National pharmaceuticals expand in Southeast Asia

Chinese pharmaceutical companies are intensifying their efforts to expand their business in Southeast Asia to take advantage of favorable regulatory approval policies and growing market opportunities.

Apart from traditional destinations such as the United States and Europe, Southeast Asia is becoming a new attraction for Chinese pharmaceutical companies seeking global expansion.

On April 12, Jiangsu province-based Chiatai Tianqing Pharmaceutical Group signed an agreement with Singapore-based Specialized Therapeutics, giving the latter the exclusive right to commercialize a new anti-PD1 antibody in Australia, New Zealand, Papua New Guinea and throughout Southeast Asia.

In March, Shanghai-based Junshi Biosciences awarded the rights to commercialize its monoclonal antibody in Southeast Asia to Excellmab, a joint venture of Rxilient Biotech.

With years of experience in Southeast Asia, Kexing Biopharm signed agreements with Hangzhou-based Haichang Biotech, Mabpharm Ltd and Jiangsu-based TOT Biopharm to help expand its business in Southeast Asia.

According to market research firm CPhI, the pharmaceutical market in Southeast Asia totaled $40 billion in 2020, and the market will grow at a CAGR of more than 11 percent between 2021 and 2025.

“Increased healthcare consumption and clinical demand due to aging issues have made Southeast Asia a bigger market for Chinese pharmaceutical companies,” said Wu Yue, an analyst at market data watcher Anjiguancha.

The general ability of “people to afford better medical products and solutions in Southeast Asia is catching up, thanks to better public health insurance services, a stronger economy and a larger high-income group.”

“Since local pharmaceutical companies cannot meet the demand, companies from other countries, including China, have a chance,” Wu said.

Southeast Asian countries have been strengthening public health insurance and healthcare system in recent years, raising the threshold for access to medicines and streamlining regulatory approval procedures.

Vietnam, for example, announced plans in February to improve its biotech industry.

“Going global has become an inevitable trend for pharmaceutical companies. Although the US remains an available market for Chinese innovative drugs, the approval process is becoming more stringent. Therefore, many pharmaceutical companies turn to the Southeast Asia, where the outlook is also bright, with its vast demand potential,” Wu said.

Lai Yankun, who is in charge of overseas cooperation at Beijing-based Sinocelltech Ltd, said, “With the Regional Comprehensive Economic Partnership agreement, medicines made in China, especially biopharmaceuticals, have shown high profitability in Southeast Asia Chinese pharmaceutical companies are highly competitive globally.

“However, most of them have just started their forays into the Southeast Asian market. They need more time to find a solid base for expansion.”

Wu said: “Businesses should be more familiar with the relevant laws, regulations and registration requirements in destination countries and consider the right partners to go global. Furthermore, given the size of the single market of southeastern countries Asia is not that big, how to efficiently cover the whole region should be well considered.”