CoverStory
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BIOSCIENCE BUSINESS IN APAC
Cultural diversity
Lack of critical mass
Policy issues
Raising capital
Human resources
Regulatory issues
Currency Fluctuation
Partnering
Price sensitivity
Mid-size CROs 6
CHALLENGES
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KH $VLD 3DFLÂżF KHDOWKFDUH PDUNHW LV H[SHFWHG WR represent 34.6 percent of the global healthcare market by 2015. Frost & Sullivan estimates that by 2020, healthcare expenditure in the APAC ZLOO LQFUHDVH SHUFHQW RYHU ÂżJXUH WR DOPRVW trillion at a compound annual growth rate of 9.2 percent. The reason cited is a shift in the pharmaceutical markets of the world, away from the major developed powers of the US, Japan, Europe, towards a set of new, dynamic, fast-growing emerging economies of China, India, and South Korea among others.
The positive healthcare market outlook for the APAC region is also based on the fact that there is a growing middleclass and an aging populace in this region. Countries such as the Philippines and Vietnam have reached a threshold of economic development and volume of future growth that need immediate attention. Collectively, these emerging markets offer high potential, with rising gross domestic product, expanding access to healthcare and an improving intellectual property and regulatory environment. However, the opportunities come with a set of challenges, some of which are unique to the region. The APAC is characterized by diverse therapeutic segments, different and complex regulatory laws and a fragmented market, and the global economic crisis has added a new layer of complexity to the already challenging environment. %LR6SHFWUXP LGHQWLÂżHV FKDOOHQJHV WKDW DUH FRPPRQ WR WKH UHJLRQ DQG are going to prove to be hurdles before the industry.
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CoverStory
Cultural Cul tural div diversity versity
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he countries in Asia have different languages, cultures and religion. Some of them are even a melting pot of people from different linguistic, cultural and historical backgrounds. This diversity often makes LW GLIÂżFXOW IRU EXVLQHVVHV RSHUDWLQJ in the region to understand and adapt to these diversities. “This vast diversity of cultures and languages is a challenge before the bioscience industry in the region,â€? says Mr Kamal Joshi, senior manager-IP Protection & Commercialization, Venus Remedies, India.
MNCs face a challenge because they don’t have an inherent understanding of the provincial market dynamics of the region
Mr Rahul Dev, managing partner, Tech Corp Legal LLP, India, agrees that this is a challenge for companies doing business in the region. “There is a vast diversity of cultures, languages, and economic and governance models. Therefore, a general approach followed by various organizations is to form a base in Japan or Singapore for focusing on research capabilities mainly, and simultaneously concentrating on the fast-growing markets of China and India,� he says. “The pharmerging markets of China and India undoubtedly present major opportunities for Australian biotech
companies,� says Dr Deborah Rathjen, CEO & MD of Bionomics, Australia. “But many managers are uncertain about how to go about building links with Asian countries and to surmount the plethora of legal, linguistic, and often protectionist challenges they present.� She adds that these “heavily regulated and culturally demanding environments do offer enormous opportunities, particularly in China, where the local biotech industry, bolstered by massive government investment, has seen an annual growth above 20 percent in the last three years.�
Within the APAC region, China alone has vast regional differences, points out Mr Ling Sun, analyst, Datamonitor Healthcare, China. He adds that it SRVHV VLJQL¿FDQW FKDOOHQJHV IRU PXOWLQDWLRQDO FRPSDQLHV (MNCs), which typically don’t have the same strong relationships and inherent understanding of provincial market dynamics as compared to domestic players. This is one reason that MNCs have focused their efforts, until now, on penetrating the larger tier I and tier II markets of eastern China.
Lack of critical mass
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Strasbourg and Nantes in France, Milan in Northern Italy, and Edinburgh in Scotland, have biotech hubs.
In the West, cities like Boston or San Francisco in the US, the Medicon Valley spanning the waterway between Denmark and Sweden, the Swedish city of Uppsala, cities of
Dr Bhuwnesh Agrawal, chairman and managing director, Roche Diagnostics India, says, “Geographical distribution RI LQVWLWXWLRQV DQG ELRWHFK ÂżUPV and poor infrastructure mean that
KH $VLD 3DFLÂżF UHJLRQ EDUULQJ WKH GHYHORSHG QDtions of Australia and Singapore, still needs to have “critical massâ€? where interdependent bioWHFKQRORJ\ ÂżUPV H[LVW DQG VXSSRUW HDFK RWKHU directly and indirectly with or without the support of the ancillary industry. “The region doesn’t have a real critical mass of biotech hubs, such as in the West, like in Boston or San Francisco,â€? points out Dr Joseph Santangelo, CEO Inviragen, Singapore.
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CoverStory WKH HI¿FLHQF\ RI WKH ZRUNIRUFH LV VLJQL¿FDQWO\ UHGXFHG DQG WKH WLPH WDNHQ IRU VHUYLFH LQFUHDVHG :H GH¿QLWHO\ need better infrastructure, which is well-recognized by all stakeholders, and this can only be dealt with the long term.�
Policy issues
Dr Anna Lavelle, CEO, AusBiotech, points out that Australia lacks infrastructure for the medical technology industry. It needs to look at developing critical mass, such as that in the New South Wales, she says.
POLICY ISSUES
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ne of the issues is that local governments often have policies favoring local companies with only some relief for MNCs that bring in huge investments. They also enforce strict new Good Manufacturing Practices (GMP) guidelines that are too costly for many small domestic players to implement. Then there are issues like high customs duties and taxes on imported goods. Another issue, although not unique to Asia, is the purchase of products by the governments through tenders that limits competition.
facturers to provide extremely low bids to win contracts, sometimes lower than the cost itself. As a result, quality and safety issues arise, or manufacturers later choose to stop producing the product at a loss and drug shortages ensue.� Beijing adopted a model similar to Anhui in 2006, but abandoned Customs duty on healthcare it soon after since it met considerable resistance from regional products raises costs for patients. 0\`T[XPY_ `^PO TY WLM^ _ZZ MPNZXP medical facilities. After a threeyear pilot program, stakeholdexpensive due to taxation on ers in the healthcare system are questioning whether such the imported goods model should be adopted in other administrative regions.
Dr Joseph Santangelo, CEO, Inviragen, Singapore, gives an example to elaborate on such issues. “A company can perform clinical trials for unlicensed biologics in China only if they are a registered Chinese company and the materials are manufactured in China. In my opinion, this is not in agreement with the World Trade Organization commitments,â€? he says, adding that some Asian countries, for example Japan, also do not recognize clinical data on (some) studies conducted outside their country. “Businesses in India are done generally through government tenders and hence include lengthy processes and formalities. Funding is based on Central Government budget and fund distribution is not even. Purchase process is long and funding not available for reagents. These VKRXOG EH VLPSOLÂżHG ´ VD\V 'U %KXZQHVK $JUDZDO 5RFKH Diagnostics India. Mr Ling Sun explains some of the trends in the Asia PaFLÂżF Âł$QKXL 0RGHO D SLORW KHDOWKFDUH UHIRUP SURJUDP introduced during the 2009-11 healthcare reforms, is the double-envelope tendering mechanism. Government ofÂżFLDOV ÂżUVW VHOHFW GUXJV ZLWK JRRG TXDOLW\ DQG WKHQ D GLIferent independent panel chooses the tenderer with the lowest bidding price,â€? he says. “This encourages manu8
Besides the government tender process, Dr Bhuwnesh Agrawal of Roche Diagnostics India says custom duties on healthcare products increase the cost for patients “who have to deal with emotional issues, health problems and also huge costs, pushing many below the poverty lineâ€?. He VXJJHVWV D ZDLYHU RQ GXWLHV WR KHOS UHGXFH ÂżQDQFLDO EXUden on patients and make healthcare more affordable. Dr Mallik Sundaram, CEO, Mitra Biotech, India, has a similar view on costs. “High taxation on imported goods in India means most equipment that we use in our labs cost us almost twice as it does in the US.â€? Continuing to share trends in China on new GMP guidelines, Mr Ling Sun says, “In February 2011, the State Food and Drug Administration (SFDA) in China issued Order 79 on GMP for pharmaceutical products. These guidelines are the strictest in China’s history, and will lead to major changes in the Chinese pharmaceutical industry.â€? According to him, “all new pharmaceutical manufacturing facilities must obey the more stringent standards, effective immediately, while existing manufacturing plants that produce sterile drugs, including blood products and vaccines, must implement the new standards and practic
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CoverStory es before the end of 2013â€?. The new GMP guidelines will put great pressure on small- and medium-sized (SME) domestic drug manufacturers, which account for nearly 90 percent of the 5,000 pharmaceutical companies in China, he points out. “Furthermore, the SFDA made public statements warning that at least 500 SMEs will be shut down if they do not comply with the guidelines. As a result, it is expected that pharmaceutical companies will need to invest $31.6-47.4 billion (CNY200–300 billion) to fully meet the new requirements.â€? *LYHQ WKH VLWXDWLRQ 'DWDPRQLWRU H[SHFWV VLJQLÂżFDQW LQdustry consolidation, providing a good opportunity for MNCs to make acquisitions and expand their business in China, says Mr Ling Sun of Datamonitor Healthcare, China. Intellectual Property Protection is another major issue in the emerging markets, such as India, China and Thailand. Mr Ling Sun says though the situation is improving, it is still troublesome for the MNCs. “Traditionally, MNCs have only launched off-patent drugs in China rather than going ahead with their branded products due to concerns over intellectual property protection. However, MNCs have begun to launch innovative drugs in China along with their ODXQFK LQ PDMRU JOREDO PDUNHWV WR WU\ DQG JDLQ ÂżUVW WR PDUket advantage,â€? he says, adding that it makes robustness of intellectual property protection in China a key issue.
ics manufacturers could begin manufacturing, though not selling generics before patent expiry of a product). “There are also indications that the data exclusivity provisions are not implemented in practice, although they are required by law (King & Wood, 2012). Compulsory licensing, counterfeiting and drug piracy also remain sigQLÂżFDQW FRQFHUQV IRU EUDQGHG SKDUPDFHXWLFDO FRPSDQLHV in China,â€? says Mr Ling Sun. Most of the Asian high-tech start-ups with cutting edge technology need to build IP portfolios and the ownership of this portfolio plays a crucial role in increasing market value of the company. “Companies such as HistoIndex, which enter into research collaborations need to make great effort to own any foreground IP in a manner that is fair and equitable. That, at times, is a challenge by itself,â€? DGGV 'U 1RHO 0RRUH FKLHI H[HFXWLYH RIÂżFHU +LVWR,QGH[ a Singapore-based company. Commenting on the recent decision of the Controller General of Patents of India and the Indian government to bust the monopoly of Bayer’s anti-cancer drug Nexavar through compulsory licensing of Bayer’s patent, Mr Rahul Dev of Tech Corp Legal LLP, says, “It has opened the ÂżHOG IRU WKH JHQHULF LQGXVWU\ WR IROORZ VXLW DQG FRXOG ZHOO pave the way for availability of cheaper drugs for lifestyle diseases. In the near future, more generic companies could invoke the compulsory licensing clause of the Indian Patents Act. The landmark judgment by the Indian 3DWHQW 2IÂżFH LV QRZ EHLQJ VHHQ DV D WHVW FDVH DQG LW LV DOmost certain that Bayer will go to court on this issue.â€?
Although the situation regarding intellectual property rights has improved since China joined the World Trade Organization in 2001, the State Intellectual Property 2IÂżFH VWLOO GRHV QRW SURYLGH SDWHQW H[WHQVLRQV DQG WKH He says this will force MNCs that are keen on investing updated 2008 patent law provides an infringement ex- in the emerging markets to think twice about where to emption for generic drug makers (meaning local gener- invest in the region.
Raising capital
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ack of appropriate funding for earlyto mid-stage innovation companies, limited local capital, local grants for small biotechQRORJ\ ÂżUPV UHODWHG WR WKH percentage of GDP spent on research (unlike the support available under the US National Institutes of Health granting schemes) and strings attached to funding are posing tough problems for companies trying to raise capital to run small biotechnology businesses involved in research and development.
“Access to capital is an ongoing challenge and government funding support and private capital will continue to be important to raise the much-needed captial for the industry,� says Dr Anna Lavelle of AusBiotech. “Many small companies with great ideas have been unsuccessful due to their inability to raise funds needed to navigate the commercial and regulatory loops to take a new medical discovery to market,� says Dr Deborah Rathjen, CEO & MD, Bionomics, Australia.
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CoverStory Dr Noel Moore of HistoIndex says they were fortunate in Singapore in attracting smart money and to use that foundation to attract government investment. “However, this was a longer process than it should have been due to the novel nature of the technology and the
industry. This meant that we had to really search extensively for investors who could not only understand the business model, but also could add value to it. Once we achieved that, the effort was well-rewarded by investors who acted like partners, pushing us towards our goals and supporting us through challenging times,” he says.
Human resources
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ack of trained and skilled work force, identifying a marketsavvy work force and retaining the right people on key positions are problems in certain regions, especially for conducting R&D. Commenting on the human resources trends in Australia, Dr Deborah Rathjen, comments, “Recent shifts in the global pharma landscape has enabled us to boost our “people power”. In the past, attractive offers from the US and European companies lured away talented, high-caliber managers and technical staff from small Australian biotech companies. The downsizing and realignment of the pharma industry, which has occurred in the US and Europe over the past several years has opened the way for Australian biotech companies to attract highly experienced personnel, particularly in regulatory affairs, clinical development and marketing, to boost the ranks of its increasingly PDUNHW VDYY\ ZRUNIRUFH 7KLV LV D WUHQG WKDW LV EHQH¿WLQJ not just Australia but the entire Asian region.” Commenting on the lack of skilled workforce in India, Dr Bhuwnesh Agrawal of Roche Diagnostics India says, “Talent retention is a major issue in the life sciences and biotech industry. The dearth of talent facing the industry means that companies have to pragmatically decide how best to manage and leverage talent that we have, understanding that the education system may only be able to ¿OO WKH GHPDQG DQG VXSSO\ JDS LQ \HDUV UDWKHU WKDQ two. Personnel development initiatives to foster and nurture talent within the organization can help in retaining talent.” Mr Rahul Dev of Tech Corp Legal LLP India points out, “One challenge in operating in the India market is the war for good talent and the most important talent need is for creative thinkers who bring an entrepreneurial ori10
entation and long-term vision to the business.” Dr Noel Moore of HistoIndex, Singapore, says Singapore’s very robust economy and hot employment market reVXOW LQ GLI¿FXOW\ LQ LGHQWLI\ing and retaining the right people for key positions. “As a young company without the history and reputation of an established MNC, LW LV RIWHQ GLI¿FXOW WR DWWUDFW WKH right talent. This is at odds with the needs of high potential start-ups where you must have dynamic, driven and ambitious people to push towards the company’s full potential. To overcome this challenge at HistoIndex, we relied heavily on our personal networks for recruitment of key staff. In that way credibility and trust were the basis of the relationship. While this is not a sustainable solution, it served us well in the initial, more volatile period,” says Dr Moore. Reacting to the supply and demand of talented work force in Singapore, Dr Andreas Schmidt, CEO, AyoxxA Living Health Technologies, says, “Convincing the best and the brightest around the world to work for your company and continue to be excited about it are always key factors for success.” Dr Kanyawim Kirtikara, executive director, National Center for Genetic Engineering and Biotechnology (BIOTEC), Thailand, says, “Skilled manpower specialized in upscale process is limited. This affects the industry that usually requires ready technology or product. We are trying to match the laboratory-ready projects with private companies, both Thai and foreign. In addition, we are not good in terms of sales and marketing. The biotech industry needs mechanism to develop their channel to the international market.”
BioSpectrum | April 2012 | www.BioSpectrumAsia.com | A CyberMedia Publication
CoverStory x?SP [SL]XP]RTYR XL]VP_^ ZQ .STYL LYO 4Ydia undoubtedly present major opportunities for Australian biotech companies. But many managers are uncertain about how to go about building links with Asian countries and to surmount the plethora of legal, linguistic, and often protectionist challenges they present.�
“Access to capital is an ongoing challenge and government funding support and private capital will continue to be important to raise the much-needed captial for the industry.� | /] , ,YYL 7LaaPWWP . .0: : , ,`^-TZ Z_PNS
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Regulatory issues
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he regulatory environment for life sciences companies is known for its challenging nature. The framework is confusing and at times overshoots the understandable need to protect patients with regulation making life-saving tests often unaffordable. Also, the Asia 3DFLÂżF UHJLRQ ZKLFK KDV PDQ\ FRXQtries with their own rules and regula-
tions, lacks regulatory harmonization, resulting in longer time for clinical validation of products. “With newer set of regulations and guidelines each year, compliance can be a painful and costly affair. Creating forums where government policy makers and company regulatory personnel meet to dis A CyberMedia Publication | www.BioSpectrumAsia.com | April 2012 | BioSpectrum
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CoverStory cuss general issues in the regulatory environment and ways to improve and expedite the process could be a positive step forward, as is common in many other countries,� says Dr Bhuwnesh Agrawal of Roche Diagnostics India.
pass many hurdles such as complicated regulatory framework and a lengthy process for getting a product registered and then getting it added to the national reimbursement list,â€? he adds. In Australia, he says, the challenge for pharmaceutical companies “is the upcoming patent expiration for drugs developed in the 1980s and replicatLQJ WKRVH SURÂżW VWUHDPV´
One of the greatest challenges before any medical technology company is not the required regulatory approval to sell in a particular jurisdiction, but the clinical market VL]H IRU WKH SURGXFW WKDW MXVWLÂżHV WKH FRVWO\ UHJXODWRU\ DS- “There certainly are issues in terms of speed and a lot still proval process. “The last thing any company would want requires to be done to minimize the time line for approvis to spend huge amount of resources to obtain regula- als. We don’t believe in criticizing the government betory approval only to realize that cause it doesn’t help. We are the approved product has a limited all part of the same process :YP ZQ _SP R]PL_P^_ NSLWWPYRP^ and diminishing market to operate and I believe we must have before any medical technology in,â€? says Dr Noel Moore of Histofrequent interactions to reNZX[LYd T^ YZ_ _SP ]P\`T]PO Index, Singapore. solve issues,â€? says Dr Rajesh Jain, joint managing direcregulatory approval to sell in a He further adds, “For our medical tor, Panacea Biotec, India. particular jurisdiction, but the related products, data from clinical clinical market size for the product Dr Amar Kureishi, headvalidation is essential for many aspects, including product develop_SL_ U`^_T P^ _SP NZ^_Wd ]PR`WL_Z]d Strategic Drug Development ment and marketing. However, as Asia, Quintiles, Singapore, approval process. a young start-up company based in says the challenge for Quin6LQJDSRUH LW LV GLIÂżFXOW WR DFKLHYH tiles would vary from country this in a cost- and time-effective manner. Conducting to country. “But generally, it would be to get the clinical these tasks in Singapore is more expensive than doing trial application process completed as soon as possible, them in other Asian cities, and the patient pool is also because in drug discovery timeline is everything. So, from smaller here.â€? D UHJXODWRU\ VWDQGSRLQW LW LV GLIÂżFXOW ZKHQ WKH SURFHVV LV not clear. Setting up the framework for quality is another Commenting on regulatory issues, Mr Rahul Dev of Tech issue. It would be nice if there were some expectations set Corp Legal LLP India says a major challenge in India is by a regulatory body for the investigators to follow which to have an effective mechanism for dealing with the gov- would help in enforcement of quality,â€? he adds. ernment, given its active responsibility in taking funding decisions, regulating healthcare services, and deciding As Mr Kamal Joshi from Venus Remedies, India, says, policy issues, including the most crucial ones regarding “There is need for implementation of harmonized regulaintellectual property rights. “In China, companies need to WRU\ IUDPHZRUN LQ $VLD 3DFLÂżF ´
Currency Fluctuation
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luctuation in currency value with respect to US dollar has resulted in many companies in Asian geographies showing a negative growth. (YHQ LQĂ€DWLRQ KDV D GLUHFW LPpact on the cost of living leading to attrition within an organization. For instance, according to Dr Bhuwnesh Agrawal of Roche Diagnostics India, “Rupee appreciation is generally helpful for industries which rely closely on imported inputs,
12
while depreciation of the rupee is welcome news for industries that are exporting majority of their products. Waiving off some duty component could be a way to overcome this chalOHQJH ´ +H DGGV WKDW LQĂ€DWLRQ KDV D direct impact on the cost of living leading to attrition within an organization. “It also has an impact on the cost of goods to our customers. As an organization, we have constantly been looking at ways of enhancing and improving the overall services and keepLQJ SULFH LQFUHDVHV LI DW DOO IDU EHORZ LQĂ€DWLRQ 7KH KLJK salary increases add to these issues,â€? he says.
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CoverStory
Partnering
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inding the perfect partners in the supply chain, marketing channels and co-development collaborations to ensure maximum speed and growth of product GHYHORSPHQW ¿QGLQJ WKH EHVW SDUWner for every activity locally in a small country such as Singapore DQG ÀHGJOLQJ UHODWLRQVKLSV EHWZHHQ universities and academic institutions with the biotech industry are few issues before the industry.
rate risks. For us, we found the optimal partners outside our home base and dedicated the resources to manage and drive those relationships. In the end, this actually saved us time and money and resulted in a better product development cycle,� he says. Considering the above facts, there needs to be better cooperation between the academia and the industry at the local level and also outside the country.
“Geographical remoteness can be a negative factor in the minds of potential partWorking with remote partners Âł2XU PDLQ FKDOOHQJH LV WR ÂżQG ners in the West who may succumb the right partners to take our to an unintentional ‘out of sight, out can put a strain on your of mind’ attitude,â€? says Dr Deborah compounds further into clinical resources and deadlines and trials. One can regulate the costs Rathjen of Bionomics, Australia. introduce cross-cultural issues in the pre-clinical development “However, advances in communicaof drugs. In the clinic, however, tions technology have broken down and exchange rate risks FRQWUROOLQJ FRVWV EHFRPH GLIÂżsome of these barriers. A global manager is now an expectation in Australian biotechnol- cult. That is why we are looking for partners. We need to have creative partnerships. Also government funding ogy companies.â€? is another interesting aspect that we might look into for 'U 1RHO 0RRUH RI +LVWR,QGH[ SRLQWV RXW WKH Ă€LS VLGH RI trials. In a drug discovery company, the last word is when being in a small state like Singapore. “One often struggles the research is translated into a product,â€? says Dr Suri WR ÂżQG WKH EHVW SDUWQHU ORFDOO\ IRU HYHU\ DFWLYLW\ 7KHUH LV Venkatchalam, CEO, Connexios Life Sciences, India. an emotional hurdle that must be overcome and the company management must realize that partners need not Dr Anna Lavelle of AusBiotech says there is a need to always be local. This is especially true if your product is bridge the gap between research and commercialization cutting-edge where local skills may not match. However, among the bioscience companies and to “educate these there should be an awareness that working with remote companies to become export-ready much before their partners can put a strain on your resources and dead- development cycle starts to establish links with global lines and introduce cross-cultural issues and exchange marketsâ€?.
Price sensitivity
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ontinuous drug price cuts will further squeeze margins for both multinational and domestic pharma. “The National Reform and Development Commission (NRDC), China’s pricing regulatory body, conducted three rounds of price cuts between March 2011 and March 2012.
7KH ÂżUVW FXWV ZHUH DSSOLHG WR antibiotics and antithrombotics, while the second round focused on hormone, endocrine, and central nervous system medicines. In the latest review, four categories of drugs are facing price cuts: immune-modulators, blood products, anti-neoplastics, and digestive system thera A CyberMedia Publication | www.BioSpectrumAsia.com | April 2012 | BioSpectrum
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CoverStory pies. Since the late 1990s, the Chinese pricing body has conducted 29 rounds of price cuts. While the reviews previously targeted only domestic manufacturers, these latest cuts included products from MNCs and joint ventures EHWZHHQ GRPHVWLF ¿UPV DQG 01&V 6XFK SURGXFWV XVHG WR EHQH¿W IURP D SULFH SUHPLXP RYHU GRPHVWLF JHQHULFV thanks to the independent price mechanism. However, this advantage was abolished in March 2011,� says Mr Ling Sun.
domestic industry. As a result of losing higher value sales in top tier markets in China, multinationals are likely to look at third and fourth tier markets to boost volume sales, increasing pressure on low-margin domestic players.
+RZHYHU WKLV LV HDVLHU VDLG WKDQ GRQH ,Q 3Âż]HU China, established a grassroots program to manage primary retail channels in small cities and counties. HowHYHU E\ WKH ODWH 3Âż]HU WHUPLQDWHG WKH SURJUDP DQG formed an alliance with local distributor, Jointown PharAs long as the Chinese Ministry of Health (MoH) remains maceuticals, to establish sales channels in county-level dedicated to reducing the prices of pharmaceuticals, hospitals (BioPortfolio 2011). Datamonitor believes that Datamonitor believes that the already-reduced margins while MNCs will continue to attempt to penetrate Tier III of both foreign and local drug makers will suffer further. and Tier IV markets, domestic drug makers will create 6XFK SULFH FXWV UHGXFH WKH SURÂżW PDUJLQV RI 01&V DQG VLJQLÂżFDQW EDUULHUV WKURXJK ORZ SULFLQJ DQG ORFDO JRYalso the commercial attractiveness of launching new ernment connections, particularly since these provinces have lower pharmaceutical budgets, making them more products in China. cost-sensitive than Tier I and II markets. Despite this, the volume of opportunity presented by the Chinese market will remain alluring to the pharma indus- Mr Kamal Joshi of Venus Remedies, India, believes, try. Although the current round of price cuts primarily “Policy should be so devised that quality of product is not target MNCs, the long-term implications will affect the compromised viz-a viz price.
Mid-size CROs
“
Virtually, the region has no or very limited true contract manufacturing. Some companies will offer contract work, but this is typically for spare capacity in a facility and does not offer a long-term solution,� says Dr Joseph Santangelo of Inviragen, Singapore.
challenge for smaller CROs active in the region is to deYHORS VXI¿FLHQW ORFDO NQRZ how in individual markets, while offering the kind of quality services that will be acceptable to all regulatory agencies worldwide.�
Large pools of patients, low For the CRO industry, the bigskilled labor costs, and supgest challenge will be to develop Some of the largest international portive government polia credible mid-sized offering to the industry. Currently, this does clinical research organizations are very cies have made the region a preferred destination for not exist. Some of the largest active in the region, but as compared pharma outsourcing and international clinical research _Z 9Z]_S ,XP]TNL LYO 0`]Z[P _SP]P manufacturing services. organizations are very active “As most CROs and conin the region, but as compared T^ YZ ]PLW XTO ^TePO .=: ZQQP]TYR tract manufacturing orgato North America and Europe, _S]Z`RSZ`_ _SP ,^TL ;LNT N ]PRTZY nizations are located in the there is no real mid-sized CRO RIIHULQJ WKURXJKRXW WKH $VLD 3DFLÂżF UHJLRQ 7KLV VHYHUHO\ more economically-developed areas, human resource limits the choices available to smaller drug developers in costs have risen dramatically in recent years. Mid- and SDUWLFXODU DV WKH\ ORRN WR EHQHÂżW IURP WKH UDSLGO\ JOREDO- senior-management already receive similar remuneraizing nature of clinical development and Asian participa- tion packages as their counterparts in developed countries, while the starting salary for graduate roles is also tion in these programs. growing,â€? adds Mr Ling Sun, analyst, with Datamonitor Mr Alek Safarian, CEO, Novotech, Australia, says, “In or- Healthcare, China. BS NARAYAN KULKARNI IN BANGALORE der for the industry to develop a mid-sized offering, the 14
BioSpectrum | April 2012 | www.BioSpectrumAsia.com | A CyberMedia Publication