Pharma market bets on ASEAN in focus ahead of economic pact

At the end of 2015, the Association of Southeast Asian Nations (ASEAN) will launch an economic union in a region that has already seen a slew of device and drug companies contemplate, start or expand hubs in Singapore to sell into nearby markets.

But reaching into ASEAN nations such as Thailand, Myanmar and Vietnam will require "different speeds" for companies as they weigh the potential of a combined market of $2.6 trillion in GDP, according to a company that has unique insights--Swiss-based DKSH, which has a 150-year history in Asia and that to date still collects cash from pharmacies in many countries.

"ASEAN in general is a great opportunity," Andrew Frye, global head of Business Unit Healthcare for DKSH since the start of 2015 and a former executive with Abbott Laboratories ($ABT), told FiercePharmaAsia in a telephone interview. "But each country is different and there is no single recipe."

DKSH's Andrew Frye

Frye noted that as economic integration approaches, DKSH said more strategies are possible in Asia to advise healthcare companies on marketing, sales, distribution, logistics, and specialized value-added services, especially with new players on the scene.

"Big Pharma comes to Asia as broadly as possible, while regionally companies from [South] Korea look to expand, and then there are new biopharma that start from the beginning," Frye said.

But even in the case of Big Pharma, local manufacturing rules in Vietnam or the heavy presence of a state-owned drugmaker in Thailand make it necessary to understand market entry beyond the volume and macroeconomic numbers and then make choices, Frye said.

Several developing nations in Asia are also moving to universal health coverage or, like Vietnam and Thailand, are tweaking offerings to contain costs. As well, in a market with a combined population of more than 600 million, people expect higher quality healthcare products and services from governments.

The pressure of cost and services and access to newer therapies is one that will play out in ASEAN at a possibly faster pace under integration than previously, Frye said, even as national rules on manufacturing and regulatory approvals can make business complex.

"Even with [ASEAN] economic integration there will still be nontariff barriers and other hurdles," Frye said. "On the ground, that translates into local knowledge and sometimes size is not as important as what is possible."

Still, ASEAN economic integration includes harmonization talks for drug and medical devices dossiers to largely contain a standard set of information--potentially leading to a single format as regulatory staff are trained in less developed markets. There has even been talk of a European Medicines Agency-style regulatory body. 

But for companies already in the region, the list of challenges includes multiple dossiers by country, foreign exchange risk, regulatory approvals and the need to understand culture and languages--and those issues won't disappear overnight with economic union.

"We have 70 regulatory staff in the region and more than 4,200 sales and marketing teams in the countries we operate in, and that expertise is crucial for us in developing an access plan," Frye said.

Frye also added that as software tracking systems become more sophisticated, the ability to gather data in far-flung markets like Myanmar gets enhanced--creating new insights into possible sales and distribution avenues.

"Sometimes getting a new drug into a country is not the biggest problem--there has to be medical knowledge on hand to effectively treat patients," Frye said, adding that the company at any one time can have as many as 100 pharma audits per year to validate processes on delivery and other criteria.

"Data routinely gathered in developed markets by firms and governments is uneven in many ASEAN countries, and in places much of the business is still in cash."

- here's the DKSH website