1、ASEAN Pharma Report: Opportunities in particular, as price controls across the region prevent increased costs being passed onto patients. As a result, increasing regional and international sale approaches are being sorted. This is 3ASEAN Pharma Report | CPhI South East Asia Opportunities and threats

2、 2020 and beyond especially the case among the few manufacturers that have achieved PIC/S standards. Of the major regional economies, Indonesia and Thailand with the introduction of GMP standards becoming wider spread appear to have the best short-term potential to support generics-led export growth

3、 strategies. Growing Focus on R with tier 1-2 generics required to be manufactured to EU-GMP or PIC/S-GMP standards. Estimates suggest that hospitals accounted for 75% of Vietnams pharmaceutical industry revenue in 2019, equating to around $4.9bn of the $6.5bn total. The number of EU-GMP and PIC/S-G

4、MP facilities in Vietnam is a serious problem curtailing the two key growth pathways noted above. It is here that investment opportunities for foreign companies present themselves as domestic companies looking for partners to help transform production technology. A recent example includes Germanys S

5、TADA who invested a 72% indirect shareholding in Vietnams Pymepharmcov, which owns oneof the 17 accredited facilities. However, several countries in the ASEAN region are now members of the Pharmaceutical Inspection Co-operation Scheme, which aims to harmonise inspection procedures across the globe b

6、y developing common GMP standards, providing training opportunities to inspectors, and facilitating co-operation between both regional and international organisations. In addition to Singapore, Malaysia and Indonesia joined the scheme in 2002 and 2012 respectively, whilst Thailand joined in 2016, an

7、d Philippines and Vietnam have both shown good interest in completing the process of applyingvi. Consequently, many generics manufacturers can expect to see increased costs as facilities are upgraded to meet the higher standards, but it will of course lead to an upside of reduced duplicate GMP inspe

8、ctions. The rewards are already being reaped in many markets, with Thai exports growing in popularity amongst immediate neighbours Cambodia, Laos, Myanmar and Vietnam in spite of cheaper alternatives available from India and China. This is strongly driven by the perception of higher quality. Looking

9、 at the bigger picture, attempts to harmonise ASEAN region regulatory standards with Western markets may provide significant new sales avenues, especially, as costs rise and regulatory scrutiny intensifies in China and India. So in addition to the high growth in exports anticipated to Australia and

10、New Zealand, there may also be opportunities to grow in Europe and even North America. Indonesia The countrys pharmaceutical industry is expected to see increased revenues thanks to the introduction of the Jaminan Kesehatan Nasional (JKN); a new Universal Health Care Scheme. Predicted rises in incom

11、e per capita will also drive sales of OTC medicines in the coming years. But, what is significant for overseas companies is the Governments act of loosening ownership restrictions on domestic firms. Consequently, foreign investors are now able to own 100% of partnerships; a figure that was previousl

12、y 75%. Currently, 70% of drug manufacturers in Indonesia are domestic, but this figure is expected to decrease in the coming years due to foreign investments of circa $20bn over the next 5-yearsvii. 4ASEAN Pharma Report | CPhI South East Asia Opportunities and threats 2020 and beyond Philippines The

13、 demand for healthcare in the Philippines is rapidly increasing for many of the same reasons as most other Southeast Asian countries. An aging population and greater incidence of lifestyle-related diseases coupled with a rising GDP per capita will see increased consumer spending on pharmaceuticals.

14、Being already the third-largest pharmaceutical market in ASEAN, just behind Indonesia and Thailand, IMS Health forecasts that the Philippino market will see 4.5% annual growth over the next few yearsviii. In particular, the countrys generics market is forecast to grow at an accelerating rate thanks

15、to a number of Government reforms and the pending introduction of a Universal Health Coverage scheme which will see a basic level of healthcare available for all Filipinos in the future. New laws have also made it mandatory for public hospitals to provide generic drugs, whilst physicians are slowly

16、beginning to endorse the prescription of generics to patients, having previously always opted to prescribe more expensive, branded alternatives. The rise in demand for high-quality generics is opening up a fantastic opportunity for both domestic and foreign players alike. The country is also well se

17、t with its manufacturing base, with 14 of the worlds top 20 pharma companies owning manufacturing facilities in the Philippines. Malaysia The Malaysian Cabinet announced in May 2019 that External Reference Pricing will be implemented to benchmark drug prices at wholesale and retail levels, with the

18、aim of reducing costs for consumers. These price controls will cap trade margins for drugs in the country, which will have a cascade effect on all players in the Malaysian pharmaceutical supply chain. The Pharmaceutical Association of Malaysia (Phama) has many concerns with the drug pricing strategy

19、, notably that patient access to the newest medicines may be put at risk as international manufacturers may possibly withdraw their products from the market due to unfavourable business conditionsix. Both foreign and domestic pharmaceutical companies will have to reconsider their business strategy i

20、f they are to retain their levels of profitability following the implementation of these drug price controls. Singapore In contrast with the majority of ASEAN countries, Singapore has a well-developed, mature pharmaceutical market built upon a country with high levels of personal wealth with a reput

21、ation for high quality and even innovative manufacturing services. The Government has further supported development with a number of schemes to drive innovation. Most recently, it committed to investing $2.4bn to improve manufacturing and engineering in pharma as part of a 2020 Research, Innovation

22、and Enterprise planx. Additionally, a memorandum of understanding between the Agency for Science, Technology and Research, the National University of Singapore and a number of large pharma companies were signed to launch the Pharma Innovation Programme Singapore. This is a manufacturing initiative d

23、esigned to boost the competitiveness of research companies in Singapores public sector by supplying them with the expertise from big pharma players. The programme will help develop continuous manufacturing for API production, as well as implementing biocatalysis technologies for more sustainable pro

24、duction of complex and valuable chemicals. Notable investments in the market from big pharma in previous years include GSKs $130m continuous manufacturing facility, as well as WuXi Biologics and Novartis biologics plants, with the companies investing $80mxi and $500mxii respectively. Singapores biom

25、edical manufacturing output has increased subsequently by nearly 10% in the first half of 2019 compared to the corresponding half of 2018. This has further established its reputation as a prosperous biomedical manufacturing hubxiii. Generic dossier approval timelines For the countries that have defi

26、ned dossier approval timelines there remains a high degree of variance for generic drug applications. A 2018 RAPS report examining the drug regulatory landscape in the ASEAN region estimates timelines range from just three months in Cambodia, six months in Malaysia and Laos, to nine months in Singap

27、ore and a year in Indonesia and the Philippinesxiv. This Analysis This report summarizes the findings of in-depth surveys carried out amongst 45 pharma executives from across six Southeast Asian countries, as well as international perspectives from European companies. It provides a holistic picture

28、of recent trends, challenges and most crucially, future opportunities for the pharma sector across the region. 5ASEAN Pharma Report | CPhI South East Asia Opportunities and threats 2020 and beyond Fastest Growing Sectors An analysis by sectors of both domestic and international responses show generi

29、cs and patented products are forecast to experience the fastest growth in Southeast Asia. Biologics and biosimilars (with the exception of Singapore) are not currently seen as promising growth areas by the majority of respondents. Regional companies stated that the fastest growing segments are gener

30、ics (47%) and patented small molecule drugs (33%), followed by biosimilars (13%) and novel biologics (7%). International respondents largely followed this analysis identifying the markets major potential in generics (50%) and patented small molecules (25%), with biologics (15%) and biosimilars (10%)

31、 some way behind. With pro-generic policies and cost-containment initiatives in place, demand for solid dose formulations as well as newer emerging export markets for cheaper and branded generics offer the fastest returns. This is also where the majority of domestic and regional pharma companies hav

32、eexpertise. Figure 1 (top): Indicates the domestic response on which product class has the largest growth opportunities in the Southeast Asia region Figure 2 (bottom): Demonstrates the International response on which product class has the largest growth opportunities in the Southeast Asia region Fig

33、ure 1: Shows the domestic response on which product class has the largest growth opportunities in the 055404550 Generics Patented Products Biosimilars Biologics Other Respondents (%) Regional responses: which product classes have the best growth opportunities in the SEA region Figure : Sh

34、ows the International response on which product class has the largest growth opportunities in the 00 Generics Patented Products Biosimilars Biologics Other Respondents (%) International responses: which product classes have the best growth opportunities in the SEA region Fig. 1 Fig. 2 6AS

35、EAN Pharma Report | CPhI South East Asia Opportunities and threats 2020 and beyond Domestic Response Summary Interestingly, Southeast Asian companies sourced the majority of their API requirements from foreign sources. There was a heavy reliance on both China (60%) and India (47%). However, Europe (

36、40%) featured surprisingly strong. The data are not conclusive but it might suggest a two-tier market for API sourcing; some using the lowest cost option from the big Asian providers with more expensive branded medicines produced sourcing some of their requirements from Europe. Most surprisingly, a

37、further 20% of respondents stated they sourced from the United States and 5% from Japan. Significantly, only 27% of companies sourced ingredients domestically, indicating that local economies are struggling to compete with the lower cost of the large regional manufacturers in China andIndia. Figure

38、3: Postulates the domestic response to regions/ countries targeted for the import of APIs Countering Counterfeiting The global counterfeit drug market is an extremely lucrative one, with the WHO valuing it at over $30bnxv. What raises more concern is a recent study by the UN Office of Drugs and Crim

39、e (UNODC) found that Southeast Asian consumers spend as much as $2.6bn on drugs that “may contain next to no API needed to cure the disease in question”xvi. The perception of the Southeast Asian pharma market as a hub for counterfeit pharma products is shared by the executives surveyed, with 86% agr

40、eeing with the statement. Significantly, however, half of the respondents agreed that the problem does exist, but its not as large as perceived externally. Figure 4: Indicates the perception of the SEA as a hub for counterfeit pharma products and if this perception is fair Figure : Shows the domesti

41、c response to regions/countries targeted for the import of APIs 0070 China India Europe United States Japan South East Asia Respondents (%) From what countries do domestic companies import APIs Figure : Shows the perception of the SEA as a hub for counterfeit pharma products and if this p

42、erception is 055404550 Yes - Market Has Problem Yes - Problem Not As Large As Perceived No Respondents (%) SEA Perception as Counterfeit Hub Fig. 3 Fig. 4 7ASEAN Pharma Report | CPhI South East Asia Opportunities and threats 2020 and beyond Governments across the region have implemented d

43、ifferent solutions to address counterfeiting. Thailand tightened its patent approval regulations and introduced more rigorous enforcement of IP regulations. President Rodrigo Duterte of the Philippines ordered a major crackdown on the makers and sellers of fake medicines. At a regional level, ASEAN

44、Health Ministers highlighted the issue of online counterfeits in their annual meeting in September 2019. A key finding from our research suggests the regional industry now favours introducing large scale counter measures, supply chain tracking and serialization. In fact, an overwhelming 93% of the i

45、ndustry experts surveyed believe that the Southeast Asian market would significantly benefit from a Track and Trace-style scheme to reduce the space for counterfeiting in the region. Data from the Pharmaceutical Security Institute (PSI) shows that of the 673 incidents of counterfeiting and illegal d

46、iversion in ASEAN from 2013 to 2017, 193 occurred in the Philippines, 110 in Thailand, 93 in Indonesia, and 49 in Vietnamxvii. Figure 5: Demonstrates the percentage of SEA respondents that agree the region would benefit from a Track one major red flag when potentially investing in the SEA region is

47、a discrepancy in regulations and standards across Southeast Asian countries. More than half of respondents believe that standardised regulations and harmonisation across all SEA countries would make the region more attractive for investment, with a further 30% citing that they agreed but that standa

48、rdisation is already underway. Figure 16: Reveals the impact of standardized regulations and harmonization across all SEA countries on making the SEA region more attractive for international companies 0554045 Invest in new facility in SEA Partner with local manufacturer Import directly Us

49、e a distributor Respondents (%) Growth Strategy in SEA in next 3 years 0554045 Yes but more training of inspectors is still needed Yes this has hugely increased trust in Thai manufacturers Not yet as there are still several barriers to overcome to make them truly internationally competitive No Has PIC/S improved confidence in Thai Manufacturing 0554045 Fig. 14 Fig. 15 ? Respondents (%) 13ASEAN Pharma Report | CPhI South East Asia Opportunities and threats 2020 and beyond Interestingly, one of the risk factors identi