The eight pharmaceutical markets of South East Asia are developing at markedly different speeds and are characterised by contrasting macroeconomic factors. These markets are projected to have a combined pharmaceutical market value of US$80 billion at retail prices in 2017.
South Korea is the largest market in this region and the fourth largest in the Asia Pacific region. Other advanced markets such as Taiwan and Singapore are both relatively small, with growth limited by the size of these island nations. These three countries have a high percentage of population over 65, a growing incidence of lifestyle diseases and large health expenditures, which present many opportunities for pharmaceutical companies. However, their governments are increasingly employing protectionist measures that deter foreign companies. The biological sectors in these markets are witnessing rapid growth due to advanced technology capabilities, extensive R&D operations and strong government support.
Indonesia, Thailand and the Philippines are fairly large emergent pharmaceutical markets, with large populations and steadily growing economies. Despite concerns over counterfeiting and low efficacy of generic products, IPR protection and manufacturing standards are improving thanks to effective national regulations, foreign investment and joint-ventures with multinational companies. Malaysia and Vietnam are small pharmaceutical markets, typified by rapid economic growth, increasing foreign investment and support from national government. These five markets have significant OTC sectors and rapidly expanding generic sectors, and present previously untapped populations for potential foreign pharmaceutical companies.
Complete analysis to keep you informed
Now you can easily evaluate these markets with The Outlook for Pharmaceuticals in South East Asia. Each report provides individual and highly-detailed analysis of the market, looking at the key regulatory, political, economic and corporate developments in the wider context of market structure, service and access. The reports are available individually, or as a discounted collection, and prices include eight completely updated reports sent quarterly, together with a comprehensive statistical appendix. The reports are available individually, or as a discounted collection.
Focus on Biotechnology - A research-friendly environment...
These markets are keen to attract high value investment and have identified biotechnology and biopharmaceutical research as key areas. Their governments strongly advocate the growth of biotechnology.
The government has indentified biotechnology as one of the core technologies to accelerate the transformation of the country into a knowledge-based economy by the year 2020. As a result of this initiative, a number of new biopharmaceutical research companies have emerged.
The biological sector is growing, with several large multinational companies investing over US$2.0 billion to set up biological facilities. The government is increasing its investment in biomedical sciences research over the period 2011 to 2015.
The biological sector is witnessing rapid growth, with many local companies expanding their operations. Several significant biological joint-ventures were completed in 2011.
The government has been investing heavily in biotechnology research capability, which has encouraged biological sector growth. The government aims to double the annual output of the biological sector by 2013.
Highlights from the region
Espicom has reviewed its market estimates, and projects the Singaporean pharmaceutical market to exhibit a high single-digit CAGR during the forecast period, with impressive economic indicators being tempered by the limited population size. It will be the third smallest pharmaceutical market in the Asia Pacific region covered by Espicom in 2017. The volume of trade in pharmaceuticals flowing in and out of Singapore is disproportionately large compared with the size of the country, due to its status as a distribution centre. The country exports a large amount of pharmaceuticals, although the majority of this total is from re-exported goods. The balance of pharmaceutical trade remains positive. Between 2006 and 2010, the surplus in the balance of trade rose by a low single-digit CAGR. Retail medicaments and raw materials accounted for significant proportions of the trade surplus.
In November 2011, a free-trade agreement (FTA) between the USA and South Korea (KORUS) was approved, and came into effect in 2012. The KORUS FTA includes the phasing-out of tariffs for US drug companies, which means they should be able to increase their market access to South Korea. Also, the introduction of a patent linkage system, whereby drug companies are unable to produce and sell generic drugs until the original patent expires, is expected to result in a drop of as much as 120.0 billion Won (US$103.0 million) in drug production each year over a decade. In July 2011, the EU-Korea FTA was implemented and is expected to increase the volume and value of EU pharmaceuticals to South Korea due to an elimination of tariffs on EU exports. It also aims to ensure further strengthening of transparency in drug pricing decisions.
The pharmaceutical market is projected to grow at a high single-digit CAGR in US dollar and local terms during the forecast period. This will make Taiwan the seventh largest pharmaceutical market in the Asia Pacific region, and the fourth largest in per capita terms. In 2010, there were 292 registered western-style pharmaceutical manufacturers and 130 traditional Chinese medicine (TCM) manufacturers in the country. Many multinationals are active in Taiwan, although the majority of them only have sales and marketing operations as they are deterred from establishing manufacturing operations due to the unequal drug pricing system. Taiwan is heavily dependent on the imports of retail medicaments, which represented 80.6% of the total imports in 2011. With limited pharmaceutical exports of only US$300.6 million in 2011, the balance of pharmaceutical trade will remain considerably negative and the deficit is likely to increase in the forecast period.
According to a report by the Vietnam Competition Administration Department, just three multinational distributors, Zuellig Pharma, Mega Lifesciences and DKSH, dominate the Vietnamese pharmaceutical market through a complex network which enables them to control the volume, thus prices, of drugs distributed in the country. The report criticised both foreign suppliers and local importers for adopting strategies such as predatory pricing, boycotts, exclusive deals and patent pooling to block competition from new suppliers and importers. According to the report, the major distributors worked together to force out new entrants to the market, and once this was achieved the price levels of drugs were then raised. The entry of new, generic products was prevented by patent pooling.
8 Markets Covered!
- South Korea