Asia Pharmaceutical Market - Turning obstacles into opportunities
With its low production costs, Asia is set to be the next pharmaceutical manufacturing powerhouse in the world. Having a pharmaceutical market valued at US$144 billion in 2007 and growing at an astounding rate of 10.5%, foreign pharmaceutical MNCs are all shifting their focus to Asia.
Yet, with different sets of reimbursement policies and research incentives put in place for each country in the Asia region, pharmaceutical companies would need to know which country would give them the best benefit. Government’s reimbursement for drug manufacturers can take two forms – research and sales, foreign pharmaceutical companies would have to analyze each country and determine which area of focus one should take for each country.
Putting focus on research, Singapore and China are countries not to be missed. As Singapore works towards establishing itself as a regional pharmaceutical research hub, huge financial support is given to researchers and pharmaceutical companies to conduct their research endeavors in Singapore. Furthermore, presence of state-of-the-art pharmaceutical infrastructures such as the Biopolis are added incentives for research-based pharmaceutical companies.
Similarly for China, there are many funding options pharmaceutical researchers can leverage on. The new Corporate Income Tax Law is one example in which tax incentives are provided to encourage R&D activities in China. Coupled with china’s combination of cheap laboratory set-up costs as well as huge research talent pool, China is an ideal location for setting up of research operations.
To achieve high sales figures, it is ideal for drugs produced by companies to enter the essential drug list of each country. The drugs in the list are drugs that are covered by government reimbursement/insurance and are deemed as essential to the country. However, due to different disease burden, essential drug list vary from countries to countries.
Countries such as Vietnam, Myanmar and Indonesia put huge focus on drugs countering communicable diseases such as tuberculosis and malaria. China, on the other hand is working towards expanding their essential drug list to cover drugs that are essential to curing cancer. As such, it is crucial for pharmaceutical companies to understand the disease burden of each targeted country so as to better fight for one’s drugs to be in the essential drug list of each country.
However, multinational pharmaceutical companies should take note that getting into a country’s essential drug list might not be the key to successful distribution of the drug. One would have to examine the country’s OTC and generic drug market as well. Indonesia and Thailand are countries, which prefer generics, and local drugs rather than foreign drugs and thus the focus of foreign pharmaceutical companies in these countries might have to shift..
- What are the incentives that our research team can harness from each country?
- What are the opportunities available for our pharmaceutical products which are currently in the market?
- How can our organization develop in the targeted country now and in the next 5 or 10 years?
- What are the disease burdens of each country and how can we capitalize on it?
- How are the disease patterns in each country going to be in the next 5 or 10 years? What are government’s initiatives?
- Who are the ones that determine the country’s essential drug list?
- Who are the local drug lobbying parties that one can work with?
- How are policies likely to shift towards in the next 5 or 10 years?