Jane Wan is a freelance writer based in Singapore.

Jane Wan

	Indian pharmaceutical companies’ entry into the drug discovery and development field dates back to the early 1990s when India announced the signing of the World Trade Organization (WTO) agreement that introduced a product patent system from Jan. 1, 2005. Changes in the regulatory environment in the same year led to other developments with the emergence of the country as a favorite destination for “chemistry” outsourcing followed by “collaborative drug discovery as contract agencies where in-house strengths in chemistry of local companies was augmented with focus biology” (1). 
	
	Over the past few years, Indian pharmaceutical companies have been attempting to re-orientate their efforts toward developing new innovative medicines, Ang Wei Zheng, analyst of Business Monitor International (BMI) says. However, BMI maintains that the transition by Indian generic-drug makers will remain slow given the high risk levels associated with drug discovery. 

	Despite this, local companies made headway in this sector. In May 2012, Ranbaxy Laboratories launched Synriam (arterolane maleate plus piperaquine phosphate), a new drug for the treatment of uncomplicated Plasmodium falciparum malaria. Similarly, Cadila Healthcare launched Lipaglyn (saroglitazar) in June 2013, for the treatment of diabetes. Saroglitazar is claimed to be the first new chemical entity (NCE) discovered and developed by an Indian pharmaceutical company. 
	
	


	
	Recently, Indian companies such as Bugworks in Bengaluru and Vitas Pharma in Hyderabad have ventured into drug discovery. Ang says, “The move of Indian start-ups into the drug discovery space will present a new source of innovative medicines to the Indian pharmaceutical sector. However, we expect their impact to come primarily through collaborations.” 
	
	The Indian business environment will remain highly challenging for start-ups due to low levels of intellectual property protection, pricing uncertainties, and delays in receiving clinical trial approvals. In addition, venture capital and private equity have not been actively supporting such biopharmaceutical start-ups, leaving such companies to turn towards larger multinational pharmaceutical companies and domestic drug manufacturers for funding, he adds. According to a study into life-sciences venture capital published in 2013, only 32 out of a surveyed 170 biotechnology firms in India were backed by venture capital (2).
	
	


	
	Pharmaceutical companies operating in India face distinct challenges. Arvind Pachhapur, country head, intellectual property and science and legal business of India Thomson Reuters says, “They include insufficient innovation, limited access to high risk funding, short supply of skilled professionals, and specialized equipment.” 
	
	Low levels of intellectual protection continue to be a problem, Ang says. India registers a low score on BMI’s Pharmaceutical Risk/Reward Index (RRI)’s measure of Patent Respect (an index providing a globally comparative and numerically based assessment of a market’s attractiveness for innovative drug makers) compared to its Asian counterparts such as China and Indonesia (3). The low score is driven by the frequent threats to patents through compulsory licenses being revoked or rejected by the patent office. 

	Pachhapur says, “The clinical-trial segment also faces challenges such as regulatory uncertainty regarding conduct of trials, unethical practices, and approval delays.” It is estimated that it takes one year in India to gain regulatory approval of trials as compared with just 28 days in the United States. This is further compounded by regulatory uncertainty following the US Supreme Court’s ruling in 2013 to suspend 157 previously approved clinical trials, Ang adds.

	As a result, Indian pharmaceutical companies have begun to move their operations outside of the country, despite the potentially higher cost. Lupin Pharmaceuticals has set up two research and development plants in the United States while Cipla said in July 2014 that it will invest $150 million in the United Kingdom for research and clinical trials. Clinical trials in India declined from 264 in 2009 to 174 by 2013, according to ClinicalTrials.gov (4). 

	India’s pricing regulation continues to undergo significant changes that create high levels of uncertainty in launching new drugs, Ang says. In September 2014, the government rescinded guidelines issued the previous May that would have given the National Pharmaceutical Pricing Authority (NPPA) the power to set prices of non-essential medicines. In December 2014, however, the NPPA announced that it will bring an additional 52 new drugs under price control. Consequently, drug makers have cut back on the number of medicines launched; data from the Central Drugs Standard Control Organization highlights a decline from 270 in 2008 to 56 as of November 2014.
	
	


	
	Despite these challenges, industry players can still explore opportunities in the local business environment. Driving these prospects includes the country epidemiological transition with the burden of non-communicable diseases growing while the burden of communicable disease continues to decline, according to BMI’s Burden of Disease Database (BoDD) (5). In addition, drug-discovery companies in India are supported by a large pool of human resources with 14% of graduates in 2012 coming from science-related backgrounds. Furthermore, tertiary education remains strong, which drives the country’s score of 73.6 on BMI’s Operational Risk’s measure of Tertiary Education-above the Asia Pacific’s average (6).
	
	


	
	According to Pachhapur, the government has taken many initiatives in accordance with India’s Department of Pharmaceuticals Pharma Vision 2020 (7), which is designed to make India a hub for end-to-end drug manufacturing. He says, “To encourage greater participation from industry players, the government may want to consider dialog and collaboration between the government policy makers, senior leadership of Indian pharmaceutical industry and key opinion leaders from research institutes and academia on ways to better support novel drug discovery in India. The regulatory guidelines should be amended to encourage global pharmaceutical companies to not only continue outsourcing their research and development activities to Indian companies but also work on end-to-end solution starting from drug discovery to commercialization in India.
	
	“There is a need for speeding the regulatory processes at all stages of drug development starting from seeking licenses for initiating drug discovery, conducting clinical trials in India to obtaining regulatory approval for commercialization. Other areas to look into include speeding up the patent approval process and addressing issues such as the definition of patentability and compulsory licensing.” 

	Ang comments that the Indian government can look to the approaches adopted by other Asian governments. The Chinese government, for example, has abolished retail price caps and established a specialized court in November 2014 to handle intellectual property cases in Beijing. Japan’s move to set up the Japan Agency for Medical Research and Development (AMED) in April 2015 also represents another initiative to boost drug discovery.
	
	


	
	BMI remains optimistic with regard to India’s pharmaceutical industry. “The development of new drug discovery in India has the potential to improve the overall healthcare system in the country. The introduction of new medicines will help alleviate the burden of diseases as it provides greater access to innovative medicines through the clinical trials conducted in India. The growth of the local pharmaceutical research and development sector can serve as a key driver of economic growth, and this will help increase income levels and improve the access to healthcare services,“ Ang says.
	
	

Drug Discovery Research in India: Current State and Future Prospects

 (American Chemical Society, 2014), http://pubs.acs.org/doi/pdf/10.1021/ml500183c
	2. J. Chakma, S.M. Sammut, and A. Agrawal, 

, 31(3) (2013) pp. 195-201. 
	3. BMI, Pharmaceutical Risk/Reward Index, 2015.
	4. Clinicaltrials.gov, www.clinicaltrials.gov/, accessed Feb. 2, 2015. 
	5. BMI, Burden of Disease Database, 2015. 
	6. BMI, Operational Risk Index, 2015.
	7. Invest India, “Pharmaceuticals,” 

, www.investindia.gov.in/pharmaceuticals-sector, accessed Feb. 2., 2015.


	Vol. 39, Issue 4
	Pages: 24-26
	Citation: When referring to this article, please cite it as J. Wan, "Drug Discovery and Development in India," 

Articles

Hope abounds for local drug discovery companies despite challenges at home.

Drug Discovery and Development in India

	Japan’s pharmaceutical industry has been littered by a spate of drug scandals in recent years. In April 2014, Takeda Pharmaceutical was questioned for a clinical research Candesartan Antihypertensive Survival Evaluation in Japan (CASE-J) for its hypotensive drug Blopress (candesartan cilexetil) regarding possible data manipulation, conflict of interest, and appropriateness of the use of study results in promotions. Investigation by a third-party organization confirmed several instances of involvement by the company in statistical analysis of this “doctor-initiated research.”  Furthermore, inappropriate promotions of the study results were pointed out.
	
	In another case, a former Novartis employee embroiled in the Diovan (valsartan) scandal has been arrested. Japan’s Ministry of Health, Labor and Welfare (MHLW) has also filed a criminal complaint against the company. A fine of $18,710 for exaggerated advertising is also highly likely to be levied against Novartis. Furthermore, the company’s recent scandal involving a failure to report the side effects of its leukemia drugs Tasigna (nilotinib) and Gleevec (imatinib) could earn more than a rebuke by the MHLW to clean up its act.  
	
	


	
	Clinical trials have been decreasing in Japan over the past few years, falling from a peak of 375 in 2011 to 337 in 2013 according to ClinicalTrials.gov (1). This decline, however, is set to change as the country liberalizes its clinical research regulations in three key ways, according to Ang Wei Zheng, a pharmaceuticals and healthcare analyst at Business Monitor International (BMI).
	
	Firstly, Japan is looking to relax rules that require new drug applications from outside the country to have clinical trials that use a sufficiently large number of Japanese citizens. Secondly, Japan has created new tracks for clinical research in a bid to accelerate the development of its pharmaceutical industry especially in stem cell research as echoed in its Act on Pharmaceuticals and Medical Devices (PMD), which passed in 2013. This legislation creates a separate expedited approval system for regenerative medicines where a provisional approval can be obtained after a single clinical trial as long as there is confirmed evidence of effectiveness. Thirdly, Japan has been a step ahead of the US by delineating a biosimilars regulatory pathway in 2007.
	In reforming this system, Japan is following the example of European countries that face similar challenges. France, for example, requires companies to declare their links with students, associations, establishments, and the specialist press. In addition, companies have to declare all benefits provided to doctors and others. To control aggressive advertising, France also requires promotional materials to gain approval before use.
	
	


	
	The string of drug scandals in Japan may change the relationship between drug manufacturers, doctors, and research institutions.  Ang says, “We expect more scrutiny that will result in a more cautious relationship between parties involved. Eventually, this one-to-one relationship will involve more parties, including regulators, who are keen to avoid a repeat of the scandals. However, we do not expect this relationship to cease due to its symbiotic nature as research institutions require funding and drug manufacturers stand to benefit from an accelerated drug development process with these links.”
	
	The government has adopted a proactive role to deal with the situation. On Jan. 8, 2014, MHLW sent a “Notice to comply with ethical guidelines for clinical research and epidemiologic research” to all research institutions in Japan. The Ministry of Education, Culture, Sports, Science, and Technology, which has governance over national universities, revised its guidelines for research activity misconduct measurement and reinforced the measures against research institutions.

	The Japan Pharmaceutical Manufacturers Association (JPMA) issued a transparency guideline which required its members to disclose the following: fees for research and development, fees for grants for academic research, fees for writing manuscripts, fees for provision of information (e.g., speaker fee, honorarium), and other fees (e.g., entertainment). By February 2014, all 70 member companies of JPMA disclosed their own transparency policies.

	Naoya Takuma, healthcare, pharmaceuticals, and life sciences lead of PricewaterhouseCoopers (PwC) Japan says, “An effective reform needs to have two components. New regulations, incentives/penalties, and government oversight over the conduct of clinical research have to be put in place. Another is to have pharmaceutical companies put in place a more robust risk and compliance governance system.”
	
	

Increasing transparency of work practices


	
	When discussing transparency, Takuma adds, “All pharmaceutical companies, both domestic and foreign, realize now that the transparency of clinical research sponsored by pharmaceutical companies will be under close scrutiny, and that they will be required more than before to disclose not only the outcome of the research but also other factors such as planning and process of research.”
	
	Internal measures to prevent recurrences include strengthening of the compliance system, adding new members to review materials from both a legal and medical perspective, strengthening the system for the screening and evaluation of donations and implementing information technology support for hardwiring, and monitoring payment approvals and payments to healthcare professionals. In recent years, some companies have also introduced the Medical Affairs function with Medical Science Liaisons to manage Key Opinion Leaders and to support their clinical research activities independently of the sales and marketing function.
	
	


	
	Japan will continue to remain a key player in the pharmaceutical industry despite the drug scandals. Ang says, “The government will not impose overly onerous regulations that will derail the promotion of Japanese clinical research. From a domestic standpoint, the pharmaceutical industry remains a cornerstone for future growth in the country with regenerative medicine showing strong promise to drive the economy and meet the needs of its ageing population. It is thus unlikely that the government will risk stifling this industry and measures will always be weighed against the goal of making Japan a pharmaceutical research and development hub.”  
	
	Globally, Japan remains the second largest market in the world with pharmaceutical sales at $112.6 billion in 2013 (2). The country also ranks highly on BMI’s Risk/Reward Index for strong patent respect and political stability (3). This ranking maintains Japan as a highly attractive market for pharmaceutical companies that are looking to launch innovative drugs in the market. Moreover, the bold steps taken by the country in the field of regenerative medicine will help Japan maintain its premier position regionally against rivals like South Korea.
	
	

, accessed Oct. 14, 2014.
	2. BMI, Pharmaceutical Sales 2014.
	3. BMI, Risk/Reward Index 2014. 

 When referring to this article, please cite it as J. Wan, "Drug Scandals Impact Industry in Japan," 

The spate of drug scandals may alter the relationship between manufacturers and research institutions, and reshape Japan’s clinical research industry.

Drug Scandals Impact Industry in Japan

Though the Bruneian pharmaceutical sector is at its infancy, it possesses huge potential for growth and development. According to Business Monitor International (BMI), the sector is valued at US$100 million in 2013 with a compound annual growth rate (CAGR) of 9% between 2013 and 2018, reaching a value of US$150 million by 2018.  

The country is located in a region with great biodiversity, which offers an excellent platform for the exploitation of rich sources of medicinal plants and other useful forest products. Though this has attracted the attention of international scientists, more efforts will have to be put into inviting experts to the country and conducting more studies in collaboration with universities and relevant departments to explore what is out there and how they can be used to the industry’s advantage, Jason Paul Bin Rumpun, key accounts manager of Simpor Pharma says.


In addition, the country is also tapping into the growing halal market. In 2010, the Ministry of Religious Affairs issued the guidelines for the manufacturing and handling of halal medicinal products, thus setting the stage for the establishment of halal pharmaceutical companies in the country, and Brunei to be the hub for halal pharmaceutical exports, Cher Boon Piang, analyst of BMI Asia says.  

In October 2013, Simpor Pharma was established after acquiring the full halal certification from the government. In a $26 million joint venture between Canadian-based Viva Pharmaceutical and private equity fund Aureos (Brunei) Capital, Brunei’s first drug manufacturing plant produced 25 million Syariah-compliant capsules for exports by February 2014, aiming to ship them in three to five months. 

Rumpun adds, “The halal brand will gain strong acceptance amongst the Muslim community be it in Europe, Africa, or America. Hopefully, the Bruneians will take advantage of this opportunity to expand and reach out to the global market.” This is echoed by Edward Ko, managing director of Simpor Pharma, who commented that halal sales are strong and growing in countries such as Azerbaijan, Iran, Yemen, and United Arab Emirates (UAE).


  The government has identified the sultanate’s rich biodiversity and educated workforce as means for attracting overseas investors to partner in specific projects and use Brunei as a strategic location for supporting their regional expansion plans, Abhijit Ghosh, pharmaceutical and healthcare leader of PricewaterhouseCoopers (PwC) Singapore says. Recognized as the world’s most stable macroeconomy by the World Economic Forum (GCI 2010/11), Brunei possesses ‘pull’ factors such as political stability and low corporate income tax. The corporate income tax rate has been reduced to the current rate of 22% compared to 30% in 2008. There are no personal income tax, as well as export, sale, payroll, and manufacturing taxes (1).

Ghosh adds, “The country offers research and development (R&D) and training grants, as well as tax incentives and exemption from import duties on raw materials and machinery for qualifying projects.” Currently, Japanese-based National Institute of Technology and Evaluation (NITE) and Bruneian scientists are researching the possibilities of using microbes for pharmaceutical purposes. Germany is also exploring the idea of partnering with the country for developing pharmaceutical products culled from the Sultanate’s diverse plant field. China is also looking to partner with Brunei for the supply of raw ingredients for Chinese traditional medicines.

However, Brunei will need to improve on areas including starting a business, enforcing contracts, and property registration. Based on the World’s Bank Doing Business Report 2014, the country was ranked 59 out of 189 countries and behind neighboring countries Singapore (first), Malaysia (sixth), and Thailand (18th) (2). Bureaucratic red tape is one of the issues for companies. For example, it took Viva Pharmaceutical six years to build its facilities due to bureaucratic slowdowns. The country also does not possess high quality infrastructure to facilitate the expansion of manufacturing facilities, Ko says.
  
  


  Ghosh shares a similar view that the lack of adequate infrastructure facilities for R&D and manufacturing could be stumbling blocks for the Bruneian pharmaceutical industry. He says, “Given the shortage of a skilled workforce, the government should start investing on training facilities for developing pharmaceutical experts and biotech researchers if it wants to succeed in the industry. It should also place its emphasis on liberalizing its policies to eliminate certain red tape and make it easier to do business in Brunei.” The country may want to explore the idea of seeking help from established neighbors such as Singapore to develop its infrastructure and move up the value chain to develop its pharmaceutical sector.   

Rumpun maintains a positive outlook for the Bruneian pharmaceutical industry. “Though Brunei is still in the experimental stages of manufacturing, the government has been willing to review and streamline existing processes to make it easier for companies to do business. Once the processes and systems are in place, there is a market for more companies to open manufacturing facility in the country. Moreover, the government is on a constant lookout for potential foreign direct investment that is essential to bring about development,” he says.

, The World Bank,  accessed May 9, 2014. 
  
  


  Jane Wan is a freelance writer based in Singapore.

Brunei harnesses its rich biodiversity and the growing halal market in a bid to develop its pharmaceutical sector.

Brunei's Potential Pharmaceutical Market Growth

In July 2013, four Chinese executives from GlaxoSmithKline (GSK) were arrested by the Chinese government for offering up to $534.5 million in bribes to doctors and officials in a move to secure higher prices and market share. Subsequently, other companies such as Bayer, Baxter, and Novartis have also been on the radar of the Chinese government as it extended its probe. Local companies including Sino Biopharmaceutical and Gan & Lee Pharmaceutical have not been spared either.

China’s healthcare spending is poised to grow from $357 billion in 2011 to $1 trillion by 2020, according to a McKinsey & Company report (1). China is an attractive destination for multinational companies and is considered by many industry players as one of the top three markets in total revenue contribution. Looking ahead, China’s healthcare market is likely to be shaped by continued economic and demographic development, further healthcare reform and the direction of the twelfth five-year plan.


Looking back, the execution of Zheng Xiaoyu, former director of the China State FDA, for accepting over $1 million in exchange for influencing drug approvals, set the momentum for better regulation and enforcement. Over the past six months, Chinese President Xi Jinping has become increasingly vocal in championing compliance reform. 

Most recently, China’s National Health and Family Planning Commission (NHFPC) has enacted a stringent “blacklisting” system for those violating anti-bribery rules that will take effect on March 1, 2014. Violators will be banned from bidding in public hospitals and government-aided healthcare facilities (GAHFs) in the province where the offence occurred. The most compelling aspect of the planned move is that first-offender blacklisted companies or sales agents will be banned at the provincial level from bidding for contracts from public hospitals and GAHFs for two years within the province where the confirmed bribery took place. Last December, the authorities also issued warnings to doctors against accepting bribes from companies. 

Aaron Zhong, senior consultant healthcare practice of Frost & Sullivan China, says, “The ongoing bribery cases have great impact on the industry. Multinational companies are stepping up efforts to tackle corruption in the China market. These companies are expected to tighten control on fees and expenditures, strengthen training for sales staff, and be more legally compliant. They have to ensure that their activities do not breach China market business rules while also staying in line with China laws and international practices.” Profit margins of pharmaceutical companies also took a hit as a result of the government’s move. Anecdotal evidence suggested that overall growth rates for overseas drug firms has tapered down to approximately 8-10% from some 20%, a distributer working with foreign drug manufacturers in China says.


Ian Wilcox, global director of Hay Group Life Sciences adds, “Many of the customary ways the Chinese and other emerging market countries have done business in the past no longer work for them in the increasingly global market place, but these practices are hard to shake. The challenge here is to find ways to effectively combat these practices with a combination of comprehensive, yet enforceable regulations that strike a balance between multinational and local interests—and, most importantly protect the well-being of the Chinese citizenry.”

For example, certain underlying social conditions such as low pay for physicians and others in the health science field, create an environment ripe for corruption. Physicians are ‘laying low’ as a result of recent events with many refusing to meet pharmaceutical representatives. If this persists, it is likely that more scandals relating to physicians’ poor economic circumstances will surface, Wilcox says.

Companies must take compliance issues seriously and  implement appropriate actions to fit the changed environment. Wilcox says, “They must maintain conforming internal policies, hire those people in key roles who are equipped and rewarded to follow these policies, and ensure that those who do not to be removed from authority. People must be taught how to manage themselves and their people in a way that creates a ‘compliant culture’—one that operates within the spirit and the letter of the law.” 

For example, GSK has acted swiftly by changing the way it pays staff in China. It also did away with rewarding individual sales targets for commercial employees and bonuses linked to the use of its medicines by prescribers visited by sales representatives promoting its drugs.

Looking ahead, we are likely to see more regulation and enforcement, Wilcox says. More importantly, there is a need to ensure consistency and clarity. In the end, China’s interests are served if it can strike a delicate balance between attracting global life sciences players, while at the same time nurturing its domestic development. The country will likely remain a strong market for multinational life sciences companies. But, there is too much complexity, a history of inconsistent policies, and a strong culture of self-protection that will make it hard for outsiders to venture. 

Healthcare in China: Entering promising and ‘uncharted’ water


Jane Wan is a freelance writer based in Singapore. 

China's regulatory and compliance environment is set to change as the government declares a crackdown on bribery scandals.

Regulators Get Tough on Corruption in China

The rising cost of drug development and the decreasing proportion of drug-naive population in the US and European markets are driving international pharmaceutical companies to consider emerging markets as a location to conduct their clinical trials. This shift in focus is also largely due to the notable clinical development in these markets and the potential for enhanced revenue growth. Asia stands out among the emerging markets given its double-digit growth rates (1). According to ClinicalTrials.gov, the number of clinical trials conducted in the US declined from 5159 in 2009 to 4530 in 2012 while the number of clinical trials increased from 1297 to 1614 for developed Asia Pacific (APAC) nations, and from 1196 to 1458 in developing APAC (2).


  The fragmented APAC region, however, raises challenges for players operating within the region because there is no harmonized set of clinical trial regulations to adhere to, noted Cher Boon Piang, pharmaceutical and healthcare analyst at Business Monitor International (BMI) Asia. Some countries require clinical trials to be conducted within their boundaries. For example, Vietnam requires firms to conduct domestic clinical trials before marketing approval “for all pharmaceuticals that have not been made available in their country of origin for more than five years” (3). This requirement is also applicable to “new variations of pharmaceutical products already registered in Vietnam.” The same prerequisite is adopted in countries such as China, Japan, and South Korea, which could potentially cause delays and affect revenue-generating opportunities. Other challenges include delays in approvals and language barrier, Cher told 

 In November 2012, CEO of Eli Lilly, John Lechleiter, stated that approval for clinical trials would take 12 to 18 months in China, in contrast to several weeks in the US. Medpace director of clinical operations, Mainfong Ang, commented that start-up of clinical trials may take up to 96 weeks in China compared to 24 weeks in South Korea. All trial applications in China must be written in standard Chinese. In South Korea, the National Health Information System is mainly written in Hangul, and an interpreter is required if the study monitor cannot understand the local language. As a result, there has been a growth of contract research organizations (CROs) in the region. 

“Globalization of trials is an essential prerequisite in drug development to test drug efficacy and safety across different ethnic groups, climatic conditions, and other notable external factors. This criterion encourages outsourcing of research and clinical testing due to the wide global presence of large CROs against in-house R&D resources,” commented Rhenu Bhuller, senior vice-president, healthcare, Frost & Sullivan. In October 2013, UK-based CRO TranScrip Partners opened an office in Hong Kong in a move to consolidate their presence in APAC while Australia-based CRO Novotech established two new clinical research sites in Hong Kong and Philippines in July 2013.
  
It is apparent that the government’s involvement is imperative to develop and/or improve the clinical-trials sector. “Governments should ensure sufficient provision of skilled scientists, researchers, and world-class research institutes; drive industry, academia, and small medium enterprises partnerships; and provide a strong healthcare-technology clusters of businesses, universities, and venture capitalists,” said Bhuller. “In addition, there should be efficient regulation of the clinical research environment, which facilitates setting up and smooth running of local clinical trials and provides for R&D tax credits among others.”

Progress is more pronounced in developed countries such as Korea and Singapore. In July 2013, the Health Ministry in Korea announced that it will commit $8.9 billion on projects to develop 20 new drugs over the next five years with private domestic drug manufacturers. It has also established a $448-million fund to assist local firms to expand their global presence. On Sept. 1, 2012, Singapore launched its clinical-trials registry that provides an option for patients not responding to existing treatment. Patients who opt to undergo these trials pay little or nothing for these treatments. 

The success of the clinical-trials sector is dependent on many factors. “These include the cost of conducting the trial, government regulations, the importance of the biomedical sector, innovation levels, and the respect for intellectual property of the country,” commented Cher. “Innovation influences the clinical-trials sector in many ways. We note that countries with reasonably high standards of innovation (e.g., countries that develop innovative drugs) contribute to the vitality of the clinical-trials sector. Generally, knowledge-based economies are more innovative in product development or other business solutions.”


BMI has a positive outlook of clinical-trials sector in APAC due to the efforts of the respective governments to provide better healthcare and the strong state support for pharmaceuticals and biotechnology investments. According to Cher, “the continual improvements in regulation help to improve business environment that will attract pharmaceutical firms and healthcare providers to invest in the region.”

Frost & Sullivan shares an upbeat perspective of the clinical-trials industry in Asia. Global pharmaceutical companies are looking to relocate their R&D activities to more attractive geographies such as China, India, Korea, and Singapore that offer significant expertise as well as the potential to reduce R&D cost and development time, Bhuller commented. One benefit is the rapid patient enrollment for clinical studies although recruitment is now becoming more difficult because of more stringent trial requirements and the volume of trials and advancement in treatment, thereby, leaving less treatment-naive patients in the pool. Companies are finding that they have to go to smaller cities to get patients for their trials. Other benefits include accelerated product launches by tapping into large, diverse, and treatment-naive patient pools; capitalizing on the local intellectual capital, talent pool, and innovation potential; early access to emerging markets; all of which support the growth of companies in Asian economies.

Governments in APAC are embracing these opportunities and are offering incentives and infrastructure to attract companies to undertake R&D, leading to an increase in the number of pharmaceutical R&D centers in Asia Pacific. As more companies begin to concentrate in China, Japan, India, and Singapore, we will likely see a more balanced industry rather than a US/EU-dominated one.  

 5 (3) 20-23 (2013).
  2.	National Institutes of Health, ClinicalTrials.gov website, 

, accessed Nov 4, 2013. 
  3.	Pharmaceutical Research and Manufacturers of America (PhRMA), 

—Jane Wan is a freelance writer based in Singapore. 

The rising cost of drug development and the decreasing proportion of drug-naive population in the US and European markets are driving international pharmaceutical companies to consider emerging markets as a location to conduct their clinical trials. Asia stands out among the emerging markets given its double-digit growth rates.

Clinical Trials Head East to Asia

International pharmaceutical companies are flocking into Myanmar to explore business opportunities in the country. Myanmar’s pharmaceutical market has attracted investors with the sector projected to be worth $100 to $120 million despite its relatively small population of approximately 60 million people. “The country’s pharmaceutical industry is fuelled by the growing per capita income and a middle class that is seeking better healthcare,” Chris Woo, managing director of tax services at PricewaterhouseCoopers (PwC) Myanmar, told 

. “Currently, many employers do not provide any health plans for its employees; however, the healthcare landscape and relevant demand are set to change as more international investors hire locals and establish international standards in the country.”

The advances made by Indian companies in Myanmar have also prompted foreign players to look into the potential investment opportunities in the country. Indian companies constitute 35% to 40% of the market followed by companies from Bangladesh, China, Indonesia, Pakistan, Thailand, and Vietnam. “Given that the per capita pharmaceuticals expenditure is still rather low, generic and over-the-counter drug companies will stand to benefit more in the short to medium term,” commented Abhijit Ghosh, healthcare and pharmaceutical leader at PwC Singapore, in an interview with 

. “This is why many Indian pharmaceutical companies such as Ranbaxy Laboratories and Cipla continue to play a dominant role in the Burmese market.”

In 1993, Haryana-based Ranbaxy Laboratories set up business in Myanmar after receiving its first drug approval from the local Food and Drug Administration (FDA). The company then went on to establish a branch office in 1997 with more than 175 approvals to date. Recently, Mumbai-based Sun Pharmaceutical Industries showed interest in investing in Myanmar. Plans to open a branch office are already in the pipeline. The company has obtained approval to expand its pharmaceutical services and is in discussion with the Directorate of Investment and Companies Administration (DICA) officials on the required legislations and regulations.



  Myanmar’s healthcare system lacks funding and is primarily a self-pay system. Consequently, the market favors Indian manufacturers who can offer lower-priced options compared to players from developed countries. Potential investors should, therefore, plan their market-entry strategies carefully, according to Ghosh. “They should examine the option of partnering with local players, investing in the development of local sales force and launching product portfolios that offer incentives for purchases across its portfolios.” 
  
Ghosh added, “At this stage, the country is facing uncertainties relating to the political landscape especially with rising ethnic tensions, changes in regulations and the need for greater infrastructure improvement. Therefore, it is advisable for international companies planning to penetrate the Burmese market to collaborate with a local partner, particularly in the area of distribution.” International industry players should also consider investing in manufacturing plants in Myanmar and hiring or developing a local support team to further their business interest. Such plans will better position companies to take advantage of the expected future economic growth in Myanmar.

The good news is that the Burmese government is introducing reforms to improve the healthcare sector. It is reallocating budgets to an expanded national pharmaceutical formulary, according to Varun Sethi, general manager of the Business Unit Healthcare at Diethelm Keller Siber Hegner (DKSH) Myanmar. DKSH has been operating in Myanmar for more than 15 years and is one of the country’s most comprehensive distribution infrastructures for pharmaceuticals, over-the-counter products, and medical devices. The company currently employs more than 550 employees in its business unit. The 2013 government budget has set aside $450 million in healthcare spending whereby a large portion would be allocated to pharmaceuticals as part of the plan to make available the expanded national formulary to public hospitals. Plans have been announced to increase spending on pharmaceuticals from $0.20 per person per annum to $2 per person per annum in the next two years. If this proposal materializes, pharmaceuticals will account for approximately $125 million, which represents 27.4% of the 2012-2013 healthcare budget (1). Part of the budget will also go towards increasing the number of doctors from local medical schools. Other initiatives by the government include reorganizing and strengthening Myanmar’s FDA workforce to build additional capabilities in the area of drug registration. 


Moving forward, Myanmar’s pharmaceuticals sector is projected to double from $430 million in 2012 to $660 million by 2015 with the likelihood that branded products will gain popularity over the next two years (2). “However, the marketplace will remain highly fragmented at both wholesale and pharmacy levels coupled with challenges in compliance and infrastructure. Therefore, the selection of a trusted market-expansion services partner that knows the local market is essential. There are plans to increase the number of drugs as part of the government’s sponsored healthcare scheme but implementation is still in its early stages,” said Sethi. 

Industry players have expressed mixed feelings about the future of Myanmar’s pharmaceutical sector. “While some are hopeful of the future, others harbor cynicism about the willingness of the past government who remain in the current political hierarchy to embrace meaningful reforms that would drive further investment into the country’s infrastructure, healthcare, and education systems,” remarked Ghosh. “The government, therefore, needs to embrace a policy of greater transparency, make additional investments in infrastructure to help improve connectivity, and facilitate further reforms that will directly benefit people across this country.” 

Healthcare in Myanmar 2013—Myanmar  Pharmaceutical Market & Devices Market Survey Report

,”  accessed Sept. 9, 2013.
2. Business Monitor International, “

Myanmar Pharmaceuticals and Healthcare Report Q3 2013

Foreign companies zero in on Myanmar with the hope of securing a foothold in its pharmaceutical market.