America: beware of Asia double edged sword

By Kirsty Barnes

- Last updated on GMT

Related tags: Pharmacology

American drug manufacturers are playing with a double-edged sword
in Asia, warns a recent report.

Over the past few years the pharma industry has been shovelling out work that it considers "non-core"​ to Asia by the bucket load and the region has become established as a major drug product and ingredients manufacturing hub as well as a popular destination to offshore many other functions such as IT and data management. More recently though, Asia has been moving up the pharma food chain, carving out a place for itself in conducting services in the more traditionally 'core' clinical trials and research and development (R&D) phases, and the pharma industry is responding, lured by the promise of faster turn around times and lower costs. However, according to a report by PricewaterhouseCoopers (PWC), several Asian drug companies are no longer satisfied with simply serving the rest of the world as contract manufacturers - instead they are vying to become the global pharmaceutical companies of the next generation. PWC points out that the danger for the US, where most of the world's global drug companies are headquartered, is that while for now the Asian market is providing high-quality, inexpensive labour and an increasingly favourable market in which to sell pharmaceuticals; in the future Asian pharmaceutical companies may indeed present stiff competition in the world marketplace, armed with the knowledge, capabilities and experience that they are building up through their dealings with the west. "If the majority, or at least a large portion, of fundamental intellectual property creation moves to Asia, the West's dominance and ownership in scientific breakthroughs will rapidly decline",​ PWC warned. For now though, home grown Asian drug firms still have a long way to go in their quest to compete alongside the big guns on the global stage, especially since at present, there remains great concern in the west over the integrity of drugs made in Asia. PWC said that a "substantial majority"​ of US consumers that it surveyed said they were "confident"​ that drugs made in the US are safe, while they ranked India and China as last and second to last, respectively, for drug safety out of 10 countries: the US, Switzerland, Japan, England, Germany, China, Israel, Denmark, France, and India. This indeed may be down to a general public misconception about foreign-made medicines, since many of the drugs and drug ingredients sold on the western market are actually already made in China and India. Still, with enough education and improvement in regulation by Asian governments, Asian drug manufacturers may have a strong market in the US, which dominates the global scene, said the report by PWC, titled: "Top eight health industry issues in 2008​." Even without a large penetration in the US market, Asian drug companies are standing in front of huge potential right in their own back yards, with the region's substantial ageing population and an increasing prevalence of chronic "western​" diseases expected to fuel the drug market demand. As such, PWC has dubbed Asia as the "land of golden opportunities",​ predicting that it will become the largest pharmaceutical consumer and pharmaceutical producer in the world by the middle of the century, led by India and China. China's pharmaceutical market currently ranks in the top 10 markets and is estimated to reach number one by the middle of the century. Similarly, India's pharmaceutical market is 13th in the world but is anticipated to grow 80 per cent by 2009. Meanwhile, Singapore also has an established pharmaceutical industry and South Korea, the Philippines, and Thailand are also investing increasing amounts in their healthcare scenes.

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