SOUTHEAST ASIA HEALTH AND PHARMACEUTICAL MARKET OVERVIEW
Healthcare has been designated a priority sector for the ASEAN countries for several years. With a population of more than 600 million, this market represents another rapidly growing emerging market. In general, the market has become more attractive in recent years as wages have risen and country governments have made healthcare sector growth a priority. Country governments are actively courting investments in the sector, and opportunities for contract manufacturing abound. Regional sales of pharmaceuticals in Asia have more than doubled from $97 billion in 2001 to $214.2 billion in 2010. It is predicted that sales will reach $386 billion by 2016 (1).
In contrast, the Philippines' pharmaceutical industry has grown more slowly in recent years. The Philippines also has a large population (92 million according to its 2010 census) and is experiencing similar trends in the rate of chronic disease as Indonesia. But since the passage of the Universally Accessible Cheaper and Quality Medicines Act of 2008, the market for pharmaceuticals has noticeably changed. The law affected the market in several key ways. First, it set a maximum drug retail price that represented a 50% decrease for more than 100 drugs. It also accelerated the process for bringing generic drugs to market and disqualified drug makers from being able to patent new uses of previously existing drugs.
Other countries in the region possess unique characteristics that pharmaceutical companies should understand as well. Singapore, Brunei, Malaysia, and Thailand, for example, all have greater GDP per capita than Indonesia or the Philippines. Even though these countries contain fewer people than some of the others in the region, their demographics (e.g., higher incomes and increased life expectancy) may still make them attractive markets. In addition, characteristics like the fact the Singapore promotes itself as a center for medical tourism can impact the market as well.
Despite all the market potential, Asia remains a fiercely competitive region for pharmaceuticals. Part of the source of competition comes from the highly fragmented industry with literally thousands of smaller manufacturers. Many of the larger firms have been able to grow their market share partly through intensive competitive pricing (1).