For more than a decade, the emerging markets of the Asia-Pacific region have held special promise for the global biopharmaceutical industry. Driven by a combination of rapidly expanding economies, technological innovation and a talented workforce, the region has seen explosive growth in both economic and political power during the past ten years.
In meeting these needs, the region has more than matched its promise as a low cost, higher value service provider. Yet, as the industry continues to grapple with its challenges, the potential sought by many Western companies as part of their Asian strategy is changing. In order to operate effectively in an increasingly competitive economic and commercial landscape, biopharmaceutical companies are searching for new partners and new strategies to help navigate risks and seize opportunities.
In this regard, Asia as a whole is poised to assume the mantle of leadership as the strategic ally of choice for global pharmaceutical companies. Today, Asia is gaining the experience and infrastructure needed to expand its ability to support the global biopharmaceutical industry by performing work and fostering innovation that moves higher up the biopharmaceutical value chain.
As a result, outsourcing to Asia is shifting from a tactical to a strategic imperative that builds upon the region’s experience and expertise. As pressure on biopharma’s development pipelines continues to grow, companies are setting their strategic sights on a world where Asia is not just a market and support powerhouse for the industry, but a key contributor to drug discovery and research innovation as well.
This shift is already beginning to bear fruit. Increasingly, Western biopharma companies are turning to research-based partnerships as a way of sourcing high-end expertise and building up drug discovery investment in Asia. For example, in 2009, Pfizer announced a joint initiative with the Shanghai Institutes for Biological Sciences (SIBS) to support fundamental research geared towards drug discovery and development programmes in China.
Governments across the region are stepping up, too. The Indian government, for example, offers incentives to domestic and multinational drug makers to encourage new drug discovery with a goal of transforming the country into one of the top five pharma innovation hubs by 2020. Countries such as South Korea, Singapore and Malaysia have all identified the biopharmaceutical industry as a strategic sector worthy of public infrastructure investment and support.
Singapore continues to attract attention with two flagship R&D centers operated by the Agency for Science and Technology Research (A*STAR), including Biopolis, opened in 2003 to develop biomedical sciences and fusionopolis, an interdisciplinary research center designed to bring technology experts from A*STAR and those from the private sector together. Singapore has committed to an additional S$13.55 billion (US$9.16 billion) from 2006 through 2010 to transform the city-state into a public and private research and development hotspot.
In Malaysia, innovation and development also holds special status. The development, testing and production of biopharmaceutical products are entitled to high technology pioneer status, which offers significant tax incentives. To bolster clinical trials, the Clinical Research Centre (CRC) functions as the clinical research arm of the Ministry of Health to operate a network of 17 centres around the country. The CRC serves as a single point of contact to access all Ministry of Health hospitals and clinics to carry out clinical trials in Malaysia.
South Korea’s biotechnology and pharmaceutical industry has been rapidly growing due to government support. The Korean government has set forth Bio-Vision 2016, a national plan to promote biotechnology aimed at strengthening the core infrastructure necessary to develop and commercialize original bio-technologies.
For all of this progress to continue, however, a range of factors must be addressed before Asia can realize its promise as an incubator for drug innovation and discovery. Most importantly, stakeholders throughout the region — from pharmaceutical executives to government regulators to academic leaders and beyond — need to embrace the transition and align the region’s growing market power with ever-increasing internal and external demands.
From a clinical development standpoint, rather than viewing clinical activity in Asia solely as a means to support drug programs seeking regulatory approval outside of the region, regulatory authorities and biopharma companies must continue their focus on providing value and data to support unmet needs within the region itself. Japan, for example, now accepts data from regional trials conducted in countries such as China, Taiwan and South Korea in an effort to cut approval time, a significant break from the past. Some multinational pharmaceutical companies are also taking a closer look at aligning clinical trial activity with Asia-specific opportunities, drawn by the promise of tackling underserved disease states within the local population.
Despite such encouraging signs, some final pieces of the puzzle must be addressed before the Asia-Pacific region can reach its full potential.
● Intellectual Property Protection (IPP) will continue to be a major factor impacting innovation in the region. In the past, the majority of outsourced clinical activity in Asia focused primarily on relatively inexpensive areas such as biology and chemistry, driven by pharma’s desire to keep higher-value, more patent-heavy activities under direct control. As western companies begin to feel more confident about outsourcing discovery research projects to Asia — a vital step in creating the critical mass necessary to foster innovation — they must believe patents are safe.
Fortunately, significant progress has been made by some to enforce IPP and implement patent laws. Singapore has established a strong track record for IPP, South Korea’s 2007 Free Trade Agreement with the United States includes an improved patent system, and China and India have also placed the need to address IPP issues near the top of their agendas.
● Harmonization of government regulatory schemes is also an urgent issue. Although some countries such as India may fare better than Eastern Europe or China in terms of a regulatory environment, the situation is hardly uniform across the region. Despite their growing economic prowess, many Asian countries outside of China and India lack the market size or human resources to develop full-fledged pharmaceutical companies on their own. A more uniform approach to regulation of clinical studies and results could help create a pan-Asian pharmaceutical market large enough to encourage a range of biopharma companies to find their niches without having to reinvent the wheel in each new geography.
● Beyond state responsibilities and legal protections, the region’s culture of innovation is further hampered by legacy issues surrounding a lack of educational infrastructure and effective collaboration between industry and academia. To innovate, scientists are best served when able to draw from different disciplines like mathematics, biology and chemistry.
Although significant challenges remain, a culture of innovation is poised to take root today across Asia as the infrastructure for world class R&D is developed, the level of technical and leadership talent grows and a renewed emphasis on regulatory harmonization takes place in countries big and small. As the centre of gravity for the industry shifts from developed to developing geographies, the balance of pharmaceutical investment and innovation will also shift towards a future where high-end drug discovery in Asia will play an increasingly significant role.
-Dr. Ferzaan Engineer is CEO, Quintiles India and Dr. Anand Tharmaratnam is Senior
Vice President & Head of Clinical Development, Quintiles Asia-Pacific.