Report from Asia - Pharmaceutical Technology

Latest Issue
PharmTech

Latest Issue
PharmTech Europe

Report from Asia
Global pharmaceutical companies have much to gain in Asia, and the good news is that it's a two-way street. Firms based in Asia are also expected to grow at the global level.


Pharmaceutical Technology
Volume 34, Issue 12, pp. 18-19


PHOTO: ULTRA.F, GETTY IMAGES
In recent years, the fortunes of big pharmaceutical companies have declined due to the global economic crisis as well as other issues such as expiring patents and dwindling pipelines in the industry. These changes have prompted companies to seek new markets and opportunities outside their traditional borders. Many are attracted to Asia given its largely untapped potential, low operating costs, huge population base, and rising occurrences of common diseases including cancer and heart diseases.

In a nutshell, Asia presents significant business opportunities for multinational companies, but there is work to be done. Reynold (Pete) Mooney, consulting leader for the life sciences and healthcare industry at Deloitte Touche Tohmatsu Limited (New York), explains, "Asia is not just one market but a diverse range of markets. As each market has its distinctive characteristics and dynamics, companies need to fine-tune what they do in a specific market in order to compete effectively."

Take, for example, sanofi-aventis (Paris) which is locally branding in each market in Asia via acquisitions. The company signed a collaborative agreement with Hangzhou Minsheng Pharmaceutical Group (Zhejiang) early this year, which marked its entry into the consumer healthcare segment in China. The French company has also inked a licensing deal with Glenmark Pharmaceuticals (Mumbai) for the development and commercialization of new molecules for chronic pain treatment. Again, this is significant for sanofi-aventis considering that the osteoarthritic pain market is estimated at $4 billion with 40 million patients. Similarly, Bayer (Leverkusen, Germany) has introduced high-growth therapy drugs (e.g., Glucobay for diabetes and Adalat for hypertension) in the Chinese market. Today, the Chinese market accounts for 3% of its group revenue.

In fact, many companies are starting to explore ways to enter Asia. "Given that the Asian market is developing rapidly, it will be advantageous for companies to enter early. This will give them the opportunity to gain experience and to grow alongside with it," says Mooney. India is one such market that pharmaceutical firms may want to focus on given the country's low-cost manufacturing and research and development. As the Indian market establishes itself over time, foreign players will have to build selling and marketing capabilities. However, Mooney points out that there will be mixed success of foreign companies in the Asian marketplace depending on their market-entry strategies.

Interestingly, governmental policies play a paramount role in ensuring the success of foreign firms in Asia. When China advocated its open-door policy and socioeconomic reforms, it attracted a significant amount of foreign fixed investments for its pharmaceutical industry. Between 1980 and 1988, there were approximately 1600 foreign establishments in the country. The government's commitment of US $125 billion to Chinese healthcare infrastructure and universal health coverage by 2011 has kept the interest of foreign companies and encouraged them to stay in China as an overseas market avenue.

The mergers and acquisitions (M&As) trend is also starting to emerge in the Japanese market. Under the Abe government, new regulations have opened doors for foreign firms to purchase Japanese firms. The move has paved the way to develop areas such as drug development and generic-drug manufacturing for Japan's aging population. In addition, the government's strong push to develop the generic-drug industry has attracted many multinational pharmaceutical companies into the country. For example, Lupin (Mumbai) is able to make inroads into the Japanese generic-drug market given its 80% stake of Kyowa Pharmaceutical.


ADVERTISEMENT

blog comments powered by Disqus
LCGC E-mail Newsletters

Subscribe: Click to learn more about the newsletter
| Weekly
| Monthly
|Monthly
| Weekly

Survey
What role should the US government play in the current Ebola outbreak?
Finance development of drugs to treat/prevent disease.
Oversee medical treatment of patients in the US.
Provide treatment for patients globally.
All of the above.
No government involvement in patient treatment or drug development.
Finance development of drugs to treat/prevent disease.
28%
Oversee medical treatment of patients in the US.
12%
Provide treatment for patients globally.
9%
All of the above.
45%
No government involvement in patient treatment or drug development.
7%
Jim Miller Outsourcing Outlook Jim MillerCMO Industry Thins Out
Cynthia Challener, PhD Ingredients Insider Cynthia ChallenerFluorination Remains Key Challenge in API Synthesis
Marilyn E. Morris Guest EditorialMarilyn E. MorrisBolstering Graduate Education and Research Programs
Jill Wechsler Regulatory Watch Jill Wechsler Biopharma Manufacturers Respond to Ebola Crisis
Sean Milmo European Regulatory WatchSean MilmoHarmonizing Marketing Approval of Generic Drugs in Europe
Seven Steps to Solving Tabletting and Tooling ProblemsStep 1: Clean
Legislators Urge Added Incentives for Ebola Drug Development
FDA Reorganization to Promote Drug Quality
FDA Readies Quality Metrics Measures
New FDA Team to Spur Modern Drug Manufacturing
Source: Pharmaceutical Technology,
Click here