Pharmaceutical Growth in Southeast Asia and Gulf Cooperation Council Countries

Both Southeast Asia and Gulf Cooperation Council (GCC) countries are growing markets in the pharmaceutical industry. As personal income increases and the standard of living rises, so the demand for healthcare and medication increases. Multinational pharmaceutical companies that know how to work within these two regions will be the ones who capture the market.

One of OnFrontiers experts, Shakeel Javed is the Director at Ami Pharma Consultancy for GCC, CIS, Africa and Southeast Asia. He has worked in the pharmaceutical industry since 1998, starting his career at Roche Pakistan as Product Specialist. Since 2005, he has worked in GCC states and in Southeast Asia and Africa with reputable multinational pharmaceutical companies.

In a recent interview at OnFrontiers, Javed shared some insight on how to succeed when trying break into these two markets.

What regulations tend to catch most pharmaceutical businesses by surprise when doing business in Southeast Asia and the Gulf Cooperation Council (GCC)?

Southeast Asia and the GCC operate very differently, these two regions need to be addressed separately. Southeast Asia, comprised in part of Laos, Myanmar, Vietnam, Cambodia and the Philippines, is a “non-regulated, but organized” pharmaceutical market. Organization comes through the use of the ASEAN Common Technical Dossier (ACTD) which creates a standard format for registering pharmaceuticals designed for human consumption. The ACTD is also what drives the distribution of pharmaceutical products. Because every registration differs within each country, the best way to succeed is to partner with a local distributor who can help businesses through the ACTD registration process.

The GCC, on the other hand, follows international guidelines for pharmaceuticals rather than the ACTD. This type of market is called a “regulated market.” Companies must register their products with three major markets such as Saudi Arabia, United Arab Emirates (UAE), and Kuwait. If a company gets its products registered in any two of the three above mentioned markets, the products are then automatically registered in Bahrain, Qatar, and Oman. Because of the form of registration in the GCC, this market is easy and comfortable for businesses from places like the United States, Canada, and Europe to enter. The GCC is also fruitful and full of opportunities.

Although the Philippines is part of Southeast Asia, it is moving from “organized” to “regulated.” It has begun requiring pharmaceutical companies to have inspections performed by the company’s local health inspector before proceeding with registration, much like GCC countries.

Are there unusual regulations that pharmaceutical businesses face in these regions?

No unusual regulations exist in either of these regions although certain principles should be applied to doing business regardless of whether the company is breaking into Southeast Asia or the GCC.

First, market research needs to be done, and a marketing partner located. This partner will become an asset either in filing registrations with the ACTD or with the major GCC countries. Second, company products need to be registered with the appropriate entity (either the ACTD or two of the three major GCC countries). Third, if business is being done in the GCC, an inspection of the company by its local governmental health authority must be performed.

With whom would companies be primarily dealing when taking care of regulation issues?

For multinational companies working in Southeast Asia, the local marketing partner or local distribution partner is of the utmost importance. The local marketing partner and distribution partner are also extremely important to multinational companies in the GCC. Because regulations for the GCC require governmental health agency inspections by the company’s home country governmental health agency, any business working in the GCC would also be working with its local Ministry of Health.

What sorts of things do multinational pharmaceutical business developers have to be aware and/or careful of when doing business in these regions, for example: customs, laws, language issues, cultural differences, etc.?

Pricing is the most important. Often multinational companies want to price their products at high prices. The problem with that is the market is full of Chinese, Pakistani, Indian, and other products that are offered at low prices. Being sure to properly price the product is key.

Next is understanding the culture and the people. Every region is different, and understanding that difference will lead to success. In Sri Lanka, for example, understanding the islander culture means companies don’t push. Those who would do business there must understand this cultural concept.

Third, businesses must understand the market dynamics, how the market is behaving in relation to pricing, competition, regulation, sales, and marketing.

What advice do you have for multinational pharmaceutical business developers when doing business in these regions?

First and foremost, find a consultant in the region who understands the system and the market. Companies considering breaking into a new region should do market research ahead of time and be familiar with how the market is behaving. Finding someone who knows the area, an expert in his or her field, is the best way to ensure success.

How do you see the future growth of the pharmaceutical industry in Southeast Asia and the GCC?

“Every market is growing.” The top five growth markets in Southeast Asia in order are Sri Lanka, Vietnam, Myanmar, Cambodia, and Laos. Others have great potential for growth. These, in order of their potential, are the Philippines, Sri Lanka, Vietnam, and Cambodia. In the GCC countries, the top growth markets in order are Saudi Arabia, UAE, and Kuwait.

How will the U.S. withdrawal from the Trans-Pacific Partnership (TPP) impact the pharmaceutical industry in Southeast Asia and the GCC?

The proposed U.S. withdrawal from the TPP will not adversely affect the pharmaceutical industry in Southeast Asia. Instead, it will probably actually boost the industry by supporting the companies which produce generic medication, making low-cost treatments more readily available. Since the GCC follows regulations much like Europe, Canada, and the United States, the withdrawal won’t help the industry there at all.

Businesses that take the time to locate local distributors and marketing partners will be able to successfully break into these growing markets. Learning how to work within the local culture rather than trying to make the culture conform to the company’s home country is the mark of a wise business person and will be what sets him or her apart from the crowd.

Shakeel Javed is the Director at Ami Pharma Consultancy, which works in the GCC, CIS, Africa and Southeast Asia. He has worked in the pharmaceutical industry since 1998, starting his career at Roche Pakistan as Product Specialist.