An Executive Country Review: South East Asia An ... - EC Reviews

An An Executive Country Review: 

South Southeast East Asia 

Indonesia, Malaysia, Singapore, Philippines, and Thailand 

Pharmaceutical Technology SEPTEMBER 2006 69

Healthy Contrasts: 

A Look at Markets and Health 

Systems Across the ASEAN Region 

Southeast Asia strikes the visitor as 

diverse and fascinating. In the 

shadows of the global giants 

China and India, 500 million people 

now thrive across a multitude of nations—ranging 

from very large to tiny citystates, 

scattered over mainland and 

archipelagos—impressing the first-comer 

with unrivaled cultural wealth and diversity. 

From regional human powerhouses like 

Indonesia—the most populous country of 

Southeast Asia and the world’s fourthlargest,—to 

the island city of Singapore, 

the region is a patchwork of languages, 

cultures, and environments. 

A sweeping financial collapse across the 

region reshuffled the cards in 1997–1998. 

Moving from “the Asian Miracle” to a 

post-crisis situation, most of the region’s 

countries displayed resilience and optimism 

and hit the growth road again. Almost 

10 years later, the scars still show, 

but Southeast Asian nations have addressed 

some of the structural weaknesses 

that made the 1997–98 meltdown possible, 

and have strengthened their 

economies. Life science is one keystone of 

the recovery. 

Across the region, from Indonesia to 

Malaysia and Singapore, and from the 

Philippines to Thailand, local players have 

expanded in their domestic markets, using 

This report was prepared by Executive 

Country Reviews. 

Authors are Gilles Valentin 

(gilles@ecreviews.com), Emmanuelle 

Berthemet (emma@ecreviews.com), 

Marco Parigi (marco@ecreviews.com), 

and Amicie de Bodinat 

(amicie@ecreviews.com). 

state support and market protection to 

take full advantage of sizeable home turfs. 

Many have become serious regional contenders 

with ambitions stretching across 

Southeast Asia and beyond. 

Sorting through inequalities 

Indonesia is the region’s most populous 

country and its economic leader, with 

$865.6 billion (2005 est.) GDP (Purchasing 

Power Parity) and 224 million people. 

Thailand follows with 64 million people 

sharing an estimated $560.7 billion (2005 

PPP). These two countries lead the way 

despite having been very adversely affected 

by the financial crisis. Behind them comes 

the Philippines, with 89 million inhabitants 

and $451 billion in estimated 2005 

GDP. 

The development star of the region is 

Malaysia, which—with 24 million people 

and $290 billion of GDP (2005 estimate)— 

also benefits from a solid growth, excellent 

infrastructure, and a stable political life. 

Singapore shares these strengths, but has a 

much smaller population and less economic 

clout with 4 million Singaporeans 

and Singapore $124.3 billion (US $78.9 

billion) at Purchasing Power Parity (2005 

estimate). Yet, the city-nation is also recognized 

as the key financial and service center 

of the region and is often the destination 

of choice for regional headquarters of 

global corporations. 

The region’s pharmaceutical industries 

are equally diverse and reflect their countries’ 

histories, development paths, and social 

conditions. While Indonesia, the 

Philippines, and Thailand have benefited 

from state protection and patronage when 

70 Pharmaceutical Technology SEPTEMBER 2006 www.pharmtech.com

uilding a local industry, Singapore has 

striven to attract foreign players, offering 

investment incentives and granting market 

access in return for manufacturing plants, 

research labs and regional marketing offices. 

Meanwhile, Malaysia has mixed both 

approaches, helping to create a national 

champion through monopolistic positions 

while allowing local private players to 

thrive and keeping the door opened to foreign 

players. 

Public health can also differ rather dramatically 

from one country to another: 

rural Philippines rank low in the United 

Nations Development Program (UNDP) 

Human Development index (84th out of 

177); less than 30% of its population benefits 

from regular access to essential drugs. 

In Indonesia, more than 52% of the popu- 

lation lived on less than $2 per day for the 

period 1990–2002. The country spent 

$113 per capita on healthcare in 2003 (according 

UNDP/WHO figures). In the 

same time, Singapore has developed as a 

worldwide medical center of excellence 

and records some of the highest per-capita 

medical expenditures in the world at 

$1156 (WHO, 2003). Thailand and 

Malaysia take the middle ground, with 

healthcare spending at $260 per capita for 

Thailand, $374 for Malaysia. Estimated 

healthcare spending is expected to grow 

strongly in the region over the next 5 

years. 

The US spends 15% of its gross domes- 

tic product (GDP) on healthcare, with 

spending growing by about 5% per year; 

the EU spends 9.2% of GDP, increasing by 

about 4.1% annually (according to 2005 

figures from The Economist Intelligence 

Unit), Indonesia spends just 3.1%—but is 

expected to grow at a steady 14.1% per 

year from 2005 to 2010. The picture for 

the Philippines is similar, with current 

spending of 3.2% expected to grow at 

13.4% annually. Thailand devotes 3.3% of 

its GDP to healthcare and expects to grow 

by 10.8% annually. Malaysia spends 3.8% 

of its GDP on healthcare, and shows solid 

growth projections at 11.3%. Singapore 

leads the region, spending 4.5% of its GDP 

in healthcare, but it will grow at just 8% 

per year. 

The overall market size of the Southeast 

Asia region totals $7 billion, with a 

projected compound 

annual growth rate 

of about 13% 

through 2010. 

Healthy market prospects 

The overall regional market size (including 

countries not surveyed in this review such 

as Vietnam, Myanmar, Cambodia, Laos, 

and Brunei Darussalam) totals $7 billion, 

with a projected compound annual 

growth rate (CAGR) of about 13% 

through 2010 (source IMS Health 2005). 

Again, Indonesia heads the list, with a $2.2 

billion market growing 12% per year over 

the next 5 years. Thailand comes in second, 

at $1.5 billion, but its growth rate is 

should be just shy of 16% over the next 5 

years. The Philippine market is estimated 

at $1.4 billion, with a CAGR of 9%. The 

Singaporean market is $350-400 million 

with a 10% CAGR. And the Malaysian 

market is worth more than $500 million, 

matching Thailand’s 16% growth rate. 

Despite these attractive figures, and the 

very large populations, the markets of the 

Association of Southeast Asian Nations 

(ASEAN, www.aseansec.org) pose certain 

challenges for foreign manufacturers: Not 

only do individual markets vary greatly in 

size, but they are also organized in sometimes 

radically different ways. 

Indonesia, a shaky giant 

In Indonesia, the specter of avian influenza 

and the strain on medical services 

following the devastating December 2004 

tsunami and the June 2006 earthquake in 

central Java have underscored the limited 

means of the country’s public hospitals 

and the critically under-funded health 

sector. The only social security scheme is 

open only to employees of the government 

or companies with more than 10 

workers. Prescription drugs are distributed 

through either pharmacies or hospitals, 

while OTC products are distributed 

through 2.5 million outlets across Indonesia, 

from drugstores to supermarkets. 

Physicians do not dispense medications 

directly to the patients (unlike the practice 

in Malaysia and Singapore). Many 

players in the region describe market access 

as “difficult,” for a number of reasons: 

registering drug products isn’t easy, and 

despite recent attempts by the National 

Agency of Drug and Food Control (NA- 

DFC) to simplify its procedures, delays 

still run 100–150 business days for a 

generic product registration and 300 business 

days for a New Chemical Entity 

(NCE). According to Indonesian professionals, 

delays can run even longer. 

Thailand, the price of populism 

Following the election of Prime Minister 

Thaksin Shinawatra, Thailand started implementing 

a program of “universal coverage,” 

allowing its citizens to obtain a med- 


The new pharmaceutical law in Thailand is 

expected to drive many smaller retailers 

out of business and to rationalize the way 

drugs are sold in the country. 

ical consultation, prescription, and medicine 

for a mere 30 Thai baht ($0.80). The 

policy, besides severely straining public 

health and hospitals budgets, also increased 

the market size, albeit mainly benefiting 

cheap prescription drugs. 

As a dispensary market, hospitals are 

central in the Thai system and account for 

over 65% of drug sales, followed by health 

centers, where patients can consult general 

practitioners and specialists and be 

prescribed drugs at the unit level. These 

centers account for 5% of pharmaceutical 

sales. Private pharmacies sell the remaining 

30%. It is worth noting that most 

drugs are freely available; even many antibiotics 

can be purchased without a 

prescription. 

Public hospitals (which account for 

80% of the total hospital drug sales) purchase 

drugs by public tenders, where the 

main criterion is product price. Medicine 

purchased in these tenders must meet criteria 

established by the National Essential 

Drug List, established in 1999 by Thailand’s 

Food and Drug Administration. 

A new pharmaceutical law is in the 

works and should further change the 

shape of the Thai health sector. The law 

would require a qualified pharmacist in 

drug retail outlets and would broaden requirements 

for prescriptions. The new 

rules are expected to drive many smaller 

retailers out of business and rationalize the 

way drugs are sold in the country. In the 

meantime, the plan by Thai authorities to 

turn the country into a regional health 

tourism center should further strengthen 

sales of higher-value and life-style drugs in 

the country. 

Malaysia: reforms at work 

The Malaysian social security system has 

been evolving and adapting to new realities: 

The membership base includes 

540,000 employers and over 10 million 

employees, with contributions of well over 

$300 million per year. The system is still 

evolving away from a collection of employer 

liability schemes, provident funds, 

and social insurance. Until the beginning 

of this decade, the scope of the coverage 

was limited to the formal sector and that 

too limited by wage ceilings. A large proportion 

of the economically active population—the 

self-employed farmers and fishermen—was 

excluded from the coverage. 

Protection for senior citizens was also 

found to be inadequate. 

A wide array of reforms have therefore 

been discussed and their implementation 

is on the way: designing a social security 

scheme for the self-employed and projections 

for a social insurance-based retirement 

pension scheme are in the works. 

Legislators are also considering expanding 

the social security system to include pregnant 

women and extending coverage for 

illness. 

The Philippines: reforming 

the retailer’s paradise 

The Philippine pharma market is something 

of an anomaly: while the country 

lags on social service and reform, retail 

drug prices are amongst the highest in the 

region. For example, GlaxoSmithKline’s 

Ventolin sells for 331.50 Philippines Pesos 

(PhP)—or about $6.44—in the country; 

the same inhaler sells for $2.40 in India 

and $1.21 in Pakistan. A tablet of Novartis’s 

Voltaren sells for PhP 18 ($0.35) in 

The Philippines, against $0.02 PhP in 

India and $0.07 in Pakistan. Therefore, the 


price issue is one of the elements of reform 

encompassed in the Medium Term 

Philippine Development Plan 2005–2010. 

The scheme would also expand a universal 

health insurance plan, which currently 

covers 44.9% of the population. The program 

is managed by PhilHealth, which assumed 

responsibility for administering the 

former Medicare program for government 

and private sector employees following the 

program’s landmark transfers from the 

Government Service Insurance System 

(October 1997) and its Social 

Security System (April 

1998). 

Meanwhile, another initiative 

aims to make 44 of 

the most commonly used 

medicines available across 

the archipelago in retail 

outlets managed by PITC, 

the Philippine International 

Trading Corporation. 

There are already several 

thousand of these Botika ng Bayan 

(people’s drugstores) selling cheap imported 

and locally produced generic 

drugs. (The program has, not surprisingly, 

produced clashes with innovator 

companies.) 

Singapore: total coverage 

The city-state is the region’s most advanced 

in terms of health coverage. It is 

also a renowned medical center, with spe- 

cialist physicians operating with state-ofthe-art 

procedures and technologies, 

across a wide range of conditions. The 

keystone of the Singaporean health system 

is the Central Provident Fund, created in 

1955 and funded by compulsory contributions 

from employers and employees. Acting 

both as a pension and a health-insurance 

fund, the program divides into three 

branches (the 3 Ms): Medisave, a compulsory 

contribution of 6–8% of the monthly 

salary covering hospital expenses (up to a 

Singapore is Southeast Asia’s most 

advanced country in terms of health 

coverage with a renowned medical center 

that houses specialist physicians who 

operate state-of-the-art procedures and 

technologies. 

cap); Medishield, a voluntary contribution 

covering extra hospital expenses; and 

Medifund, which covers the country’s 

neediest citizens through case-by-case decisions. 

The government is also planning 

to introduce a fourth M before 2008: 

Means testing, by correlating contribution 

to income levels, will extend Medisave to 

cover to high-tech medicine and achieve 

economies of scale. Meanwhile, Singapore 

is also considering prohibiting doctors 

from selling medicines directly. 


Between Rocks and Hard Places: 

The Southeast Asian Pharmaceutical 

Industry at a Juncture 

Across the region, many pharmaceutical 

companies have emerged 

over the past 50 years. Often 

springing from Chinese family 

businesses, the spectacular socioeconomic 

growth witnessed by the region has fostered 

a buoyant industry with hundreds of 

players. While some have barely taken off 

from the traditional medicine, remedies, 

and herbal tea activities, others have developed 

into large integrated groups, with 

distribution and logistics operations, fully 

fledged manufacturing capabilities, and 

in-house marketing activities. Despite the 

fundamental flaw of having only marginal 

API production in the region (unlike the 

compelling examples of fully vertically integrated 

China and India), the Southeast 

Asian pharmaceutical industry is a credible 

player that deserves to be kept in mind. 

Beyond market sizes, in themselves compelling 

enough, a wealth of entrepreneurial 

value, great industrial tools, cumulated 

know-how and expertise, and of course 

local knowledge is on display. The region 

is also at a genuine turning point of its development, 

and the industry is forward 

thinking and ready for action. 

The region’s industry: 

domination by the largest 

In the meantime, local players have devel- 







Amicie de Bodinat 

(amicie@ecreviews.com), and Yaz 

Yazicioglu (yaz@ecreviews.com). 

oped dominant positions that are hard to 

fight. In Indonesia, the largest market of 

the region, three players are leading the 

pack, each with different strengths. 

The leader in Indonesia, Kalbe Farma is 

Southeast Asia’s largest local pharmaceutical 

company when excluding Chinese and 

Indian players. With $267-million revenues 

in 2005, it is trailing the global leaders 

Pfizer and GlaxoSmithKline, which 

also hold the top positions in this region 

with $367 and $289 million revenues, respectively, 

for 2005 (source: IMS Health). 

Kalbe Farma is a versatile producer domi- 


nating the OTC market, the energy drinks, 

and the nutrition market and is number 

three in the Indonesian prescription market 

with a 9% market share. 

The next Indonesian players are Dexa 

Medica and Sanbe Farma, both with 

�$152-million revenues that benefited 

from truly impressive revenue growth 

rates of 35% and 28.6%, respectively. 

These companies are also strong prescription 

generics producers. Dexa Medica is a 

producer of solid and liquid forms, particularly 

injections. The company has expended 

the range of its offer notably by 

striking partnership agreements with 

some of the world’s most renowned 

pharmaceutical players, producing and 

distributing their products under license 

throughout Indonesia. Sanbe Farma, on 

the other hand, is moving beyond its original 

core activities of human and veterinary 

pharmaceutical manufacturing and is financing 

a biotech and research center as 

well as managing a brand new, state-ofthe-art 

private hospital in Bandung. 

Despite an impressive presence on their 

home turfs, all three companies have initiated 

international market expansion 

strategies starting across the region, in 

Vietnam, Thailand, and Myanmar as well 

as Africa, Nigeria in particular. “This 

densely populated African nation (132 

million people) is attractive to Indonesian 

companies as the two countries share market 

characteristics, from the fact that most 

of the population relies on a very low disposable 

income through to the fact that 

both markets are volume rather than value 

based. 

In terms of innovation, Kalbe Farma, 

Dexa Medica, and Sanbe Farma are at the 

edge of the sector. From Sanbe’s state-ofthe-art 

new CGMP sterile injection plant 

and new dry forms tablet plant to Kalbe’s 

Kalbiotech, a Singapore-based entity that 

will work on research coordination and licensing 

in Singapore and Dexa’s successful 

in-licensing and even out-licensing deals, 


these leaders have adapted spectacularly 

well to the new conditions of production 

expected from any decent player today. 

Although the country does not request 

CGMP for product registration, the Indonesian 

manufacturers have anticipated 

the call and have started investing ahead of 

time. Sanbe pharma’s two splendid new 

production units are ready to welcome inspections 

from any national drug regulatory 

body and take orders for export sales 

and contract manufacturing. The quality 

of the construction, equipment used, and 

procedures in place testify of the head start 

some players of the region have taken. 

In Malaysia, Pharmaniaga, the statebacked 

listed company, is also facing its 

own set of challenges and its path is a 

valuable indication of regional trends 

affecting the industry. The undisputed 

leader in its home market, Pharmaniaga 

must go beyond its cozy protected position 

(Pharmaniaga being the exclusive 

concessionary for public hospitals sales) 

and step up its efforts to become a regional 

leader. Over the past few years, 

these efforts have become more visible as 

the company built a superb new smallvolume 

injectables (SVI) plant to FDA 

standards and put a foot in China through 

a joint venture with a company that, such 

as Pharmaniaga, has public shareholders. 

The fact that the small-volume injectable 

factory (to be completed by Q4 2006) was 

built to FDA standards is no luck: Azhar 

Hussain, the company’s managing director 

is confident that “the next stage will be 

registration and our ultimate goal will be 

to enter the US market with one or two 

products. Contract manufacturing is also a 

very serious possibility. We have no limitation 

as we are a generic player and competition 

is everywhere.” Looking at the open- 

ness of his company to global cooperation, 

he adds that “one has to cooperate to compete 

nowadays.” 

Dynamism across the market 

In the shadows of the regional leaders is a 

thriving lot. Medium-size companies are 

forcing through their market positions by 

developing their niche competencies and 

their flexibilities to be recognized as serious 

market contenders. Among them, Indonesia’s 

SOHO, The Mensa Group, or 

Novell, Malaysia’s Hovid and Kotra, Thailand’s 

Siam pharmaceutical, Thai Nakorn 

Patana or Phillippines United Laboratories 

Mid-size companies are forcing through 

their market positions by developing their 

niche competencies and their flexibilities 

to be recognized as serious market 

contenders. 

are the best in class. With challenges lurking 

on every pharmaceutical horizon, 

these companies are using their flexibility 

and strong focus to design strategies that 

allow them to make the most out of the 

current situation. 

Thanks to Indonesia’s sheer market size, 

medium-size operators can have available 

capital to work on different approaches. 

The SOHO group, for instance, is completely 

refurbishing its production tool to 

bring it to the best standards in class. Tang 

Eng Liang, the company’s president is clear 

about the mid-term targets: “We want to 

renovate our factory, to be able to export 

to European nations first, then, who 

knows, to the United States” 

The quality required to achieve such results 

should be without any compromise, 

and while the emphasis is on renovating 

the production tool, other avenues for 

strengthening the business model are also 

sought after, as explained by SOHO 

Group’s President Director, Andreas 

Djamwari: “We also have to work towards 

rationalizing our portfolio, by looking at 

consolidating therapeutic classes coverage 

amongst our products.” As do many com- 

panies in the region, the SOHO group 

combines manufacturing alongside distribution 

activities, thus allowing the company 

to control its own distribution channels 

across Indonesia as well as to act as a 

distributor for any principal, local or international, 

willing to enter the fray. Yet, 

Mr. Djamwari stresses that the company is 

“looking for success in manufacturing instead 

of only distribution.” 

Meanwhile, external pressure cumulates 

on the manufacturers’ shoulders across the 

region to comply with more stringent 

quality standards, face the ever-increasing 

bite of the international competition, notably 

from the dual threat of India and 

China, and extra difficulties are being 

added by local authorities and regulators. 

In Indonesia, a price-capping policy has 

been announced, although the full extent 

of its application is still largely unknown. 

Local manufacturers are willing to play the 

game, all the more when the future cap 

doesn’t affect much their bottom line because 

they don’t produce the very basic 

products that will see their sales prices 

capped off. 

Roy Lembong, dynamic Director of 

Novell Pharmaceutical Laboratories, a versatile 

producer that has posted some of the 

best growth rates in the market, is unabated 

by the forthcoming price control 

and actually sees opportunities for some 

local players: “Usage of non-branded 

generics is low in Indonesia as there are 

little incentives for doctors to use them. 

Japan is facing the same issue but now has 

incentives. Doctors here still like to subscribe 

products from multinationals. A 

price capping will benefit patients, health 

systems as well as some players producing 

these type of cheap drugs.” 

Head of Dexa Medica, Ferry Soetikno 

believes that price cap will “ push a rationalization 

of prices and increase accessibility 

and affordability.” Expanding on 

the conundrum faced by the industry 

confronted to the future price cap he asks: 

“How do you link a good insurance system 

and good suppliers without sacrificing 

the sustainability of the companies? 

With higher accessibility, more people will 

go for more frequent health visits. This 

means more units sold, which in turn will 


alance the losses of price caps. The nature 

of the business will change and will 

turn even more towards volume-oriented 

activities.” 

This should favor those with large installed 

capacities. In the case of Novell 

though, the corporate strategy is to look 

up and aim at the top segment of the market 

by putting effort on the products 

through product development, high-end 

technology, and strong marketing. “We 

need technology, information on how to 

make products, how to achieve EU GMP 

standards and the right quality insurance 

system, etc.” 

With products ranging from oncological 

through to psychotic and osteoporosis 

treatments, the company is already positioned 

beyond commodity drugs and into 

the high-value added segments. The next 

stage for Novell and for Southeast Asian 

companies willing to stay abreast of the 

competitive environment and to succeed 

going forward will be not only to manage 

the changes domestically, in particular 

those induced by the pressure on public 

health systems and the transition into private 

health insurance but also product development 

and using pharmaceutical technologies 

available. 

Climbing the value ladder 

Novell’s Roy Lembong adds that “Indonesian 

companies need to improve their 

product development and be able to do for 

instance produce slow release products 

with good bioequivalent data.” Dexa Medica, 

one of the leading companies also 

worked on technological solutions to retain 

the edge. Developing its own fast-disintegrating 

capsules as well as sustainedrelease 

products, the company managed to 

license one of its products to Glaxo Indonesia. 

Improving delivery systems, packaging, 

or formulations to the point of 

achieving out licensing deals is a path of 

excellence that many in the region want to 

go down. These standards are meant to 


Local manufacturers who cannot comply 

will have to look for contract 

manufacturing. 

allow them to better compete domestically, 

regionally, and even beyond. Roy 

Lembong is for instance considering that 

Novell is positioning itself on a par with 

central and eastern European manufacturers 

in terms of quality ambitions, and taping 

developed markets such as Australia, 

or southern Europe. 

For Mensa, a group built from an API 

trading and distribution company that 

also manufactures and distributes pharmaceutical 

finish forms, the challenges of 

the environment bring countless opportunities 

and it is up to the fittest to survive 

and thrive. “Those who cannot comply 

will have to look for contract manufacturing. 

Local GMP was the first stage of challenge 

for the local manufacturers, CGMP 

was the second, and we, in our company 

are already thinking about the third stage 

to be able to service US and European 

markets. There will be opportunities for 

those serious in this business,” explains 

Jimmy Sudharta, President Director of 

Mensa Group. 

Indeed, he highlights a point that many 

across the region like to put forward: The 

sector across the ASEAN region is facing 

radical transformation movement: the 

cost of compliance and the ever-increasing 

standards of quality throughout the 

life sciences industry pushes out of the 

game many medium to small size players 

who have been reacting too little or too 

late. And, the sector will concentrate and 

change its shape in the next half decade: 

This will also press forward for a concentration 

movement that is likely to affect 

many, and present local and foreign pharmaceutical 

players with acquisition 

opportunities. 

Malaysia and Singapore: beyond PICs 

Both members of the pharmaceutical inspection 

Cooperation scheme (PICs), 

Malaysia and Singapore are the only Asian 

representatives of the club. Therefore, they 

are considered like the quality heralds of 

the region, adopting CGMP standards 

ahead of the rest of Southeast Asia. For 

Singapore, host to mainly international 

original drug makers, the membership is a 

natural step. Singapore’s pharmaceutical 

industry is driven by the multinationals 

that have brought in their seamless standards 

before the country even joined PICs. 

There are only two noticeable local generic 

companies that try to find a place in the 

sun, and the health system is meant to 

favor originators. With a total market of 

$350 million, the cake isn’t as appetizing as 

Indonesia or Thailand, yet Big Pharma investment 

is very steady. 

Recently, GlaxoSmithKline announced 

the development of a $190-million vaccine 

plant, the company’s largest investment of 

this kind in Asia. “Most companies have set 

up not only their manufacturing units here 

but also their distribution centers. This 

place is a hub for the industry and this has 

attracted many foreign talents here,” explains 

Fok Tai Hung, Executive Director of 

the Singapore Association of Pharmaceutical 

Industries (SAPI). “Singapore is the 

place to be if you want to develop products” 

he adds. Though Singapore previously 

only had Hong Kong as a direct competitive 

threat, it finds itself unchallenged 

today, as Hong Kong lost a large part of its 

appeal when it joined the Chinese realm 

back in 1997. 

Malaysia presents a different picture: the 

largest market, it is also structured in a 

radically different way than state-backed 

company, Pharmaniaga. This company is 

leading the sector and creates a very strong 

vacuum around it: exclusive concessionaire 

for hospital supplies. The company is enjoying 

the benefits of a captive market 

while making its presence strongly felt on 

the rest of the market. While most players 

are rather critical of this monopolistic 


competitor, they also have benefited from 

its quality leadership and have had to eliminate 

all forms of complacency to survive 

in such an extra challenging environment. 

Some companies like Hovid (one of the 

top 3 players on the market) have spread 

their market risk widely. Exporting to 35 

countries, the company generates 60% of 

its turnover outside of Malaysia and expects 

that figure to grow. It is also working 

on niche products such as tocotrienols and 

other vitamin E derivatives. With a large 

number of products pending registration 

abroad and a strong R&D culture, the 

company displays one type of strategy for 

Malaysian companies. Simply illustrated 

by Managing Director David Ho: “If we 

were depending only on the Malaysian 

market, the picture would be gloomy.” 

Meanwhile, others are trying their ways 

in the shadows of Pharmaniaga: while 

companies like Duopharma may very soon 

feel the blow of Pharmaniaga’s investments 

in manufacturing capabilities and 

face an onslaught of similar products, like 

small-volume injectable, others choose a 

nondirect confrontation and work on 

their niche strengths. Kotra pharma is focusing 

on developing its dietary supplements 

in parallel to its prescription drugs 

and is putting emphasis on brand-building 

in the region. 

Apex Healthcare has sold it historical 

retail business to two of the region’s leading 

retail outlet chains in Singapore and 

Malaysia and has undertaken a thorough 

strategic reshuffling. The boldest move is 

the company’s venturing into China 

through Apex’s equity participation in a 

regional pharmaceutical company in the 

Fujian province that has recently added a 

manufacturing component to its existing 

distribution and retail business across the 

Fujian region. 

For Dr. Kee Kirk Chin, the company’s 

Managing Director, “focusing purely on 

manufacturing issues is a wrong calculation, 

despite the fact that there will always 

be a niche for contract manufacturing 

here.” In this case, new markets exit and 

stepping up in the big Chinese game are 

Hunger for new innovative technology is 

genuine and the market has the capacity to 

absorb it. The real challenge will be for 

local manufacturers to pass through this 

testing time with their eyes cast abroad. 

the keystones of the company’s strategy. 

Others are trying to develop foreign cooperations 

alongside different lines. 

For example, the Antah Healthcare 

Group has in-licensed nanotechnology 

products from US companies and is very 

confident about the future of these cuttingedge 

products on the regional markets. 

YSP Industries, a Malaysian company with 

a sister company in Taiwan has for its part 

chosen the path of regional development. 

Following the 1997 financial crisis, the 

company established local marketing outlets 

working to register its products across 

the Southeast Asian region. Also benefiting 

from factories in Malaysia, Taiwan, China 

and the United States, the company displays 

a versatility that allows it to be confident 

despite the piling challenges. 

Strength in adversity 

Thailand’s very specific market organization, 

here again dominated by a state-controlled 

entity, has helped create a sector 

that has resilience and a strong fighting 

spirit. With ever-increasing pressure on 

the health system, and the pressure being 

in part vented out over the manufacturers, 

local players have learned to control costs 

and look for product opportunities. Their 

hunger for new innovative technology is 

genuine and the market has the capacity to 

absorb it. The real challenge will be for 

local manufacturers to pass through this 

testing time with their eyes cast abroad. 

In the Philippines, too, reform is on the 

way and the business conditions are 

evolving fast. As a local medium-size 

player, you stand a chance to gain benefits 

from these reshufflings, as your local 

knowledge will always prime. Indeed, 

companies like United Laboratories, a 

leader in the Philippines, have grown 

from modest players to giants with increasingly 

global outlooks. And, all these 

companies conserve the benefits of market 

recognition and local knowledge that 

are indispensable to succeed in challenging 

markets such as Southeast Asia’s. 

The changing shape and business conditions 

in the Southeast Asian pharmaceutical 

industry should in turn open avenues 

of cooperation between US or European 

companies and Asian players. Amongst 

similar companies by size and profiles, 

there are plenty of synergies to be developed. 

With local companies often being 

able to tap into consumer pools ranging 

from 25 to 220 million people for one 

country, and up to potentially 520 million 

consumers across the region, market 

prospects are appealing, even when considering 

the low disposable-income levels. 

Should a western company be the holder 

of an innovative technology that can be 

easily transposed in Asia, and many success 

stories could blossom and thrive. The 

ethos and business abilities of local players, 

from the leaders through to the challengers, 

are very convincing. Their faith in 

the market is genuine and their will to succeed 

is fundamental. Like-minded business 

people from across the world always 

find subjects of common interests. At the 

time of over-focus on China and India, it 

is well worth to step back, take some 

prospective, and see the opportunities 

waiting to be realized in Indonesia, 

Malaysia, Thailand, the Philippines, and 

Singapore. 


Movers & Shakers 

A round-up of Southeast Asia’s most influential pharma leaders, 

complied by EC Reviews 

PHARMANIAGA, Shah Alam, Malaysia 

Mr. Azhar Hussain, Managing Director 

Number one in its home market, Pharmaniaga is “a company 

on the threshold of moving into the global market,” 

says Azhar Hussain, the company’s managing director. Indeed, 

2006 is a key year for Pharmaniaga and will see the 

progress of the company’s venture in China. Pharmaniaga 

is involved in a joint venture with Wuxi Worldbest Treeful Pharmaceutical Co Ltd 

to set up a large-volume intravenous (LVI) plant, now fully operational.The plant 

will be able to produce up to 100 million bags or bottles in the next few years. 

Meanwhile, a small-volume parenteral plant built to FDA standards will be completed 

and will start producing this year, giving a tremendous thrust forward to 

the state-backed listed company in its seemingly irrepressible progression. 

UNITED LABORATORIES, Manila, PHILIPPINES 

Mr. Carlos C. Ejercito, CEO 

United Laboratories, with its 23% share of the Filipino market, 

is by far the leading drug manufacturer in the country. 

But the ambitious strategy of its CEO, Carlos C. Ejercito, already 

projects the company towards future challenges:“to 

further expand our activities in the region, we aim to become 

a truly regional player, among the best-positioned in the ASEAN landscape, 

ready to tap opportunities not fully recognized by others.That’s why we decided 

to venture into the biotechnological segment and to do that in China, where we 

created Shanghai United Biotech, engaged in the development, manufacturing, 

and marketing of biopharmaceuticals.We are very confident the risk we took will 

soon be properly rewarded.” 

KOTRA PHARMA, Melaka, Malaysia 

Mr. Jimmy Piong, Managing Director 

President of the Malaysian Organisation of Pharmaceutical 

Industry (MOPI), Jimmy Piong is wary of challenges laying 

ahead. His company is one of those striving in the shadow’s 

of Malaysia’s Pharmaniaga and its diversification policy has 

so far been bearing fruits. Mr. Piong sees the future in brand 

development, the increase of regional sales, and the increase use of technological 

products. Injectables are also showing great potential and his company is mulling 

a project in this direction. But the outspoken managing director of Kotra is also 

ready to raise issues of data exclusivity, cost of compliance, and unfair domestic 

competition to its fellow manufacturers of Malaysia and to its national authorities. 

DEXA MEDICA, Jakarta, Indonesia 

Ferry Soetikno, Managing Director 

Mr. Soetikno is a visionary. In 1996, he started implementing 

a new strategy for his group:“We decided to remain a 

generic company, respectful of the patent laws, but at the 

same time to establish alliances with the largest global 

originators.” Notably developing licensing agreements, the 

company managed to grab the top spots of quality producers of Indonesia while 

working with global firms like Pfizer.Today displaying impressive growth figures, 

the company is increasing expenses for research in product development and 

technology to “put more and more R into our D,” in the words of its leader. 

LLOYD LABORATORIES, Manila, PHILIPPINES 

Ms. Zenaida D. Balajadia, Chairman of the Board 

When it started its operations in 1989, Lloyd Laboratories 

was merely a repacker for medicines in blister form. Almost 

17 years later it now stands as one of the country's major 

contract toll manufacturers of pharmaceutical and cosmetic 

products. Its joint ventures and partnerships extend to prestigious 

pharmaceutical companies in Asia, Europe, the United States, and the rest 

of the world. As Zenaida D. Balajadia, Chairman of the Board, points out,“our reliable 

team of formulation and research professionals ensures high quality standards 

from start to finish; we are now able to assess the stability characteristics of 

drug products and determine their projected expiration dates. Our reputation for 

efficiency, quality, and customer service is now a byword in the industry.” 

HOVID, Ipoh, Perak, MALAYSIA 

Mr. David Ho, Managing Director 

Hovid is described by many in Malaysia as an industry 

leader. Be it for its foresight in using palm oil, Malaysia’s 

largest agricultural production, to produce biodiesels and 

as a source of vitamin E and Tocotrienols or for its very successful 

and extensive foray into foreign markets, the company 

indeed has many areas of expertise. David Ho, the man behind the successful 

transition of the company from a family-owned herbal tea maker into a trend 

setter explains that “In this industry, foresight and vision are everything. But today, 

with these changes in the environment, it might not be enough.” 

SOHO GROUP, Jakarta, Indonesia 

Mr. Tan Eng Liang, President Commissioner 

Family businesses can grow into leading players.The Soho 

group is developing its activities across the distribution 

and manufacture of OTC and prescription drugs. Now revamping 

its factory, the company is expecting to offer 

more services as a contract manufacturer.“We have to 

strike the right balance between our production needs and our partners.We can, 

for instance, introduce foreign products with our brand names, and we are flexible 

and open,” explains Tan Eng Liang. Like many of the best in the region, the 

company has invested a great deal of time and capital to upgrade its systems and 

procedures. Now, it hopes to share the benefits of these investments with partners 

from the region and beyond. 

SANBE FARMA, Bandung, Indonesia 

Dr. Jahja Santoso, President Director 

Dr. Santoso is a genuine character.The man behind the 

birth and rise of Indonesia’s third largest group and one of 

the region’s best pharmaceutical companies doesn’t seem 

to run out of energy and ideas.With a recently completed 

state-of-the-art large-volume parenteral sterile plant and a 

new dry-form plant, the company is very clearly displaying its intention to take 

the top spot. Dr Santoso’s passion for winning never runs out of steam: ”We are 

moving into biotechnology through cooperation with other players and we want 

to explore and take advantage of the latest advances in product technologies.” 

To channel his energy and materialize its commitment to the community, Dr Santoso 

recently opened a private hospital in Bandung, Indonesia, yet another facet 

of this multitalented industry leader. 


KALBE FARMA, Jakarta, Indonesia 

Mr. Johannes Setijono, President Director of 

Kalbe Farma 

The region’s giant doesn’t have room or time for complacency. 

Dominating the Indonesian market, the group is 

also building up its credentials as a global player. In the 

meantime, it has set up a biotechnology venture in Singapore 

and is looking for growth vehicles across the scope of pharmaceutical activities:“Our 

strategy is to work with small innovative companies that have great 

products but no means to sell them in markets like ours or this region’s.We are 

also moving into more codevelopments and we are working to go into pure 

product development,” says Mr. Setijono, the company’s president. 

GOVERNMENT PHARMACEUTICAL ORGANISATION 

(GPO), Bangkok, Thailand 

Lt.Gen.Dr.Mongkol Jivasantikarn, Managing Director 

Dr. Mongkol is a retired military surgeon whose responsibilities 

included being the doctor of Her Royal Highness 

Princess Maha Chakri Sirindhorn and following Her Majesty 

the Queen of Thailand in her royal doctor group. Now, the 

managing director of GPO, his primary agenda is reshaping the GPO to partake in 

the food supplement and cosmetic markets which will increase the GPO’s sales by 

two-fold over the next five years to Bt10 billion (approximately $250 million). Currently, 

GPO is the biggest distributor of medicine to hospitals in Thailand, what 

many consider a state-owned monopoly.“We don’t shy away from our responsibilities 

at any stage: the times are challenging for our country and our company is 

and will be at the heart of the challenge,” says Dr. Mongkol. 

T.O. CHEMICALS Ltd., Bangkok, Thailand, 

Mr. Chiravi Pavitrapok, PhD, Associate Managing 

Director 

T.O. Chemicals was first established in 1979. Since then T.O. 

Chemicals has diversified into several companies forming 

the T.O. Group of companies. Ranging from manufacturing 

and distribution of capsules to Penicillin and other antibiotics,T.O. 

Chemicals has been GMP certified since 1988. Mr. Chiravi is the youngest 

of the dynamic team who recently came back from the United States after finishing 

his PhD in chemical research. His ambitious goals are now to pioneer his family’s 

business into R&D for new molecules with its recently finished facility and export 

to markets outside of the ASEAN region.“I want to start exporting to the 

Middle East and move down to Africa, where there is a greater need for life saving 

drugs that we can provide,” says Mr. Chiravi Pavitrapok. 

HIZON LABORATORIES, Manila, PHILIPPINES 

Mr. Rafael H. Hizon Jr., CEO 

One of the oldest and most respected drug producers in 

the country, a proudly family-owned company, Hizon Laboratories 

has grown over the years to become one of the 

leading contract manufacturers of the Archipelago: to date, 

it counts seven out of the 10 biggest Filipino pharmaceutical 

players among its customers. At the same time, it started looking for overseas 

opportunities, launching its dental line medicines in Thailand.“It’s mainly quality 

that we offer. I want to stress this point: even if the Philippines are still a developing 

country, foreigners shouldn’t forget there are companies over here that constitute 

an example of cutting-edge practices and very advanced technology,” says 

Rafael H. Hizon Jr., CEO of Hizon Laboratories. 

MENSA GROUP, Jakarta, Indonesia 

Mr. Jimmy Sudharta, President Director 

Started as an API importer, the Mensa Group has developed 

its manufacturing and distribution activities.Today, 

the company is a dynamic Indonesian player with its eyes 

cast beyond the domestic horizon. Already producing 

under license for UNICEF, the company is mulling a 

cephalosporin unit to be completed within the next two years. For Jimmy Sudharta, 

the founder of the company, market constraints from competition through 

to ever-increasing demands for more stringent quality standards are blessings in 

disguise for those who can comply during a time of cross-border opportunities. 

“Every country in the region looks at Indonesia with AFTA in mind.” 

BIOLAB Co. Ltd., Bangkok, Thailand 

Mr. Rachod Thakolsri, Managing Director 

A part of the BioPharm group of companies, Biolab manufactures 

and distributes its medicine through Biopharm 

Chemical Co. Biolab is one of the few companies in Thailand 

ready for PIC/s standards and already recognized for 

meeting GMP standards since 1992. One unique aspect 

that sets Biolab apart from the other manufacturers is its limited API production. 

Biolab’s ranking is fourth among Thai manufacturers in terms of sales.“We expect 

to push our exports from 25% to 40% in the year to come with the opening of our 

new facility, which already meets PIC/s standards”, stated Mr Rachod Thakolsri. Biolab 

is currently the only local producers of Omeprezole antibiotic, which is its own 

patent. 

PHARMACEUTICALS AND MEDICAL SUPPLY Ltd., 

Bangkok, Thailand 

Mr. Sukavat Amarekajorn, Managing Director 

What first started as a hobby, Mr. Sukavat has now been 

manufacturing pharmaceutical equipment for nearly 30 

years. A leading supplier in the domestic market, Mr. Sukavat 

competes with brand names from Germany and 

Switzerland with his own developed and patented equipment. He has expanded 

his manufacturing scope and facilities to include equipment for food and cosmetics 

as well. Currently, Mr. Sukavat exports his products to nearly 30 countries 

throughout Europe, South America, and primarily Asia. 

SIAM PHARMACEUTICALS CO. Ltd. Bangkok, Thailand 

Mr. Thawan Cheunkarndee, Founder and Chairman 

Thawan is celebrating the 40th anniversary of his company 

this year.Well known throughout the industry and Thailand 

for his unpublicized and silent charitable contributions, 

Thawan was one of the pioneers of pharmaceutical manufacturing 

in Thailand. Firmly committed to his moral and 

social obligation to provide life-saving medicine,Thawan is resolute on only collaborating 

or partnering with companies that share his beliefs. His goal now is to 

pass this philosophy to the rest of the industry to share and raise the level of 

health in Thailand. 


Stage Fright: 

The Risks and Benefits 

of Moving Forward 

The Southeast Asian pharmaceutical 

industry is at a crossroads: The 

transition from underdeveloped 

nations to developing and now 

emerging markets has brought with it 

many conundrums and many opportunities. 

The shape of the sector across the region 

is expected to drastically change, and 

today’s picture is evolving quickly. Every 

country of the region and its national industries 

faces challenges associated with its 

socioeconomic conditions and industrial 

history. But, the novelty is that a set of 

common threats and opportunities is 

surfacing across the region that should 

determine the near future of the sector 

as a collective, increasingly unified, and 

certainly more global group of actors 

competing across a larger market space. 

Started as a joint effort to promote 

economic cooperation and the welfare 

of the people in the region, ASEAN has 

increasingly evolved over the years into 

an economic forum doubled with instruments 

of economic action. At a 2003 

meeting in Bali, it was stated that the 

objective is to set up an ASEAN economic 

community by 2020. Eleven key sectors, 

including the healthcare sector, were 

identified as priorities for the integration 

effort. 







Amicie de Bodinat 

(amicie@ecreviews.com), and Yaz 

Yazicioglu (yaz@ecreviews.com). 


Sec. Roberto M. Pagdanganan, 

Chairman & President of PITC 

The first anticipated stepping stone will 

be the 2008 ASEAN Free Trade Agreement 

(AFTA), which will be held in January 

2008. Covering a wide range of items, this 

agreement will unify a market space of 

more than 500 million people across 10 

countries. It will affect the pharmaceutical 

industry by allowing companies to trade 

freely and register products across the region. 

Of course, the dream of a fully free 

market is still far away because some protection 

mechanisms will still be available 

to states that still wish to play by their own 

rules. But, provisions are to be strictly 

framed and will be more constraining 

than opening up to the free and fair trade. 

In the meantime, the industry is looking at 

unifying the norms and standards as well 

as facilitating registration procedures and 

the flow of goods, technical dossiers, and 

bioequivalence studies across the region. 

Labeling standards for pharmaceutical 

and medicinal products should be established 

by Dec. 31, 2006. By December 

2008, an ASEAN common technical 

dossier (ACTD) is expected to be released. 

Approval and recognition across the region 

should then be a natural step. Currently, 

efforts are being made to formalize 

a postmarketing alert system for defective 

pharmaceutical and medicinal products 

and explore the feasibility of implement- 

The Philippines turn vision into reality 

Roberto Pagdanganan, Chairman the Philippine 

International Trading Corporation (PITC) faces 

several challenges as he deals with 

pharmaceutical-related issues. Amid political 

turmoil, his country has grown at a fast pace and 

continues to do well, yet 14 million people live in 

poverty, retail prices of medicines are among the 

highest in the world, and the major distributor is 

granted the privilege of a near monopoly. 

Because of a predominance of multinational 

companies, lower priced generic medicines are 

struggling to establish themselves (though a 

generic drugs law was passed in the 1980s). 

High drug prices are a major concern in the 

Philippines.The Department of Health and the 

Department of Trade reveals that five out of 

every nine medicines cost more in the 

Philippines than in Malaysia or Indonesia. Health 

Action International reports that Amoxil sells at a 

higher price in the Philippines than in the UK or 

Canada. On average, medicines in Manila are 16 

to 18 times more expensive than those sold in 

India; and a price survey by PITC showed that 

several medicines produced by Pfizer in the 

Philippines are overpriced by as much as 730% 

compared with their selling price in Pakistan. 

Thus, consistently with the aims of the Medium 

Term Philippine Development Plan 2005–2010, 

the government entrusted PITC to set up a stateowned 

medicine distribution network named 

Botika ng Bayan (people’s drugstore). 

The Botika ng Bayan concept 

Through these outlets, which operate as a 

franchise where companies or entrepreneurs 

might apply for a license, Filipinos can buy 44 

types of the most commonly-used medicines in 

the country at half the price.At the onset of the 

program, all the stores sell four types of drugs: 

antibiotics,antihypertension drugs, antiasthma 

drugs and antidiabetes drugs.BnB is turning into a 

profitable business, particularly for local 

governments executives, who use the money 

raised to finance other projects of public utility, 

such as schools, roads and hospitals.Marketing 

less-expensive generic drugs has encountered 

resistance from multinational companies.PITC, 

with its ambitious target of lowering the prices of 

essential medicines by 50% by 2010 and 

accrediting 3000 outlets by the same year, has 

been at the forefront of this confrontation since 

the beginning,and quite successfully so.After a 

protracted quarrel with Pfizer, which sued over an 

attempt to import samples of Norvasc before 

patent expiration, Pagdanganan brokered a deal 

with GlaxoSmithKline, which now regards BnB as 

an opportunity rather than as an obstacle.To show 

its commitment, the British major signed a 

memorandum of agreement with PITC to have its 

branded line of medicines available in all BnB 

outlets nationwide.Thus, the stage has been set to 

further expand cooperation with traditional rivals 

and to negotiate from a stronger position in the 

future.PITC also has explored parallel trade (i.e., 

exporting of a product, on sale in one country at a 

lower price to another) to generate profits. 

PITC focuses on traditional issues to support the 

following:(a) cross-country effect:parallel trade, 

through an implicit arbitrage, should promote 

price equalization across countries and favor 

market efficiency; b) destination country effect: 

higher price competition in destination countries 

tends to reduce overall drug prices; c) patient 

benefits:patient access to innovative medicines 

could improve because of lower direct and indirect 

costs; d) industry impact:it should spur the local 

industry,if not the international players to overall 

industry efficiency and, thus, cost effectiveness. 

Others such as Panos Kanavos, professor of 

healthcare policy at the London School of 

Economics, point out “there is no evidence of 

sustainable dynamic price competition in 

destination countries, with no corresponding 

indirect cost savings”and “the supposed benefits 

of this system need to be seriously reviewed”.The 

debate is expected to continue for a long time. 

PITC believes decreased production costs will 

lead to lower drug prices.It aims to assist local 

drug producers acquire raw materials at more 

convenient prices and exploit scale economies.“We 

would like to cooperate more closely with our local 

manufacturers; given the high brand-sensitiveness 

of the Filipino market, and we would like to help 

them further to develop the concept of branded 

generics,“ says Pagdanganan.Nevertheless, 

national manufacturers do not support 

implementing parallel trade and importing less 

expensive drugs.The government has been 

successful in bringing cheaper medicines.Trade 

department officials have said they would likely 

stop buying drugs from India and elsewhere if 

local manufacturers could offer the same quality 

and low prices.PITC, with its Botika ng Bayan, has 

triggered a small revolution in the Filipino 

pharmaceutical market.In pursuing the ambitious 

strategy Mr.Pagdanganan has mapped out, the 

final outcome will depend on his ability to get a 

larger number of national players on board. 


For once, casting originators against 

generic players might end up strengthening 

the industry across the board. 

ing a flex-twinning system among countries 

with similar setups. These efforts will 

bring many opportunities to the region 

and its players, even if they will be taken 

primarily by those who had the foresight 

to turn their organizations into globally 

able companies. A unified market of more 

than 500 million potential customers is 

clearly a mouth-watering prospect for 

most regions leaders and their challengers, 

but it might come with strings attached. 

Exclusivity versus AFTA 

While the application of a free-trade 

agreement is being discussed on a bilateral 

level between Malaysia and the United 

USEFUL CONTACTS 

Indonesian Pharmaceutical Association 

Jakarta, Indonesia (GP FARMASI) 

Tel: +62 21 420 3040 

www.gpfarmasi.org, 

Malaysian Organization of Pharmaceutical 

Industries, Petaling Jaya, Malaysia, (MOPI) 

Tel : + 603 7957 3070/1004 

www.mopi.org.my 

Singapore Association of Pharmaceutical Industries, 

Singapore (SAPI) 

Tel: +65 67 38 0966 

www.sapi.org.sg 

The Singapore Pharmaceutical Manufacturer’s 

Council, Singapore, (SPMC) 

Tel: +65 6826 3000 

www.smafederation.org.sg 

Philippine Chamber of the Pharmaceutical Industry, 

Inc. Manila, Philippines, (PCPI), 

Tel: +63 2 535 4835 

www.pcpi-org.com 

Thai Pharmaceutical Manufacturers Association, 

Bangkok, (TPMA), 

Tel: +66 28 63 5106 

States, future members of AFTA (who 

must review their existing agreement with 

the United States before full entry into 

AFTA) have looked at their Malaysian 

neighbors with apprehension as the issue 

of data exclusivity has been brought forward 

by the United States during the discussion. 

These issues has triggered a wave 

of concerns across the Southeast Asian industry. 

The data at stake are all the test 

data (i.e., clinical data) that were produced 

by the originators in the course of the new 

molecule’s development. 

Because it appears that in any FTA 

signed before mid-2007 the US Trade Representative 

is legally obliged to obtain USsimilar 

standards of intellectual property 

protection with the signatory country, the 

threat lurking in the almost exclusively 

generic industry is clear. The United 

States has the highest and most onerous 

intellectual property standards in the 

world, so Malaysia and other Southeast 

Asian countries would need to raise their 

intellectual property protection standards 

significantly. Following the latest round of 

trade talks undertaken by the World Trade 

Organization, the Doha declaration estab- 


lished the use of trade-related aspects of 

intellectual property rights (TRIPS) 

agreements and reinforced the importance 

of access to medicines while reaffirming 

the ability of governments to use 

the flexibilities available in TRIPS to ensure 

the affordability of medicines. 

Now the United States is pushing for 

what is commonly referred to as “TRIPS- 

Plus” allowing for a period of data exclusivity 

of up to 11 years beyond the date a 

generic version of a product would normally 

begin to compete with the patent 

holder. 

According to a letter highlighting a 

Thai survey and sent by the president of a 

Malaysian consumers association to the 

Malaysian Minister of Health in March 

2006, “The Thai Ministry of Health has 

done a study of the predicted impact of 

the TRIPS-Plus provisions found in US 

FTAs. It found that if generics were prevented 

by data exclusivity from entering 

the market for a period of ten years beyond 

the date when patents normally ex- 

pire, this would cost an extra $5400 million 

(at wholesale prices) per year which 

is 77% of the current total Thai health 

expenditure.” 

Furthermore, the adoption of TRIPS- 

Plus provisions would greatly harm the 

development of the local pharmaceutical 

industry, which relies on being able to produce 

bioequivalent products for its markets 

under the current protection of the 

TRIPS system and the other intellectual 

property protection mechanisms. 

This will be a sticky situation if the negotiation 

favor international originators as 

opposed to local generic manufacturers in 

Southeast Asia. It is also a test of the ability 

of the industry to mobilize itself across the 

region, while facing a common threat. 

Beyond this issue lies opportunities to 

strengthen what is today a multitude of 

medium-size players with different business 

agendas into a more solid, forwardthinking 

and opportunities-grabbing industry. 

In turn, this should offer plenty of 

areas of possible cooperation between international 

companies, particularly US 

and European, and the movers and shakers 

who will emerge from these trying times. 

For once, casting originators against 

generic players might end up strengthening 

the industry across the board. 

ACKNOWLEDGMENTS 

Pharmaceutical Technology and Executive Country 

Reviews would like to thank all companies and 

organizations that helped for the preparation of 

this review. 

Indonesia: Novell Pharmaceutical Laboratories 

www.novellpharm.com, Kalbe Farma, 

www.kalbe.co.id, Soho Industri Pharmasi, 

www.soho.co.id, Sanbe, www.sanbe-farma.com, 

Mensa Group, www.mensa-group.com, Dexa 

Medica, www.dexa-medica.com, Combiphar, 

www.combiphar.com, 

Malaysia: Kotra Pharma, www.kotrapharma.com, 

Apex Healthcare, www.apexpharmacy.com, 

Scanlab, www.scanlab.com, Dynapharm, 

www.dynagroup.com.my , Hi-City, www.hicity.com, 

Malaysian Pharmaceutical Industries, 

Antah Pharma, www.antah.com.my, Royce Pharma, 

www.roycepharma.com,YSP, www.yspsah.com, 

Idaman, Pharmaniaga, www.pharmaniaga.com , 

Emerging Pharma, www.emergingp.com , Hovid, 

www.hovid.com. 

Singapore: ICM, www.icmpharma.com.sg 

Philippines: Sydenham Laboratories, 

www.sydenhamlab.com, Philippine International 

Trade Corporation, www.pitc.gov.ph, Elin 

Pharmaceuticals, www.elinpharma.com, Hizon 

Laboratories, Lloyd Laboratories, 

www.lloydlab.com,YSS Laboratories, 

www.ysslab.com , Unilab, www.unilab.com.ph , 

Pascual Laboratories, www.pascuallab.com , 

Danlex. 

Thailand: GPO www.gpo.or.th, Biolab 

www.biothailand.com,TO Chemicals 

www.togroupthailand.com, Greater Pharma 

www.greaterpharma.com, A.N.B. Laboratories 

www.anlab.com, PMS www.pms-group.net, NR 

Industries Group www.nr-group.com, Silom 

Medical, Zuellig Pharma www.zuelligpharma.co.th, 

Mega Lifesciences www.megawecare.com, Siam 

Pharmaceuticals www.siam-pharm.com. 

ONE STEP FURTHER 

For further information on the above companies, 

please contact us: info@ecreviews.com, 

www.ecreviews.com

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