International drug firms are increasingly turning to Taiwan for the low-cost made-to-order processing of active pharmaceutical ingredients (APIs), according to the Taiwan External Trade Development Council (TAITRA).
Investment in improving production processes in the industry is now starting to deliver promising returns for the country - once thought of only as a destination for high-tech manufacturing, said the organisation.
"The result has seen Taiwan grabbing orders from multinational drug manufacturers," it said.
In particular, the Taiwanese government has tipped the biotechnology sector, as a "star industry" for potential for growth.
"Several Taiwanese biotechnology companies have sought to become the middlemen in the production of drugs, choosing to focus on producing the ingredients necessary to create these drugs, instead of investing millions in the research, development, and production side of things," said TAITRA.
"This focus on the APIs allows for lower input and production costs, while also letting the companies concentrate development on specific ingredients, thereby improving the production process."
Leading the way in this arena is ScinoPharm, which now counts seven of the top ten brand drug manufacturers among its clients, where it receives primitive technologies from the drug developer and helps them refine the production process.
Pfizer CentreSource recently announced its has decided to outsource the manufacture of some of its APIs to two Asian contract manufacturers, one of them being ScinoPharm, the other Shanghai Pharmaceutical Co. of China, in order to "enable more cost-efficient API production."
Pfizer said it will transfer the late-stage processing of 18 steroid API and intermediate products to the new manufacturing partners in three phases over the next four years and the two firms are now adding manufacturing capacity to deal with the new contracts.
ScinoPharm is also involved in generic API production, where it looks at products that have high market value, yet are hard to manufacture due to intellectual property (IP) control, and then five to seven years prior to the patent expiring, ScinoPharm uses its own process to develop the same formula, thus creating new IP, and then passes this formula to generic makers.
The company said it is also on standby to produce the "the full amount of Tamiflu needed for Taiwan" in the case of another bird flu scare if Roche - who currently holds a contract with the Taiwanese government to supply five per cent of the island's population with the drug - cannot meet its requirement.
Amid the bird flu scare last year the Taiwanese government turned to the firm to bypass the patent on the drug and develop it in a short time and after a $1m (€800,000) investment over several months, ScinoPharm had created nearly 30–40Kg of the drug (1 dose=1g/person).
The company now has an R&D staff of 150 and operates from a $125m facility that was built 14 months ago using a government grant from the Taiwan Development Fund.
According to ScinoPharm CEO and president Dr. Jo Shen, "the same facility would cost four times as much abroad."