As the recent Economist Intelligence Unit survey showed, Asia remains an important region for biopharma, with some notable trends appearing for the next five years. We spoke about these findings with brand-name’s Julien Zhao (Biosimilar and Emerging Biotech Markets Manager, Asia) and MS Mahadevan (Head of Actives and Formulations, Asia Pacific) to hear their take on Asian market evolution, cross-border collaboration, and why countries like Indonesia might just be the future of the industry.
In the EIU survey, the results showed a great interest in expanding into Asia. Big picture, how would you characterize Asia for the biopharma industry at this point in time?
MS Mahadevan: I’d like to emphasize that Asia is not just one region. There is absolute diversity in terms of culture, economics, and market development. Country to country, they’re unique from both a business and cultural perspective.
Julien Zhao: Overall, the survey reflects that Asia is no longer only following Western countries in the biotech industry. I think the major lesson from the survey, and the dynamic we see in the field with all these countries, is that Asian biotech companies are moving into innovative drugs and novel therapies. This could be the future of this industry. There’s a lot of energy, a lot of investment that is being put into those novel therapies.
Out of all the world, the executives said the countries they were most interested in entering within the next five years were Taiwan, Indonesia, and South Korea. Why do you think that is?
JZ: I think for South Korea it’s their innovation capacity and the focus on the biotech industry. The environment and infrastructure that has been set up will support biotech development. And from quality standards, they are at a very high level, comparable to Western countries.
MSM: The manufacturing scale you will see in South Korea between now and five years, you will not see anywhere in the world. They are looking at such massive capacities and investments.
JZ: For Taiwan, my view is that Taiwan is a bridge to China. With a much better regulated market, the access to China would be made easier. Just by collaborating with them it might facilitate the access to the Mainland. And one of the reasons Indonesia is such an attractive market comes from its large population and the growing universal medical coverage.
MSM: Indonesia is a country of the future. I’m quite excited about the Indonesian market. And I’m really keen to see how it evolves in the next five years, because the country has such potential. It’s a major market in itself, it’s a hub for pharma and biopharma product manufacturing, and it’s the hub for the OIC – the Organization of Islamic Countries, more specific to vaccines.
You mentioned novel therapies and biosimilars. What role are they playing in the development of these Asian markets?
JZ: To comment on the survey itself, I was very surprised Japan wasn’t represented there. Japan was running late in developing antibody based drugs; therefore the country decided to focus mainly on novel therapies. Today, Japan is definitely one of the most advanced countries in novel therapies development. If we look at South Korea and China, those two countries are not known for leading novel therapy development. But they are also investing a large amount of funding in that area. China and South Korea have the second highest number of on-going clinical trials for CAR-T and stem cells therapies respectively
I think the development of innovative drugs in China has been facilitated with the large population of returnees coming back to China with experience working at large biotech companies in USA and EU. With that experience, they’re able to recreate this innovation spirit in China.
MSM: Indonesia has very strong experience in vaccines. Taking this development expertise they have, they are moving towards developing biosimilars, starting with licensing and tech transfer and in parallel developing in-house capability of development. I’m eager to see how they take advantage of the trend and develop their talent as the government would like the industry to move in this direction. After Indonesia, Vietnam is another great country as a growth story: an existing vaccines industry that could become a platform for biosimilars development. But that’s in the very early stages. I also see Japanese interests in Indonesia and Vietnam establishing manufacturing capabilities
Regulatory concerns were also a major theme that emerged from the survey. Is the diversity of Asian markets a barrier for entry? How do developing drugs meet the regulatory requirements in all the different countries?
JZ: I think it is a barrier for them to access small markets. But in order to overcome that challenge we see a lot of collaborations – Taiwan and Japan, South Korea and Japan, or South Korea and China, ones like these are becoming increasingly common – especially in the field of biosimilars. That collaborative structure helps to address the different regulatory hurdles they may meet as they advance their development. I’m sure this trend will keep going, and we’ll most likely see more and more operations going in that direction and involving more countries.
MSM: As I mentioned earlier, Asia, in spite of its strong diversity…interestingly regulation is a key unifying factor. Indonesia has already started moving towards Halal compliance in Cosmetics, Beverages and Pharmaceuticals. PIC(s)* compliance is a strong binding factor, again unifying the region from a regulatory perspective.
There have been a lot of discussion about the economic slowdown in China. Has that affected the Asian markets in the pharma industry?
MSM: I personally don’t see the impact of the Chinese economic situation on pharmaceutical & Biotech segment in the region. If you ask me, I continue to see investment taking place in this sector with Chinese FDA raising the compliance bar.
JZ: In China, the construction industry is definitely slowing down. However, the biotech industry is where the Chinese government is putting a lot of effort. I believe the biotech industry will grow significantly in the next few years. Expanding health coverage for the entire population, that will drive adoption of biotech drugs, definitely in the near future.
*PICS:Pharmaceutical Inspection Cooperation Scheme