Outside of the main markets in China, Japan and India in Asia are closely followed plays in Indonesia, Thailand, Malaysia and Vietnam with the last two among 12 nations that signed the Trans-Pacific Partnership (TPP) trade pact.
With nearly half a billion people, according to figures from the CIA World Fact Book, the four Southeast Asian nations represent the main slice of the geographic region that also includes financial hub Singapore, the Philippines and frontier markets such as Laos, Cambodia and Myanmar.
Indonesia, home to 255 million people across a vast archipelago of thousands of islands, launched a phased universal healthcare insurance program in 2014 that has increasingly shaped demand for drugs that proved a challenge to meet under local partner manufacturing requirements.
That looks set to change in 2016 with Indonesia looking to ease rules on foreign investment in domestic drugmakers and on import guidelines to address growing generic and active pharmaceutical ingredient shortages.
Indonesia imports about 90% of its API needs, mostly from China and India, with shortages attributed to growing costs from a weaker Indonesian rupiah. But investment to plan for, and meet, changing demand is also a key factor.
The Indonesian Pharmaceutical Association's group secretary, Kendrariadi Suhanda, said in April last year that domestic industry needs investments of more than $1 billion to cut dependence on imports of raw materials.
Fast Market Research, a market research publisher, said late last year that "addressing this issue will see local firms move to develop their own capability in producing pharmaceutical ingredients or to source inputs from Indonesia-based manufacturers."
South Korea's Genexine in November joined up with Indonesia's top drugmaker, Kalbe Farma, to make biopharmaceutical products. At the time, the Indonesian company said it was also in talks with China's Shandong Kexing Bioproducts and Japan's Daiichi Sankyo on possible collaborations.
|Indonesian President Joko Widodo|
Of course on the flip side, many regional companies and multinationals want to import and sell drugs directly in Indonesia, a prospect that could come eventually if President Joko Widodo's statements on having Indonesia join the TPP materialize.
Thailand, with a population of 67 million, has been on the radar because of the deep political divisions under a military-led government. That puts the reform efforts for state-run Government Pharmaceutical Office in limbo, including plans to end a practice that sees state hospitals spend at least 60% of their medicine budgets on its products.
Among the TPP nations, Vietnam, a nation of 94 million people, is now being watched for the outcome of a power struggle between reformers led by current Premier Nguyen Tan Dung and current general secretary Nguyen Phu Trong that may conclude this month in a secret ballot among party leaders.
"There are significant service gaps in the market that will provide revenue earning opportunities to companies looking to invest in the sector," Fast Market Research said in late December. "These stem from the underdeveloped state of the public health sector characterized by overcrowded hospitals and patients with limited access to advanced medical treatments."
Concern has grown that wider access to manufacture and sell products directly will be missed with rumblings among the diplomatic community that a defeat for the reformers could even imperil the country's standing in the TPP.
The research publisher said spending of pharmaceuticals in the country touched nearly $4.2 billion in 2015, up from $3.8 billion in 2014 with overall healthcare spending at $11.7 billion in 2015.
For Malaysia, a country of 30.5 million people, a sharp drop in oil prices will hit public health spending while a weaker ringgit currency will make drug imports more expensive.
Fast Market Research said spending on pharmaceuticals fell in 2015 adjusted for the exchange rate against the dollar, to $1.97 billion from $2.2 billion in the previous year and that trend will continue into 2016. Overall healthcare spending in 2015 reached $11.5 billion.
Still, the country benefits from investment in medical device manufacturing and attempts to join the vaccine and biotech manufacturing arenas through government-sponsored trade zones.