The Outlook for Pharmaceuticals in North East Asia

Sept. 19, 2011 /PRNewswire/ 

Diverse markets, diverse opportunities Geographically located in North East Asia, these four countries are currently undergoing different phases of development, both in overall terms and, more pertinently, in the growth of their respective pharmaceutical markets.Japan, South Korea and Taiwan represent highly developed pharmaceutical markets with advanced healthcare systems and high levels of spending, both in the private and public sectors. This has inevitably placed a strain on their respective governments which have in recent years tried to temper escalating spending by introducing various cost containment strategies, including periodical changes to reimbursement prices and the encouragement of generic substitution.Despite these measures, spending has continued to rise. Key factors are the ageing population and the high healthcare standards that the population has grown to expect. While governments hope to control healthcare costs, the trend suggests health spending will continue to rise in the long run.

China's big opportunity China's healthcare provision is somewhat lacking when compared to the other three countries, but it remains one of the fastest growing pharmaceutical markets in the world, in tandem with the country's rapid economic expansion. The influx of foreign multinationals has offered continued investment, and production plants and R&D facilities are being expanded all the time. Improvements in regulatory practices are making the ability to sell imported products quicker and easier, while the lowering of tariffs on imported goods and an increase in transparency of legislation has made a notoriously hard-to-penetrate market a more attractive proposition for overseas companies. These are positive moves, but concerns remain in key areas such as IP protection. Highlights from the region

CHINA In March 2011, WHO announced that the Chinese State Food & Drug Administration and its affiliated institutions meet WHO indicators for a functional vaccine regulatory system. Now that the Chinese regulatory system for vaccines complies with international standards, Chinese vaccine manufacturers are eligible to apply for WHO prequalification, and their products could obtain WHO prequalification in one to two years. Competitive strategies in the biologic sector in China in Q1 & Q2 2011 include: Merck Millipore opened its Biopharmaceutical Technical and Training Centre in Zhangjiang Hi-Tech Park, Shanghai; and Bristol-Myers Squibb and WuXi AppTec established a strategic partnership to conduct stability studies of small-molecule new chemical entities.

JAPAN On 11th March 2011, a large earthquake and tsunami devastated towns and villages in the prefectures of Fukushima, Miyagi and Iwate on the North-eastern coastline, destroying houses, industry and farmland, and seriously affecting several nuclear power plants. In terms of the human cost, the death toll from the disaster is estimated at 15,000, with a further 10,000 missing and 5,000 injured. In terms of the economy, the repercussions of the disaster have been detrimental in the short-term, but cannot be accurately forecast in the long-term as, at the time of writing, this remains an ongoing crisis. Preliminary reports suggest that the impact on the Japanese pharmaceutical market has been minimal. There was only minor damage to the majority of drug manufacturing facilities and these sites have now resumed operations; however, the rationing of electricity and water supplies has limited the scale of production. The pharmaceutical distribution network has been seriously compromised by heavy damage to communication and infrastructure, and this could have a knock-on effect on global supply chains.

SOUTH KOREA The biologic sector in South Korea is witnessing rapid growth. In the first half of 2011, a number of competitive strategies have been completed. Celltrion signed an agreement with Novacell Technology to develop biosimilars; Dong-A and POSTECH signed a MoU for co-operation on new biotechnology-based drugs; Il-Yang opened its new influenza vaccine plant in Eumseong, Chungcheon province; Korea Green Cross reported that its seasonal flu vaccine, GC Flu, had obtained WHO prequalification; Daewoong and Binex signed an agreement to jointly develop a biosimilar of Enbrel (etanercept); and Korea Green Cross and TEPIK announced a collaboration to develop and commercialise a cell culture influenza vaccine.

TAIWAN The Taiwanese biologics sector has benefitted from government investment and is set to grow during the forecast period. The government has been investing heavily in biotechnology research capability and this has encouraged its growth. The government has announced a programme for advancing the biotechnology industry called the "Diamond Action Plan for Biotech Takeoff". The programme aims to double the annual output of the country's biotech industry by 2013. There are around 300 biopharmaceutical companies that employ over 11,000 staff. The largest biopharmaceutical companies by sales include TTY Biopharm, Taiwan Biotech Company and Chunghwa Chemical Synthesis & Biotechnology Company.