The Hindu Business Line : `India key geography in Asian pharma growth story'

New Delhi May 21 India along with China and Singapore are the key focus geographies for pharmaceutical companies looking to expand their business in Asia. The region is pitched to become the centre of global pharma business, replacing North America and Europe.

According to a PricewaterhouseCoopers study on the Asian pharmaceuticals industry, which sought the views of 185 senior representatives of both domestic and multinational companies in Asia, 58 per cent of participating companies believe Asia will soon outdo North America and Europe in importance.

With a $ 7.3 billion market growing at 17.5 per cent, India is to be one of the key benefactors of this shift in focus. Outsourcing is likely to be further explored outside of drug manufacturing services, with R&D and clinical trials being looked into as areas of cooperation.

Since India became TRIPS compliant and formally recognised products patent in 2005, several international pharma giants have collaborated with Indian companies on drug development and R&D projects. These include Dyax, Merck KGA, Eli Lily and Glaxo SmithKline.

The IPR pull

Seventy four per cent of multinational companies and 79 per cent Asian companies acknowledge that the environment of Intellectual Property Right (IPR) protection is much improved in Asia, although it continues to a bit of a concern. The new faith in Indian IPR laws and its implementations is likely to help the clinical trial market (currently estimated at $120 million) and contract manufacturing (currently at $350 million) to grow to $1 billion dollar business each in just three years.

India, with 85 API and formulation plants, also holds the distinction of having the highest number of US Food and Drug Administration-approved facilities outside of the US.

The increase in Asian business is to come from both domestic companies who have been mustering up resources to go global, and multinational companies planning to extend their presence in the region.

Looking to grow

At least a third of the multinational companies participating in the study have plans to expand business in the region, either through acquisitions or by developing their own Greenfield sites within the next 12 months. And a third of Asian companies are looking to acquire pharmaceutical companies.

However, capital constraints could come in the way of global ambition warns the study, pointing out that there are few specialised venture capital funds (VCF) that support Asian start-up biopharmaceutical companies.

And these VCF's do not have access to a supportive stock market environment, such as in a junior market like London's Alternative Investment Market.

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