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Feature

Finding the Next Asian Pharma Sensation

Posted on: 19 Mar 04
Finding the Next Asian Pharma Sensation

Summary

Japan has always been considered the technology pioneer of Asia, however, in recent years a number of other countries in this region have placed significant emphasis on industrial and technological performance in order to improve their own world position. One industry that is developing rapidly in the region is the pharmaceutical industry.

Improving conditions


Japan has always been considered the technology pioneer of Asia, however, in recent years a number of other countries in this region have placed significant emphasis on industrial and technological performance in order to improve their own world position. With lower labour and capital costs, coupled with a desire to transform themselves into global competitors, countries such as India, China, South Korea and Singapore have made great strides forward. Unfortunately, the economic crises in recent years have caused several setbacks, some of which have resulted in a reassessment of growth forecasts within Asia. Nevertheless, some countries remain in a strong position to take advantage of opportunities for improved industrial performance and international trade.


 Asia’s biopharmaceutical potential


At first glance, the Asian biopharmaceutical sector has many advantages. There is certainly a wealth of scientific talent in the Asian region - many researchers have received their training in the US and/or Europe and have worked for major pharmaceutical companies. However, neither scientific excellence alone, nor the availability of funds will be sufficient for local Asian companies to confront and compete with the immensely powerful and experienced foreign competition.


Furthermore, although the pharmaceutical industry is a technology sector that shares much in common with other types of industry, it also has many differences, thus excellence and progress by Asian countries in areas such as IT cannot necessarily be mirrored in the field of drug development.


The hurdles of drug development


Developing a drug costs on average US$800 million and only 15% of new drugs entering development actually reach the market (1, 2). Accordingly, only those companies that thoroughly understand the risks involved in drug development, and how to deal with them in the context of the national and global industrial environment, will be successful.  As multinational companies already have a track record in R&D, they are in an advantageous position compared to their emerging Asian counterparts. It is the few Asian companies that have taken these difficulties of drug development into account - and have a realistic assessment about what they can achieve - that are showing considerable promise.


Another way to expand and make improvements is through collaboration and joint ventures. Several Asian firms are involved in international partnerships and hope that it will not only generate revenue, but will also allow them to gain experience of innovative R&D. For the moment, the majority of Asian companies have been involved in bulk drug manufacture or generics as this requires comparatively little upfront investment. Given that the multinationals are now well established in Asia, few local companies would want to (or indeed be able to) compete with them, and therefore have continued with their ongoing generic activities.


Asian promise


Although a number of Asian companies are active at the discovery level, those showing the greatest international promise in terms of new drug development are based in India and in South Korea.  Although heavily involved in generics, Indian companies such as Ranbaxy, Dr Reddy's Laboratories and Cipla also have emerging new drug pipelines. A number of high profile drugs have come off patent and this has created an opportunity for Indian companies to develop generic versions for sale in the US and European markets. These moves have enabled them to gain valuable experience of the regulatory and commercial environment within these major markets. With the revenues gained from generics, many companies have now embarked on researching and developing innovative products, as well as in-licensing; but for the foreseeable future their main impact will continue to be in the area of generics.


Although the national market is dominated by multinationals, there is considerable domestic pharmaceutical activity in South Korea. IMS Health reported that in 2001, three of the top ten South Korean pharmaceutical products were marketed by local firms (3).


Although most of South Korea’s companies are involved in the manufacture of generics, certain companies have invested in R&D for novel drugs. In 2001, Daewoong Pharmaceuticals launched Easyef (epidermal growth factor) for the treatment of diabetic foot ulcers (4). Daewoong Pharmaceuticals is involved in a number of collaborations with international companies and has shown interest in pursuing opportunities in foreign markets. Another South Korean company, Choongwae, has also benefited from implementing an ambitious strategy (5). In 2002, Choongwae launched Balofloxacin (Q-roxin), an orally active fluoroquinolone antibiotic (5). The compound had originally been developed by Chugai and Ciba for the treatment of respiratory infections, but due to a lack of efficacy and the changing focus of Chugai’s R&D, the project was discontinued in 1995 (6). Following Phase II trials, Choongwae bought the rights for the drug and successfully carried out Phase III trials. Balofloxacin was approved by the Korean FDA in December 2001 for urinary tract infection (6). These examples demonstrate that it is possible for Asian companies to overcome the hurdles they encounter and succeed in innovative R&D.


Future prospects


Presently, the entire global biopharmaceutical sector faces a variety of regulatory, economic, political, social and technical pressures. With their years of experience, the western and Japanese companies are much better placed to be prepared for such pressures in comparison to the emerging Asian competitors. This does not mean that new Asian companies cannot make the transition and become productive and profitable drug development organisations, merely that the time course will be lengthy and that there will be considerable attrition along the way before viable entities emerge. Only when these companies form a critical mass will it be possible to make real predictions about the way ahead for the Asian biopharmaceutical industry.


References




  1. Outlook 2002. Tufts Center for the Study of Drug Development. http://csdd.tufts.edu


  2. Kermani F and Findlay G (2000). The Pharmaceutical R&D Compendium.  CMR International. http://www.cmr.org




  3. Kermani F & Van den Haak M (2002). Drug development 2001. CMR International.  http://www.cmr.org


  4. Sculthorpe P. and Lowman D. New Medicine Launches 2002. CMR International (2003); available at http://www.cmr.org


  5. Alksne L.  (2003). Balofloxacin Choongwae. Current Opinions in Investigational Drugs. 2003 Feb;4(2):224-9.

Dr Faiz Kermani and Dr Rebecca Gittins

Last updated on: 27/08/2010 11:40:18

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