Asia Pacific Will Supplant US-Europe as Pharma Center
by Richard Daverman, PhD
ChinaBio Today
Findings of New PricewaterhouseCoopers Study
A new PricewaterhouseCoopers study posits that Asia-Pacific countries will eventually be the center for global biopharma. The balance will migrate away from the US-Europe axis that currently drives the sector.
Multinational corporations are investing money into China, India and Singapore, lured by the size of their markets as these large population countries become more affluent and demand western-style pharmaceuticals. At the same time, Asia-Pacific biopharmas are buying up assets to increase their own penetration of international markets.
Asian biopharma start-ups have a more difficult time of it than their counterparts in the West because they do not have the well-established network of venture capitalists for funding, and they also lack a stock market for young companies, such as represented by the AIM market in London.
Multinationals are looking at Asian Pacific countries as more than just markets. If the multinationals are going to sell in the East, they must also have development operations there. Once seen only as an inexpensive place to manufacture drugs, Asia Pacific has now become a place to do innovative research inexpensively.
A survey of executives from multinational pharmaceutical companies shows that concerns still exist about IP protection and regulatory standards in these fast-growing markets, despite recognition that much progress has been made.
To entice multinational corporations to locate inside their borders, Asian countries offer grants, incentives and infrastructure support.
PricewaterhouseCoopers released its report, entitled "Gearing up for a Global Gravity Shift: Growth, Risk and Learning in the Asia Pharmaceutical Market," after conducting interviews with senior executives in 93 multinational companies and 92 Asia-based domestic companies.
Here are some of the findings:
PricewaterhouseCoopers believes that the emerging model for biopharma will mean that biopharmas will not abandon the US-Europe, but put more and more of their operation in the East. This has been the model for other industries, such as textiles.
This transition to the East will be aided by a breakdown of the blockbuster model, which has been the backbone of big pharma for the past 15-20 years. The blockbuster model has emphasized sales and marketing while paying less attention to R&D. Needing to do more R&D, but constrained by the decline of margins because of generics, big multinational pharma will increasingly turn toward doing its R&D in Asian countries.
ChinaBio Today is a regular contributor to BioHealth Investor
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ChinaBio Today
Findings of New PricewaterhouseCoopers Study
A new PricewaterhouseCoopers study posits that Asia-Pacific countries will eventually be the center for global biopharma. The balance will migrate away from the US-Europe axis that currently drives the sector.
Multinational corporations are investing money into China, India and Singapore, lured by the size of their markets as these large population countries become more affluent and demand western-style pharmaceuticals. At the same time, Asia-Pacific biopharmas are buying up assets to increase their own penetration of international markets.
Asian biopharma start-ups have a more difficult time of it than their counterparts in the West because they do not have the well-established network of venture capitalists for funding, and they also lack a stock market for young companies, such as represented by the AIM market in London.
Multinationals are looking at Asian Pacific countries as more than just markets. If the multinationals are going to sell in the East, they must also have development operations there. Once seen only as an inexpensive place to manufacture drugs, Asia Pacific has now become a place to do innovative research inexpensively.
A survey of executives from multinational pharmaceutical companies shows that concerns still exist about IP protection and regulatory standards in these fast-growing markets, despite recognition that much progress has been made.
To entice multinational corporations to locate inside their borders, Asian countries offer grants, incentives and infrastructure support.
PricewaterhouseCoopers released its report, entitled "Gearing up for a Global Gravity Shift: Growth, Risk and Learning in the Asia Pharmaceutical Market," after conducting interviews with senior executives in 93 multinational companies and 92 Asia-based domestic companies.
Here are some of the findings:
58% of multinational pharma execs said the center of gravity is shifting to Asia Pacific and 62% of Asian pharma execs agreed;
75% of multinational pharma execs remain worried about IP and legal risks;
74% of multinational companies and 79% of Asian companies have seen an improvement in IP over the past five years;
65% of Asian companies consider global growth important;
33% of multinational companies will invest in Asia during the next 12 months, either by establishing relationships with their Asian counterparts or building up their own facilities; and
34% of Asian companies are looking for acquisitions.
PricewaterhouseCoopers believes that the emerging model for biopharma will mean that biopharmas will not abandon the US-Europe, but put more and more of their operation in the East. This has been the model for other industries, such as textiles.
This transition to the East will be aided by a breakdown of the blockbuster model, which has been the backbone of big pharma for the past 15-20 years. The blockbuster model has emphasized sales and marketing while paying less attention to R&D. Needing to do more R&D, but constrained by the decline of margins because of generics, big multinational pharma will increasingly turn toward doing its R&D in Asian countries.
ChinaBio Today is a regular contributor to BioHealth Investor
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6:38 PM
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