Favourable governmental assistance, advanced facilities and stringent regulations in countries like Singapore and Malaysia are aiding the growth of pharmaceutical and biotechnology industry in South East Asia.
Simplified investment regulations including the 10-year tax holiday, duty exemptions, dependable infrastructure, tailor-made incentives for big-ticket investments, free-trade agreements with nil restrictions on equity in the Association of South East Asian Nations(ASEAN) region have made the region especially Malaysia as the destination of the future for bio-pharma manufacture. The stringent regulatory framework in Singapore has seen the country attract considerable contract research and clinical research activities.
The eight pharmaceutical markets of South East Asia are developing at markedly different speeds and are characterized by contrasting macroeconomic factors. These markets are projected to have a combined pharmaceutical market value of US$80 billion at retail prices in 2017, according to Epsicom Business Intelligence report.
The South East Asia comprises Cambodia, Laos, Malaysia, Myanmar, Thailand, Vietnam, Philippines, Indonesia and Singapore among others. Korea is part of North or East Asia.
The government of India too is serious on its 'Look East' policy realizing the potential of doing business with the ASEAN. There are enormous prospects for trade and co-operation between the 10-member ASEAN countries comprising Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Myanmar, Cambodia, Laos and Vietnam.
India became a sector-specific dialogue partner of ASEAN in 1992, which was advanced to full dialogue partnership in 1996. In 2011-12, the ASEAN-India trade touched $79.3 billion, which is above the targeted $70 billion for 2012 set in 2009. Now the government of India is looking to accelerate trade revenues to $100 billion by 2015 and this would give the Indian pharma and healthcare sector among other sectors access to the $800 million South East Asian market, according to Minister for Commerce, Industry & Textiles Anand Sharma.
In November, Prime Minister of India Manmohan Singh at the 10th ASEAN-India summit in Phnom Penh said that the aim was to further strengthen the country’s relations with those in the South East Asian region. Some of the efforts included India's Dialogue Partnership and Foreign Trade Agreement (FTA) with the ASEAN countries. The trilateral highway project linking India, Thailand and Myanmar will give a fillip to ASEAN association when the project is completed by 2016.
Indian biopharma, healthcare presence
Malaysia and Singapore are the most-sought after destinations to invest in research and manufacture going by the favourable government policies.
The Malaysian drug market is the largest, comprising 47.8 per cent of the total pharmaceutical market," according to a Frost & Sullivan Industry Analyst.
This has seen three companies from Karnataka: Strides Arcolab and Biocon in the pharma and biotech space invest in the region along with Stempeutics, part of the Manipal Group invest in a stem cell research and development facility here.
From a larger Indian perspective, Ranbaxy and Cipla too which have invested in Malaysia.
In 2011, Fortis Healthcare, India’s largest hospital major had acquired a majority stake in Singapore-based diagnostic firm RadLink-Asia Pte Ltd for SGD 62.9 million valued around Rs 245 crore. In the same year in July the healthcare major infused around SGD 70 million, to set up a Fortis colorectal cancer care hospital. It has also tied up with Institute of Bioengineering and Nanotechnology (IBN) and set up a tissue bank to improve the diagnosis and treatment of colorectal cancer.
In August 2011, Singapore-based Fortis Healthcare International Pte Ltd formerly known as Fortis International also entered into an agreement to acquire 65 per cent stake in Hoan My Corporation, Vietnam which operates a network of five hospitals across the country.
In November 2007, Stempeutics Research Pvt. Ltd, part of Manipal Education & Medical Group, invested around Rs. 30 crore to open an advanced lab in the Technology Park, Kuala Lumpur. The Stempeutics Research Malaysia Sdn Bhd., promotes stem cell research in the region. It focuses on research, therapeutics and therapy in regenerative medicine. The facility was commissioned in March 2008.
Strides Arcolab, a global pharmaceutical company, planned investments to set-up a next-generation biologics facility in Johor, Malaysia. Biologics represent the fastest growing market segment in pharma accounting for six out of top 10 selling global drugs, with patents on first generation biologics expiring by 2020. The biologics facility in Johor, Malaysia will be an advanced end-to-end multi-product facility for the production of recombinant therapeutic proteins and monoclonal antibodies (mAbs) from drug substance to drug product in vials, pre-filled syringes and lyophilized products. The project is expected to come on-stream by end-2014, with significant capacity already advance booked for partner operations, according to the company.
Biocon is setting up its first overseas bio-pharma manufacturing and research facility located within a 40 acre compound, at Bio-XCell, Johor, Malaysia, the new regional biotech hub of Asia that offers a state-of-the-art biotechnology ecosystem. The facility will be the largest integrated insulins production plant in Asia, with an investment of over US$160 million, the largest foreign investment in this sector in Malaysia. Biocon has been recognized as an Entry Point Project (EPP) by the Government of Malaysia and is expected to play a major role in the government's economic transformation programme, said Kiran Mazumdar-Shaw, chairman and managing director, Biocon Ltd.
In 2012, Ranbaxy Malaysia Sdn Bhd, a wholly owned subsidiary of Ranbaxy Laboratories Ltd received an approval from the Government of Malaysia to set up a greenfield manufacturing facility in Malaysia as an EPP (Entry Point Project). In fact the drug major Ranbaxy is seen to be among the first companies to enter into Malaysia to set up a production facility through its subsidiary Ranbaxy Malaysia Sdn Bhd. It is now is now working on a second unit which is the greenfield investment and the company has slated an investment of $40 million, according to a report.
Other pharma companies including Lupin, are considering Malaysia as the destination for the coming years.
Potential hub for outsourcing
Pharma consultant Estima Pharma Solutions is now looking to increase its reach to the up-and-coming South East Asian markets which is now seen as a promising contract manufacturing hub for generics and branded formulations.
In order to make the most of the opportunity, Estima has teamed up with Advent Med. and PharmaMatch Group in the European Union to identify prospective companies in South East Asia to offer comprehensive engineering solutions, help implement quality management systems, carry out feasibility studies, GAP analysis, initiate international regulatory audits, validate plants, equipments & utilities, prepare & submit dossiers.
The companies in South East Asia which have so long produced pharmaceuticals for local and neighbouring markets are now gearing up to build the required expertise to lure global majors for contract manufacture orders. The region is now setting a new direction in growth in pharma outsourcing and is now scouting for competent consultants to trigger many global audits, said Gurudatta GG, chief executive officer, Estima Pharma Solutions
South East Asia investments in India
Going the scope for patient care in India, international hospital chain Columbia Asia Hospital Pvt. Ltd. which entered India through Foreign Direct Investment(FDI) route has commissioned nine hospitals in the country beginning from 2008.These include locations at Karnataka - four facilities where two in Bengaluru are at Hebbal and Yeshwantpur besides being present in the districts of Mysore and Doddabalapur. There is one facility each at Kolkata, Palam Vihar at New Delhi, Ghaziabad in Uttar Pradesh; Patiala in Punjab and Pune in Maharashtra.