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Introduction
The
pharmaceutical industry is under tremendous pressure to keep delivering
the blockbuster products and good profits that it has managed to secure in
past years, but maintaining this has never been more difficult. In 2000,
13 of the top 100 products went
off patent, equaling $11 billion in sales. By 2010, patents on 100 billion
worth of drugs are expiring. In order to maintain double digit growth, a
US$20 billion company would have to launch a product that will bring in
approximately US$3 billion each year.
While
the number of new products has increased, clinical development time has
doubled since 1982 to an average of 68 months with an expansion in the use
of complicated technologies, a focus on more complex and life-threatening
diseases, demands for higher standards of safety and efficacy and a need
to develop medicines for global markets. Pharmaceutical companies spend an
average of 240 million in the United States on clinical trials required by
the FDA, and this does include drugs that fail to make it onto the market.
With
pressure on every front from drug pricing to sales and marketing budgets
to a lack of R & D productivity, it is no big surprise that companies
have to look at every possible potential market to maximize sales and
profits.
Asia
– 28 percent of the world pharmaceutical market and growing
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Asia
is currently perceived, as one of the fastest growing healthcare markets
in the world, and pharmaceuticals is no exception. After going through one
of the toughest times ever at the height of the economic crisis in the
late 1990s, most Asian markets have recovered strongly and look set to
forge ahead in this millennium. Asian
governments and the private healthcare sector are taking steps to ensure
that they are not left behind in the ‘new age’ of healthcare.
Governments are either forming regulations or programs to make their
countries attractive to healthcare investors in terms of manufacturing of
research or are making solid investments themselves to being them on par
with their Western counterparts. Healthcare industries in Asian countries
have evolved from consisting mainly of multinational companies with import
and marketing functions. There is now a wide range of such companies
involved in product development, clinical trials, research and
manufacturing activities in the region. Additionally the traditional
healthcare market segments like pharmaceuticals have now expanded to
include a significant portion of other healthcare segments like medical
devices, diagnostics, hospital equipment and information systems,
biotechnology and ehealth.
Frost
& Sullivan estimates that the total pharmaceutical market in Asia
Pacific stood at more than US$95 billion in 2001, and this represents
approximately 28 percent of the world market in terms of manufacturers’
revenues. Market sizes of some of the key individual countries are shown
in Figure 1.
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Figure
1: Overview of the pharmaceutical markets in Asia (billion USD)
By
2005, manufacturer revenues in this region are expected to surpass US$110
billion. Hopefully, with continuing economic recovery and more
stable currency trends, Asian pharmaceutical markets are forecast to
experience growth in the 2000-2005 period with a Compound Annual Growth
Rate (CAGR) of 5.8 percent (10.4 percent excluding Japan). Strongest
growing markets are China, India, South Korea, Australia and Taiwan.
There
are key trends that have pushed or are pushing this development among
which are the large population base with the increasing percentage of the
aged, the increasing incidence of ‘Western’ lifestyle diseases, better
infrastructure in terms of facilities, hospitals and skills as well as
Government support for healthcare research and development.
Other
major changes in the Asian markets are national healthcare reforms,
maturing national health insurance systems and increasing coverage of
populations by medical insurance, a growing popularity of the internet,
intensifying local competition and an increasing number of research
centers in Asia
The
‘graying’ of Asia
One
of the major challenges in Asia is the impact of the growing population
especially that of the elderly, which is causing an increase in the
prevalence of diseases, related to old age. With an estimated population
of 3.2 billion in 2000, the Asia Pacific region holds approximately 40
percent of the world population, but the increasing life expectancy is
contributing towards the gradual ‘graying’ of Asia. By 2005, it is
estimated that 25 percent of the population in Australia and Japan will be
above 55 years of age. In Hong Kong, Taiwan and South Korea, it is
estimated at 11 percent, while for Singapore, it is estimated at almost 8
percent. Increasing urbanization, spending power and sophisticated
lifestyles are also causing an increase in awareness on issues such as
weight reduction and hair loss. Figure 2 and 3 provides key demographic
trends in the region, and the aging population for some major countries.
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