With its fast-growing, young population and projected combined pharmaceutical market value of US$80 billion in 2017, the Association of South East Asian Nations (ASEAN) presents a great opportunity for the global pharma industry. A common market for financial services will be one of the major components of the ASEAN Economic Community when it takes effect at the end of 2015.
These markets are developing at markedly different speeds and are characterised by contrasting macro-economic factors.
While Taiwan and Singapore are both relatively small, with growth limited by the size of these island nations, Indonesia, Thailand and the Philippines are fairly large emergent pharmaceutical markets, with large populations and steadily growing economies.
Despite concerns over counterfeiting and low efficacy of generic products, IPR protection and manufacturing standards are improving thanks to effective national regulations, foreign investment and joint-ventures with multinational companies. Malaysia and Vietnam are small pharmaceutical markets, typified by rapid economic growth, increasing foreign investment and support from national government. These five markets have significant OTC sectors and rapidly expanding generic sectors, and present previously untapped populations for potential foreign pharmaceutical companies.
With impressive economic indicators being tempered by the limited population size,the Singaporean pharmaceutical market to exhibit a high level of growth. The volume of trade in pharmaceuticals flowing in and out of Singapore is disproportionately large compared with the size of the country, due to its status as a distribution centre. The country exports a large amount of pharmaceuticals, although the majority of this total is from re-exported goods.
While The 30 Baht Healthcare Scheme will increase the domestic use of generics the AEC membership will encourage pharma companies to use Thailand as a base for regional distribution
Thailand has had "a long and successful history of health development," according to the World Health Organization. Life expectancy is seventy years at birth, ninety-eight and ninety-six per cent of the population have access to improved drinking water and sanitation , and a system providing universal health care for Thai nationals has been established since 2002.
Thailand's pharmaceutical market is estimated to grow at a low double-digit CAGR in US dollar terms between 2012 and 2017. Thailand will have the eighth largest pharmaceutical market in the Asia Pacific region in 2017. In per capita terms, Thailand is projected to have the eighth highest rate in the Asia Pacific region by 2017.Thailand’s pharmaceutical market was valued at US$ 3.6 billion in 2011, with Thailand’s pharmacy market growing at a rate of 7.2 per cent .
Many multinationals are active in Taiwan, although the majority of them only have sales and marketing operations as they are deterred from establishing manufacturing operations due to the unequal drug pricing system. Taiwan is heavily dependent on the imports of retail medicaments, which represented 80.6 per cent of the total imports in 2011. With limited pharmaceutical exports of only US$300.6 million in 2011, the balance of pharmaceutical trade will remain considerably negative and the deficit is likely to increase in the forecast period.
Rising drug consumption and government investment make Vietnam an attractive pharmaceutical market. There are around 171 pharmaceutical companies in Vietnam, out of which nine per cent are owned by foreign investors and four per cent are joint ventures.
About 28 per cent of them have the Global Manufacturing Practice (GMP) certification. Local pharmaceutical production was valued at nearly US$920 million and met 48 per cent of the nation's needs. Imported drugs account for the remaining 52 per cent. According to Deputy Minister of Health, Cao Minh Quang, improving the domestic pharmaceutical industry would be the health sector's utmost priority in the coming years in order to satisfy 70 per cent of the nation's demand by 2015.
In 2010, about 22 per cent of the population was affected by gastrointestinal (GI) related problems in Vietnam. Such a high percentage of population suffering from this condition could be due to the fact that people in Vietnam are increasingly leading a busy and stressful lifestyle. With the hectic lifestyle, they have less time for balanced meals and exercise. People use more takeaway food deliveries, and many young urban consumers eat at their desks at work. All of these habits led to more digestion related problems and gradually aggravates to more GI related issues.
Various drugs are available in Vietnam for GI related problems. Of the drugs in the market, about 45 per cent are generic, 30 per cent are over-the-counter (OTC) and the remaining 25 per cent are patented. They are mostly classified into anti-diarrheal, anti-ulcer drugs such as H pylori agents, H2 antagonists, prostaglandins and proton pump inhibitors. Other categories include GI anticholinergics, antispasmodics, GI motility drugs and laxatives.
Vietnam's medicine consumption market represents a good opportunity for medium to high return market for drug makers. Demand for medicines is supported by a thriving economy, political stability, growing private consumption and health insurance. Despite a low per capita spending, some research suggests that market growth could have a CAGR of 14.6 per cent against the government’s estimate of 17-19 per cent.
With 22 per cent of the population affected by GI related cases in the country, and considering the fact that each person affected by GI may have to receive a dosage of oral drugs at various stages; this would boost the demand for drugs used for treating GI conditions.
In the the last one decade Malaysian pharma industry has shown a progressive growth, according to Malaysian Investment Development Authority (MIDA). The industry has invested substantially to upgrade itself in the last few years to meet the latest GMP requirements, in accordance with the domestic as well as international guidance.
Currently the industry has the capacity to produce medicines in all dosage forms e.g. tablets (coated & non-coated), capsules (hard and soft gelatine), liquids, creams, ointments, sterile eye drops, small volume injectable (ampoules and vials), large volume infusions, dry powders for reconstitution and active pharmaceutical ingredients (API), it adds.
Local manufacturers have also developed and launched off-patent generics and herbal products using their own brands. Currently, the local industry is producing about 30 per cent of the domestic demand, as well as exporting to the Asia-Pacific Rim countries, the Middle East, Africa, Latin America and Europe. Leading Malaysian companies are also moving into the production of biologics drugs, oncology and high value-added generic compounds in-line with the growing demands in this region.
The principal regulatory authority on the production, import and sale of pharmaceuticals in Malaysia is the Drug Control Authority (DCA) of the Ministry of Health. To date, a total of 246 pharmaceutical premises with Good Manufacturing Practices certification have registered with the DCA.
Malaysia is one of the few countries in the region that have been accepted into the Pharmaceutical Inspection Cooperation/Scheme (PIC/S). With the admission of Malaysia as a member of the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Cooperation/ Scheme (PIC/S) in January 2002, the country's exports of pharmaceutical products received a boost, especially among the member countries, which include the EU, Australia and Canada.
Equally attractive is the increasing global demand in halal pharmaceuticals which offer companies the opportunities to capitalise on local expertise in halal production and the global acceptance of Malaysia's halal certification as well as increasing recognition of its halal products.
Under the Healthcare National Key Economic Area (NKEA) sector, one of the key recommendations is to promote manufacturing of pharmaceuticals. New investments in the state-of-the-art technologies and compliance with international standards have enabled Malaysian companies to be strategic outsourcing partners for MNCs.
Increasingly health-conscious Malaysians have contributed to the growth of OTC food/health supplements as well as herbal and traditional medicines. This is also in line with the agriculture NKEA to capitalise on Malaysia’s competitive advantage by leveraging on Malaysia’s biodiversity, including developing diverse natural herbs into premium herbal products.
The pharmaceutical industry in Singapore is a rapidly growing industry with a considerable amount of government support. It is the strongest component of the biomedical sciences sector in this country, the others being the medical device, and biotechnology industries and the healthcare services. These four industries are clustered together as they have synergies and address common issues of human healthcare. With the rapid establishment of new discoveries and robust growth, the biomedical sciences sector is targeted to be the fourth pillar of manufacturing in Singapore.
At a time when pharmaceutical and biotechnology businesses around the world are grappling with declining R&D productivity, Singapore’s integrated research ecosystem enables companies to access multidisciplinary capabilities in a single location, which improves R&D decision-making and accelerates drug discovery and development. More than 30 of the world’s leading biomedical sciences companies (including GlaxoSmithKline, Novartis and Takeda) are leveraging Singapore as a key home base to drive innovation, growing the nation’s biopharmaceutical industry by more than 30 per cent in 2011.