprising members from EPB, Drug Authority, Ministry of Health, Ministry of Commerce, NBR, Bangladesh Bank, Income Tax, Customs and so many but unfortunately this committee could not work up to level of the requirement.
• Dependency on imported raw materials or absence of API plants.
• Absence of international standard quality control and testing laboratory.
• Absence of bio-equivalence testing and clinical facilities.
• Inadequate knowledge on TRIPS and trade related matters.
• Little research and development on new molecule development etc.

Opportunities for Incepta Pharmaceutical Ltd.
• We can now produce API for patented products
• Large potential for export market expansion from 2006 till 2016 and on wards.
• Huge potential to set-up manufacturing plant for API or bulk drugs.
• Liberal government policy for the foreign investors for joint venture pharmaceuticals unit.
• Large pool of qualified technical personnel may set up manufacturing units in other LDCs
• Positive points of Drug policy, if foreign companies can show 7.5% saving of foreign exchange mark up is flexible.
• Domestic market is gradually increasing with the increase in GDP.
• Scope for product diversification into herbal and animal healthcare.
• Research and development activities may be initiated with external support.
• Scope to take advantage of compulsory licensing, parallel import and bolar provisions.
• Bangladesh can gain the markets, where India & Brazil used to sell until 2005, because the countries are now excluded from supplying medicines subject to patents, there by strengthening the competitive positions of Bangladeshi Producers of medicines.

Threats for Incepta Pharmaceutical Ltd.
• Cheaper medicine from China and India.
• TRIPS may bring tough competition in the local and export market.
• India has amended 1970 Patents Act as favorable as possible.
• The sector is dependent on imported raw materials, any fluctuation in raw material prices or rate of exchange will have negative affect on competitive prices.
• Entry of multinationals with large-scale investment and strong backward linkage support.
• Neighbouring countries supplying products to Bangladesh through unauthorized channel.
• Imported drugs will be in the local market after enactment of revised drug policy.
• Increase of price of raw materials.
• WTO members with strong generic industries that supply Bangladesh must give full patent protection.

Possible measure to improve performance
According to market condition and shifting trends, Incepta Pharmaceuticals need to take some measures to improve and sustain in the business in all the generics. As they are one of the leaders in the market, to retain that place it is very much important for the company to continuously improve performance. Some possible measure Incepta Pharma should have to follow:

• Strengthen norms, standards and policy options, promote quality of medical products, vaccines and technologies. • Efficient procurement systems to combat counterfeit and substandard medical products, vaccines and technologies. • Promote good governance and transparency in procurement and medicines pricing. • Strengthening capacity of drug administration authority. • Ensure equitable access, rational use and adherence to quality medicine. • Monitor quality and safety of products/vaccines/technologies. • Improved compliant management is one significant part of Incepta Pharmaceutical planning and they continuously try to improve the medicine quality. • Local pharmaceutical companies to produce raw materials.

Conclusion Remarks
Pharmaceutical is the second largest revenue generating industry in Bangladesh and the country looks well set to merge as a global hub for quality medicines. A new era has begun for Bangladesh pharmaceutical sector with the TRIPs agreement from 2005 and will continue up to 2016. These eleven years will be very crucial and important for the pharmaceutical industry. Provide people globally with high quality health care products at affordable prices in order to improve access to medicine and to provide employees an enabling environment that facilitates realization of their full potential. Investors and entrepreneurs may engage in and benefit from the potentials. Government support is also very important for the growth and expansion of the sector at this stage. Healthy growth is likely to encourage the pharmaceutical companies to introduce newer drugs and newer research products, while at the same time maintaining a healthy competitiveness in respect of the most essential drugs. Incepta Pharmaceuticals Ltd. plays a vital role in the development of the economy of Bangladesh. Every year a large amount of foreign currency is gained by this country. If Bangladesh gets such more companies like Incepta, the country will be economically very strong within a short period.
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