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Asia-Pacific On Course to be World's Fastest-Growing Healthcare Region

With lower costs, faster development and soaring economic growth, the Asia-Pacific region may be set to take a lead in the development of new drug therapies, according to industry insiders gathered in Singapore for the Phar East 2018 expo.

Photo: Getting better all the time: Positive diagnosis for Asia’s pharmaceutical future. (Shutterstock.com)
Getting better all the time: Positive diagnosis for Asia's pharmaceutical future.
Photo: Getting better all the time: Positive diagnosis for Asia’s pharmaceutical future. (Shutterstock.com)
Getting better all the time: Positive diagnosis for Asia's pharmaceutical future.

The pharmaceutical sector is changing fast. Despite new technologies, abbreviated development times and increasingly streamlined testing and approval procedures, the cost of new drugs is still on the rise. Commercial leaders in the pharma development field have primarily been in the West, with their focus very much on the rich healthcare markets of the US and Europe. This focus, however, may be shifting, as Asia's expanding middle classes boost the value of the region's healthcare market, a development that spurred much optimism at this year's Phar East, the annual Singapore-held pharma and biotech event.

Opening this year's expo, Lalit Baregama, General Manager of Global Business Development for Cadila Pharmaceutical, a leading Indian pharmaceutical company, was notably upbeat, saying: "In 2016, the global pharma market was worth US$1.1 trillion. Some 30% of that came from Asia, with the region accounting for two-thirds of all growth overall.

"At present, three trends in particular are driving the industry forward. Firstly, there are the mega-mergers, which are coming about partly in order to compensate for the huge cost of drug development. Over the past 10 years, about $350 billion worth of mergers took place in the industry.

"Secondly, there is the increasing focus on generic drugs. This has become a core growth strategy, with cost again the primary driver. Finally, there is the reshaping of the overall R&D strategy. Companies are now taking a more bespoke and autonomous approach, one that involves more outsourcing of services and more in-licensing of developments."

Largely endorsing Baregama's sentiments, Carolyn Ng, Vice-president of Vertex Ventures, a Californian life sciences venture-capital company, said: "It has never been as exciting to be in biotech and pharma as it is right now. In 2017, 46 drugs – a record number – were approved by the US FDA, the highest figure for 20 years.

"The cost of drug developments has, however, increased, with each now costing an average of $2.6 billion to bring to market. One thing that is truly driving the cost up is the high failure rate, with only one in 10 drugs under development ever obtaining approval and reaching the market.

"Since 2007, the value of the average investment in the biotech sector has tripled, yet the number of investments in such ventures has remained largely flat over the past 10 years. This shows that investors are taking significantly larger stakes in certain ventures, rather than backing more projects overall."

Seeing huge potential in the Asia-Pacific pharma sector in particular, Sora Lee, Value Architect and Alliance Management Vice-president of North Carolina-based Syneos Health, said: "The current market growth in the Asia-Pacific region is 19.9%. This is well above the 10% recorded for the US and Europe.

Photo: Phar East 2018: Asia’s leading pharmaceutical and biotechnology conference and trade exhibition.
Phar East 2018: Asia's leading pharmaceutical and biotechnology conference and trade exhibition.
Photo: Phar East 2018: Asia’s leading pharmaceutical and biotechnology conference and trade exhibition.
Phar East 2018: Asia's leading pharmaceutical and biotechnology conference and trade exhibition.
Photo: European pharma patents: Set to be outpaced by the innovations of many of their Asian counterparts.
European pharma patents: Set to be outpaced by the innovations of many of their Asian counterparts.
Photo: European pharma patents: Set to be outpaced by the innovations of many of their Asian counterparts.
European pharma patents: Set to be outpaced by the innovations of many of their Asian counterparts.

"In addition, this region offers rapid recruitment of patients and quality personnel, lower costs, and excellent infrastructure. All in all, Asia-Pacific is perfectly positioned for an extraordinary amount of growth in the very near future."

Maintaining that innovation within the pharma sector was accelerating far more rapidly than anyone had anticipated, Alfred Scheidegger, Founder of Zurich's Nextech Invest, said: "As well as the ever-increasing demand for effective drugs, three other factors are bringing about breakneck change – the pressure to approve drugs fast, the pressure to reduce costs and the intense competition at all levels of the industry.

"Overall, improved methodologies have led to drugs being developed with less time needed for trials – just three to six years. These trials also use fewer and better-selected patients, together with more incisive data that better predicts efficacy.

"Hundreds of companies, though, are at risk of becoming obsolete due to such technological changes. Sequencing the human genome, for instance, used to cost millions of dollars, but now it can be done for just a few hundred.

"The sources of innovation have also radically changed. In the 1980s, about 90% of R&D was undertaken by large pharma companies. Now about 60% is down to smaller, biotech firms, with only 30% coming from the pharma sector."

Despite all these changes, though, the primary focus of drug development on a global basis remains on oncology, which accounts for about half of all clinical trials currently under way. While acknowledging this, James Huang, Regional Medical Director of Oncology for the Asia-Pacific Region for Singapore-based Merck Pte, maintained that much of oncological research in the region was a little different, with lung, stomach, breast and colorectal cancers being more prevalent in Asia than in the West.

Outlining the structure of the local sector, he said: "The lead centres for oncology research in this region are China, Japan, South Korea, and Taiwan, with Singapore the only one not in North Asia. Each market focuses on the cancers common in their own countries – for example, oesophageal cancer is prevalent in north China, and gastric cancer in Japan and South Korea.

"There are also differences in the cancer biomarkers between the East and the West. Currently, the majority of new cancer drugs are being developed in the US or Europe, resulting in a significant lag before such drugs are available in Asia.

"Now, though, we're moving towards a situation where phase III clinical trials are also conducted in Asia, which is considerably reducing the time lag. On top of that, Asia is beginning to contribute to the global effort by initiating its own research programmes."

Inevitably, an overall growth in healthcare costs is directly related to any growth in the pharma industry. According to London-headquartered BMI Research, Asia's overall healthcare spending will increase dramatically over the coming years, rising to $2.27 trillion by 2026 from $1.69 trillion in 2017, a development driven by higher healthcare costs, the rising incidence of chronic diseases, a burgeoning middle class and an overall shift in the age demographic.

Photo: Growth model: With investment peaking, Asia’s healthcare facilities are very much on the rise.
Growth model: With investment peaking, Asia's healthcare facilities are very much on the rise.
Photo: Growth model: With investment peaking, Asia’s healthcare facilities are very much on the rise.
Growth model: With investment peaking, Asia's healthcare facilities are very much on the rise.

Phar East 2018 took place from 28 February-2 March at the Suntec Singapore Convention and Exhibition Centre. The event featured more than 120 speakers and 80 exhibitors.

Ronald Hee, Special Correspondent, Singapore

 

Content provided by Picture: HKTDC Research
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