Medical equipment industry fears setback in recent progress

In 2022, after over two decades of effort, the medical equipment sector in Bangladesh was finally recognized as an emerging industry by the government. This recognition raised hopes for industry leaders that they might receive supportive tax structures and other benefits to encourage local production and protect domestic manufacturers.

However, they were disheartened when the 2024 budget omitted necessary HS Codes, stalling potential development incentives.

The situation worsened following the political upheaval in July and August, which saw the fall of the Awami League government. The interim government’s silence on industry issues, despite forming health reform committees, left medical equipment manufacturers feeling overlooked.

Moushumi Islam, managing director of Promixco Health Care, expressed concerns that this long-overdue recognition might revert to neglect. She emphasized that healthcare development in Bangladesh has historically focused on services rather than medical equipment, resulting in a lack of coordinated support for local manufacturers.

Bangladesh Investment Development Authority (BIDA) estimates the local medical device market at over $400 million, growing annually by about 10%. Statista projects the market will reach $387.7 million in 2024, expanding to $650.7 million by 2029.

However, the industry remains highly import-dependent, with over 85% of medical supplies coming from countries like the USA, India, and China. Local demand continues to grow, yet domestic production struggles due to a lack of supportive policies.

Md. Jasim Uddin, secretary of the Bangladesh Medical Instrument and Hospital Equipment Dealers and Manufacturers Association, highlighted an annual demand exceeding Tk12,000 crore (approximately $1.05 billion), with growth of around 20% in recent years. Statista’s data shows cardiology devices, including stents and pacemakers, as a significant segment, expected to grow from $46.41 million in 2024 to $80.69 million by 2029. Bangladesh remains fully reliant on imports for cardiac devices, with the local market showing robust but unmet demand.

Moushumi Islam said only about 30,000 types of medical devices are either imported or produced locally, a fraction of the two million varieties available globally.

She urged that expanding domestic production to include more advanced devices could strengthen healthcare outcomes, especially as non-communicable diseases, spurred by dietary habits and lifestyle changes, are expected to increase the need for equipment related to cardiology, neurology, and urology. Yet, customs challenges and high sample import taxes further burden local manufacturers, undermining their competitiveness against imported goods. Moushumi cited an example where high taxes on packaging materials for protective gloves made local products more expensive than imports.

Despite these challenges, some local manufacturers like JMI Syringes and Medical Devices Ltd and JMI Hospital Requisite Manufacturing Ltd supply nearly 90% of the country’s syringe and blood bag needs. Promixco, too, is capable of providing various types of hospital beds. Yet, price competition remains a major obstacle, with imports often cheaper due to unauthorized inflows and import misdeclarations.

Abhijit Paul, executive director of JMI Syringes, said that while the sector holds vast potential, the high investment costs and delayed returns deter investors.

Moushumi called for a coordinated policy approach to support local manufacturers through tax reliefs and preferential purchasing policies for domestically produced equipment.

She emphasized that if the industry received the same support as the garments and pharmaceuticals sectors, it could contribute significantly to foreign exchange earnings and job creation.

Md. Abdur Razzaq, general secretary of the industry association and JMI Group MD, reiterated that meeting domestic demand through local production could lower treatment costs and save foreign currency, but the government needs to take proactive steps.

In September, the interim government formed a health expert committee under National Professor Dr. A K Azad Khan, later creating a Health Reform Commission with him as chairman in October.

Although specific commission members have not yet been announced, committee member Prof. Dr. Md. Sayedur Rahman encouraged stakeholders to submit their concerns and suggestions to expedite the reform process.

While Bangladesh’s medical equipment sector has seen positive developments in recent years, it requires consistent support and protective policies to compete with imports and achieve sustainable growth. Industry leaders argue that without government commitment, the sector may struggle to realize its potential as a cornerstone of healthcare in Bangladesh.