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Innovating health: The rise of Thailand's pharmaceutical industry
Thailand Board of Investment (BOI)
The healthcare sector in Thailand has long been a beacon of excellence in the region. With a robust infrastructure, an international reputation for highly-skilled medical professionals, and services that meet global standards, Thailand has solidified its status as the medical hub of Asia. The advent of the COVID-19 pandemic further showcased Thailand's exceptional healthcare system, highlighting its preparedness for health crises and underlining the critical role of the medical industry in both managing the pandemic and revitalising the economy under a new global context.
One of the industries at the forefront of Thailand's healthcare achievements is the pharmaceutical sector. This industry has become a focus for development, driven by an increasing rate of illnesses post-pandemic, improved access to medications through the universal healthcare scheme, and the resurgence of health tourism. The demand for pharmaceuticals continues to rise, further emphasised by the ageing population in Thailand, which accounted for around 19.7% in 2023 and is expected to reach 26.9% in 2030. This demographic shift underscores the growing importance of pharmaceuticals in addressing the health needs of an ageing society.
According to Krungsri Research, the value of the pharmaceutical market in 2023 was expected to grow by 5.5-6.0%, with growth projected to continue through 2025 at an average of 5.0-6.0% per year. This positive trend highlights the vibrant potential of the Thai market.
Beyond conventional medicine, Thailand has made significant strides in developing biopharmaceuticals. The market has experienced remarkable growth, with local researchers and companies developing highly efficient and adaptable innovative products. The COVID-19 outbreak was a particular moment of triumph, as Thai researchers developed various treatments, including the ChulaCov19 mRNA-based vaccine, Chula-Baiya protein subunit vaccine, and CoviTRAP nasal spray, showcasing the nation's capability in innovative healthcare solutions.
To bolster the pharmaceutical ecosystem, Thailand has established numerous support facilities, such as the National Biopharmaceutical Facility and the National Biobank of Thailand. These initiatives are aimed at enhancing Thai expertise in research and development and scaling up production to meet market demands.
The Eastern Economic Corridor of Medicine (EECmd) has also been established as a medical valley and hub for genomic medicine. This targeted zone focuses on medical research and is expected to house a digital hospital, wellness health resort, senior living facilities, and a sports complex, offering comprehensive services to meet global health demands.
THE GOVERNMENT’S SUPPORTING POLICY
The government has identified the medical industry as one of the new engines of growth among the 10 S-curve industries since 2018, emphasising its role in transforming Thailand's economy. The new 5-year promotion investment strategy (2023 - 2027) from the Thailand Board of Investment (BOI) still marks the pharmaceutical industry as an area of focus. Investors in the pharmaceutical industry have been offered substantial support through a range of tax and non-tax incentives, including up to 8 years of corporate income tax exemptions.
Eligible activities under this new scheme include biotechnology, active pharmaceutical ingredients, and medicines, along with incentives for medical devices and medical services. This comprehensive support enhances Thailand's appeal as a destination for the pharmaceutical industry and strengthens the overall ecosystem supporting its vision to become a genuine medical hub.
Tax:
- Exemption of import duties on machinery
- Exemption of import duties on raw materials used in production for export
- Exemption of import duties on raw materials used in R&D
Non-tax:
- Permit to own land
- Permit to bring into the Kingdom skilled workers and experts to work in investment promoted activities
- Permit for foreign nationals to enter the Kingdom for the purpose of studying investment opportunities
- Permit to take out or remit money abroad in foreign currency
(See more details on eligible activities for investment promotion related to pharmaceutical sector, on the table in the main article)
Additionally, the BOI supports investment in the Yothi Medical Innovation District (YMID), offering a 50% corporate income tax reduction for five years on top of the standard package for eligible projects that collaborate with educational and medical institutions within the innovation district.
These ambitious actions by Thailand to develop its pharmaceutical industry and supply chain demonstrate the country's readiness to optimise opportunities in this exciting growth sector. With a clear vision and strategic support, Thailand stands ready to welcome new investments, offering a compelling proposition to investors looking to engage with an innovative and growing pharmaceutical market. The rise of Thailand's pharmaceutical industry is not just a testament to its resilience and innovation but also an invitation to the world to participate in shaping the future of global healthcare.
Contact details:
Thailand Board of Investment
+66 2 553 8111
