Joe Panetta, president and CEO of BIOCOM, recommended taking advantage of Asia’s strengths to conduct innovative research and development in that region. Although China, India, and Singapore are the trendiest Asian destinations, they’re hardly the only players. “Japan and Australia have mature pharmaceutical industries and markets; and Korea, Taiwan, Malaysia, and Thailand are seeing momentum. Indonesia and the Philippines are good as cost-reduction strategies,” but need to adapt global standards, according to Peter J. Claude, advisory partner, PriceWaterhouseCoopers.
Peter Beattie, former premier of Queensland, Australia, referenced a recent McKinsey Report that listed Korea as a hot spot for stem cell work “ahead of, or on par with, the rest of the world.” Korean representatives, in a separate session, cited the beginnings of ventures between local and international firms.
Asia is not homogeneous and, Claude stressed, “the choice of location is crucial.” For example, Cambodia is low-cost, but is very risky. Taiwan has a strong IT and medical-device culture, and the government is now offering incentives to biotech, in a bid to become a hub for CRO action, Claus said. India holds the promise of a vast future market, but that market currently is smaller than that of Japan, Korea, or China. “India and China will spearhead the growth in the Asian pharmaceutical and biotech markets,” he added, “and Singapore will maintain its position as a center for research and innovation.”
To compare multiple locations, he suggested a formula that balances costs (including compensation, infrastructure, taxes, and regulatory considerations) against the risks (geopolitical, human capital, legal, economic, and infrastructure) and market opportunities (healthcare needs, pharmaceutical market size, and the market growth rate).
“There’s no one-size-fits-all strategy. Different companies—and even different activity centers in the same company— may have different results in going to Asia,” Claude continued. Choose locations based upon your own company’s strategy, and the strengths and weaknesses of its own programs and those of potential locations.
Deals with Asian partners offer several strategic benefits. Most obviously, they open vast potential markets. Beyond that, they also offer specific expertise, a market for mature Western therapies and, even in today’s constrained economy, sources of financing.