Thailand pharmaceutical market update, 2013
Ames Gross of Pacific Bridge Medical provides an overview of the pharmaceutical market in Thailand.
Thailand’s pharmaceutical market was worth $4.4 billion in 2012, making it larger than any other market in Southeast Asia. It has already bounced back from the devastating floods of 2011, and is now growing at rates close to 9 percent per year. At this pace, the value of Thailand’s drug market should reach $9 billion by 2020.
Rising levels of wealth and health awareness are driving this growth. From 2002 to 2012, Thailand’s per capita GDP (in purchasing power parity) increased more than 60 percent. Spending on healthcare has gone from $75 per person in 2002 to more than $200 per person in 2012. Last year, Thais spent nearly $150 each on pharmaceutical products.
The expansion of Thailand’s government sponsored healthcare system has also increased demand for pharmaceutical products. Prior to the implementation of the Universal Coverage (UC) health insurance policy in 2002, just 70 percent of Thais were insured. Now, 98 percent of Thailand’s 69 million people have adequate healthcare coverage.
“From 2002 to 2012, Thailand’s per capita GDP (in purchasing power parity) increased more than 60 percent.”
Thailand’s drug market is dominated by foreign manufacturers. France, the United States, Germany and Switzerland provide almost half of Thailand’s drug imports. Leading foreign companies doing business in Thailand include Pfizer, Sanofi, GlaxoSmithKline, Merck and Novartis.
Altogether, there are 714 pharmaceutical companies with operations in Thailand. Almost 80 percent are Thai companies. Leading Thai drug manufacturers include Greater Pharma, Siam Pharmaceutical, Biolab and Thai Meiji. The Government Pharmaceutical Organization (GPO), under the Ministry of Public Health (MPH), is another major manufacturer. It produces about 300 pharmaceutical products, many of which are sold through public hospitals.
Hospitals purchase nearly 85 percent of all pharmaceuticals sold in Thailand, while drugstores purchase 15 percent. There are about 850 public hospitals and more than 550 private hospitals in Thailand.
Under the Drug Act of 1967, pharmaceutical products in Thailand are classified as either modern or traditional medicines. Modern medicines are “intended for use in the practice of modern medicine or the cure of an animal disease.” They are divided into three categories: new drugs, generic drugs and new generic drugs (which includes all generics manufactured after 1992).
Traditional medicines are drugs “intended for use in the practice of the traditional medicine.” They are listed in Thailand’s official pharmacopoeia of traditional medicines. Controls on traditional medicines are significantly less stringent than controls for modern medicines.
A proposal to change this system is currently under discussion. If passed, revisions to the Drug Act would reclassify drugs into three categories: prescription only drugs, pharmacy dispensing drugs and household remedies.
“Now, 98 percent of Thailand’s 69 million people have adequate healthcare coverage.”
The Drug Control Division (DCD) of Thailand’s Food and Drug Administration (TFDA) is responsible for the licensing, registration, inspection, surveillance and adverse event monitoring for all drugs and drug companies in Thailand. Before a company can register a pharmaceutical product, it must hold at least one of the following licenses. These include:
• A license to manufacture modern or traditional medicines
• A license to import modern or traditional medicines
• A license to sell modern or traditional medicines
• A license for the wholesale of modern medicines
Applicants must undergo a facility inspection before the above licenses are granted. Manufacturing facilities must be GMP compliant. In addition, applicants for manufacturing and import licenses must satisfy the following requirements:
• They must be at least 20 years of age and a resident of Thailand.
• They must have sufficient assets to establish and operate a business.
• They must have the facilities to produce, sell, import or store drugs in a way that maintains proper drug quality.
• They must not use a trade name similar to the trade name of another active license holder.
• They must not have any convictions for narcotics or drug related offenses.
Manufacturing and import licenses are valid from January 1 to December 31, and they must be renewed annually. The cost of these licenses is $340.
Only authorized license holders may register traditional and modern medicines in Thailand. Registration requirements vary by drug type. For modern medicines, requirements include:
• New drugs – Applicant must submit information on quality, safety and efficacy, including stability studies and process validation. Since 2009, applicants have been permitted to follow the ASEAN Common Technical Requirements and Dossier when preparing their applications.
• Generic drugs – Applicant must submit dossiers on product information, product manufacturing and quality control.
• New generic drugs – Applicant must submit a complete set of the generic dossiers, plus data from bioequivalence studies and literature supporting safety and efficacy claims.
Registration costs $70 per product, and licenses do not currently require renewal. Pending legislation would require the renewal of registration licenses after five years.
“In Thailand, only drugs that are deemed “household remedies” may be advertised directly to consumers.”
In Thailand, only drugs that are deemed “household remedies” may be advertised directly to consumers. All other drugs must be marketed through patient education, basic healthcare education and activities that “create disease awareness.”
All promotional materials must be approved by the TFDA before they are disseminated. Advertisements must be truthful and offer no exaggerated claims. In addition, they must not contradict local traditions or beliefs, defame competing products, encourage activities contrary to the law, or encourage patients to consume the product more than is clinically necessary.
Information required to appear in pharmaceutical advertisements includes:
• The product brand name
• The TFDA approval number
• The name and address of the manufacturer or distributor
• The content of the active ingredients per dose
• The names of ingredients known to cause adverse reactions
• Approved therapeutic uses
• Dosage form and/or regimen
• Side effects
• Major interactions
Foreign companies in Thailand
Thailand has a mature medical training network with experienced, English speaking investigators. This – along with Thailand’s large, treatment naïve population and tropical setting – has made the country an attractive destination for clinical trials involving rare or tropical diseases. In 2009, for example, Sanofi launched a 4,000 patient study in Thailand to research its dengue fever vaccine.
“…the country [is] an attractive destination for clinical trials involving rare or tropical diseases.”
Other foreign companies have recently set up or bought out rival manufacturing facilities in Thailand. In August 2012, Japan’s Fuji Pharma paid $53 million for a Thai manufacturing facility owned by Swiss CRO DKSH. Under the terms of the agreement, Fuji took over the plant’s customer base, which consisted of more than 30 healthcare and pharmaceutical companies. And in January 2012, Watson Pharmaceuticals inherited several facilities in Thailand after buying Ascent Pharmahealth from India’s Strides Arcolab. The total cost of that deal was $392 million.
Merck, which has long done business in Thailand, decided to use Thailand as its ASEAN distribution hub in January 2011. Merck’s Thai operations will distribute its products to Cambodia, Myanmar and Laos after the launch of the ASEAN Economic Community in 2015. Merck Thailand will also distribute pharmaceutical products to southern China and Vietnam.
Registering pharmaceuticals in Thailand can be a complicated process. Updated requirements are rarely written in English. However, those companies that do make the push to enter Thailand’s pharmaceutical market will find many opportunities.
About the author:
Ames Gross is president and founder of Pacific Bridge Medical, a Bethesda, Md.-based consulting firm that helps medical companies doing business in the Asian market (www.pacificbridgemedical.com). A recognized national and international leader in the Asian medical markets, he founded Pacific Bridge Medical in 1988, which has helped hundreds of medical companies with business development and regulatory issues in Asia.
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