South East Asia (SEA) is an important market for manufacture and marketing of pharmaceuticals. Owing to the immense growth opportunities for manufacturing and partnership expansion, India cannot ignore this region. It is a pharma manufacturing power house with sound regulations, which is also increasingly attracting western investors.
The region comprises 11 countries of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor Leste and Vietnam. Specifically Indonesia and Vietnam is the pivot of pharma manufacturing. While Singapore is recognised for its research and development prowess, the government of Malaysia has made a significant contribution to build the biotechnology and stem cell industry ecosystem. There are industry-academia panels of select Malaysian universities to enhance collaboration and curriculum development. The region which has strictly adhered to local regulations is now eyeing compliance to PIC/S (Pharmaceutical Inspection Co-operation Scheme) norms.
Growth prospects
With a growth rate estimated at an approximate seven per cent in coming three years from 2018 to 2021, SEA pharma companies continue to enjoy higher growth rate as compared to other parts of the world. Governments of SEA are really worried how to contain/subsidize healthcare costs just like in Indonesia, BPJS (Universal Health Coverage) is in place to cover wide span of citizens. The government is under pressure to supply affordable quality medicines. Branded generics/generics is a game changer for multinational companies to retain their brands in Indonesia and in other South East Asian countries, M Dani Pratomo, president elect, FAPA told Pharmabiz in an email.
The key driving factors are tax incentives, lower labour costs, government support and untapped markets. The imminent trends in the South East Asian region are the opportunity for contract manufacturing and demand for life style disorder drugs along with medicines for chronic conditions and infectious diseases, stated Gurudatta GG, chief executive officer, Estima Pharma Solutions.
Some of the countries in the region are showing specific interest in pharma manufacture and R&D. As far as manufacturing is concerned, Indonesia is fast emerging as a hub, and then export to other South East Asian countries. Vietnam is also coming up as a partial hub of manufacturing, as it gets closer to PIC/S compliance. For R&D, though Singapore is best choice, since operational cost of R&D is higher, people are looking at Malaysia also as some of the promising biotech/stem cell research companies are already there, said Pratomo.
Impending challenges
The imminent challenge in the region for companies to grow is the emerging price war. There are local dominant players and the IMS data is not close to 100 per cent accuracy as many family-owned companies do not want to share their actual data. Despite the fact that there is local marketing expertise since most of the companies are not public listed, log book / transparency is lacking. There is also the difficulty in retaining the brands, due to growing generic / branded generic market, said Pratomo.
On how markets of South East Asia look at India for imports, Pratomo, noted that SEA continues to view the country as very competitive which can supply quality affordable drugs, especially some hi-tech molecules in oncology and monoclonal antibodies (MABs).
The access to right trained workforce in pharma for SEA is a bit difficult in the sense mid-range personnel are easily available except Singapore and to some extent in Malaysia. But to scout for high end quality expertise was a bit difficult especially at R&D level or for New Chemical Entities, he said.
As the FAPA President elect, the priorities and focus areas are to harmonize registrations in SEA countries, just like in Europe where the marketing authorisation holder (MAH) in one country can be used to get faster registration in other countries, and with centralized procedure one can market across the European Union region. On similar lines that of Europe, there is an intent to have a system in place for the SEA countries, so that new companies can get faster access to the market. Further, there is a need to harmonize submission of dossiers as Asian harmonization for Common Technical Documents (ACTD) format, as some countries still continue to accept non-ACTD format. To get local pharma companies of SEA, more exposed to European or USFDA standards and audit compliance, there is an immediate need to further improve the quality of drug manufacturing by laying more stress on cGMP. In addition, it is also crucial to bring down the prices of essential drugs within the reach of every one, said Pratomo.
Indian presence in South East Asia
The Government of India is focusing on the Act East policy and Prime Minister Nazarene Modi has assured the ASEAN countries of its support towards the region’s interest during the ASEAN-India Commemorative Summit in India held on January 25, 2018 at New Delhi.
In the backdrop of this encouragement from the Union government, the Indian pharma companies are readying themselves with market build-up strategies in the South East Asian region. This is even as countries of Vietnam, Cambodia, Laos , Malaysia and the Philippines are wooing Indian pharma companies to invest in manufacturing facilities in the region.
The key driving factors are tax incentives, lower labour costs, government support and reaching untapped markets. The imminent trends in the South East Asian region are the opportunity for contract manufacturing and demand for life style disorder drugs along with medicines for chronic conditions and infectious diseases.
Indian companies face stiff competition from local companies in the South East Asian region on cost and quality. Regulated regions like the US and EU will now look at these markets for contract manufacturing to source much of their drugs. So Indian pharma companies in this region find it a challenge to export. In fact ,the entire South East Asian region does encourage Indian companies to market their products. Those companies with existing registrations or with novel drugs will only be able to make headway in this region, said Gurudatta who is a consultant for many of the local companies in the SEA.
Vietnam too is competitive in manufacturing with a presence of 400 local companies here. Other countries like Myanmar, Cambodia and Laos are proving their capability. Though countries like Indonesia and Malaysia are self -sufficient, some imports are possible and may look towards Indian pharma companies if they want to set up manufacturing bases here, he added.
Since contract manufacturing is coming up in a big way in Vietnam, it is worth taking a chance for Indian companies which want to set up a base here. With the waning interest of the US and EU on imports from India, it will make considerable business sense to focus on the South East Asian region, he noted.
The renewed aggression to enable growth for Indian pharma in South East Asia has led Estima Pharma which is a leading consultancy, to set up a base in Vietnam. We will take the total responsibility in terms of technical infrastructure and identifying the related skilled workforce too, if companies invest, said Gurudatta.
Going by the developments in the pharma sector in the South East region, there are possibilities of high quality Indian workforce to be employed in many of these facilities. The promising prospects for pharma industry has seen the evolution of venture capitalists and private equity in the region. Though there is no dearth of manpower , they need to be honed with adequate skilling. The best part of the region is the globally regulated production facilities. Last year, Estima successfully enabled a MHRA audit for a facility in Vietnam, said Gurudatta.