Updated on 17 May 2012
Govt policies can be a challenge in APAC
Government policies are among the major challenges before companies operating in the life sciences sector in the Asia Pacific region. For larger multinationals, policies favouring local companies prove to be hurdles. While for smaller companies, stringent and fat-changing guidelines are a problem. (Read about all 10 challenges for businesses in APAC)
One of the issues is that local governments often have policies favoring local companies with only some relief for MNCs that bring in huge investments. They also enforce strict new Good Manufacturing Practices (GMP) guidelines that are too costly for many small domestic players to implement. Then there are issues like high customs duties and taxes on imported goods. Another issue, although not unique to Asia, is the purchase of products through tenders by the governments that limits competition.
Dr Joseph Santangelo, CEO, Inviragen, Singapore, gives an example to elaborate on such issues. "A company can perform clinical trials for unlicensed biologics in China only if they are a registered Chinese company and the materials are manufactured in China. In my opinion, this is not in agreement with the World Trade Organization commitments," he says, adding that some Asian countries, for example Japan, also do not recognize clinical data on (some) studies conducted outside their country.
"Businesses in India are done generally through government tenders and hence include lengthy processes and formalities. Funding is based on Central Government budget and fund distribution is not even. Purchase process is long and funding not available for reagents. These should be simplified,"says Dr Bhuwnesh Agrawal, Roche Diagnostics India.
Mr Ling Sun explains some of the trends in the Asia Pacific. "Anhui Model, a pilot healthcare reform program, introduced during the 2009-11 healthcare reforms, is the "double-envelope" tendering mechanism, requiring that government officials first select drugs with good "quality", and then a different independent panel chooses the tenderer with the lowest bidding price," he says. "This encourages manufacturers to provide extremely low bidding prices to win contracts, sometimes lower than the cost itself. As a result, quality and safety issues arise, or manufacturers later choose to stop producing the product at a loss and drug shortages ensue."