Asia’s pharmaceutical sector - how to achieve successful globalisation Words by JinHee Kang, senior regulatory expert - biosimilars, ELC Group
Asia’s pharmaceutical sector is experiencing significant growth following recent merger and acquisition activity of pharmaceutical companies, aimed at exploiting the intensity of competition in the Asian pharmaceutical market. It is truly a new era of globalisation for Asia’s pharmaceutical companies looking to expand their markets internationally.
There are diverse ways that pharmaceutical companies are adopting for globalisation, such as US/EU marketing authorisation (MA) acquisition, dossier and technology transfer, new formulation development complying to US and EU regulations in globalised R&D labs, and US or EU-based local pharmaceutical manufacturing plant acquisition.
Each option has its pros and cons in terms of cost effectiveness, transaction speed and so on, therefore various factors must be considered when deciding which business model best suits an individual pharmaceutical company. Taking an example, MA acquisition is the fastest way to hold an EU/US MA license and to put a company’s own manufactured product in the EU/US markets after the variation application of manufacturing site. However, GMP readiness can be a hurdle in obtaining variation approval for site change, and the market case is often not strong as most of the available MAs for product sale already have many generic competitors in the market. MA licensing seems to be most beneficial when the company is ready to acquire large volumes of MAs, and to increase production yield and reduce conversion costs, in order to compete with already available players in the market and occupy a good position in the market.
Dossier and technology transfer provides a major benefit in terms of learning about the high standards of technical and regulatory dossier creation and compilation, as well as regulatory requirements in the US and EU, plus the ability to take advantage of high quality technology transfer. Through on-site technology transfer, companies will host formulation and analytical experts at their site, where the scientists and technicians can be trained by foreign experts in their own workplace. However, this will take more time than MA acquisition because it requires going through the whole regulatory procedure for product registration with a company’s own exhibit batch and data in the registration dossier.
New formulation development is one of the business models that typically involves the longest time-to-reach the market, but is probably the most beneficial in building up a good business case because it can be scratched from product selection stage while reviewing the market case in the US and EU.
The final option is US or EU-based local pharmaceutical manufacturing plant acquisition, which is more popular in China at the moment. This route to market also takes a long time and requires extensive due diligence activities from the perspectives of quality, patent landscape, finance and profit/loss, but it will often provide safer landing into the US and EU markets by leveraging a local company’s credit and transition of peers.
From previous experience, I have found many local Asian companies struggling with commercialisation and experiencing market positioning failure in the US and EU after huge investment, due to the lack of local market intelligence, as well as weak networks with local distributors. A sound commercialisation strategy should be established from the beginning when companies are targeting an expansion of their global presence. To overcome this challenge, strategic alliances with local partners in the EU and US are highly important in order to make a successful transaction at the commercial stage and to make the right product selection.
To succeed in globalisation, it is very important to work together with US and EU-based regulatory and market intelligence partners who can advise and consult from end-to-end, including – but not limited to – intellectual properties, formulation development, clinical development, regulatory strategy development, manufacturing site’s registration strategy, GMP, and marketing strategy development. This level of expertise is invaluable for companies seeking to harvest real fruit from sales after the long journey of developing and registering drug products in accordance with the standards of highly regulated markets such as the US and EU.