The story of biopharmaceutical research and development in the Association of Southeast Asian Nations (ASEAN) is one of the great, but as-yet unfulfilled potential. Over the past 30 years, the ASEAN region has evolved from a high-risk frontier of research and development to an integral part of the drug development landscape. However, in context on the progress made in other regions of Asia, in particular northeast Asia (e.g. China and South Korea), ASEAN has lagged.
Now, with a few months remaining to achieve ASEAN’s goal of forming a regional common market by the end of 2015 – the ASEAN Economic Community (AEC) – it is becoming clear that AEC will be an evolutionary process. Some ASEAN member countries are further along with reforms than others, and the numerous details of harmonization, especially in the biopharma industry, may take years to achieve.
To understand the aspirations of ASEAN, it is instructive to look into its origins. ASEAN was created in 1967 to increase economic integration. Its founding members were Indonesia, Malaysia, the Philippines, Singapore and Thailand; the organization has since added Brunei, Cambodia, Laos, Myanmar, and Vietnam. ASEAN’s mission was given fresh impetus in 2007 when the 10 members agreed to commit to be part of the AEC common market.
ASEAN started the AEC project to advance four goals:
The advantages of integration and harmonization in ASEAN are especially pronounced in highly regulated industries like biopharma, where – even without reforms – the future is bright. BMI Research forecasts biopharma sales in ASEAN is likely to be more than doubled by 2023, outstripping the growth rate in the Asia-Pacific region and rising to almost $50 billion. ASEAN has the assets needed to live up to these expectations but as it stands it faces as many challenges as opportunities.
- To create a single market and production base for goods and services, with free flow of capital and labour;
- To enhance the region’s competiveness and ability to participate in the global economy, with increased intellectual property rights and consumer protections;
- To foster equitable economic development to narrow the development disparity between members;
- To increase integration with the global economy and participation in global supply networks.
The Asia Advantage: Broad but Uneven Progress
Asia-Pacific’s broad progress over the past 30 years in biopharma is well documented. It has evolved from being a frontier for drug development (1980s); from a low-cost centre for development (1990s and early 2000s) to the current position as regular part of every company’s global development strategy.
Asia-Pacific is now on the cusp of an era in which I believe it can become a leader in clinical trials and a primary source of innovative products and processes. The accessibility of all raw materials, in which I consider and term as “Asia’s advantage,” are in place to fulfil this vision for the region.
Asia has large, concentrated patient populations (six of every 10 people in the world live here). Governments are keen on developing the life-sciences; to hire large numbers of highly qualified and motivated university graduates, and are possess a collaborative mind. Many countries have benefited from the push by Western biopharma companies to bring the quality practices and infrastructure into Asian research and, clinical trial sites up to global standards.
While absorbing this knowledge and benefiting from the infrastructure, local Asian biopharma is unencumbered by legacy systems and thinking. In comparison, western companies and scientists must cope with the transition from traditional to new ways of conducting R&D, leveraging modern technology and science, their Asian peers have the opportunity to build businesses from the ground up, unfettered by legacy systems and thinking.
However, biopharma R&D progress across Asia-Pacific has been uneven. China, South Korea, Taiwan, Australia/New Zealand and made greater progress; within ASEAN, Singapore stands out. As a region, ASEAN has lost the momentum it showed in the late 1990s and early 2000s.
ASEAN has every right to be ambitious and optimistic about the future of its biopharma industry; there also must be recognition of how far the region is from living up to its potential. The most obvious indicator of the gulf between the region’s potential and its reality is the progress toward meeting the goals of AEC. When ASEAN drafted its blueprint for AEC, it aimed to have each country implement its goals by the end of 2015. However, with months to go till the deadline, it is beginning to look overly ambitious.
Some of the problems stem from trying to integrate countries with widely disparate economies. The gross domestic product (GDP) per capita in Singapore is US$51,000 which is 60 times more than in Myanmar. To put the gulf in context, the highest GDP per capita in the European Union is around five times the size of the smallest. When the outlier Luxembourg is excluded, the highest GDP in the European Union is less than three times larger than the smallest. As integrating Bulgaria into the European Union has caused some headaches, it is easy to see why AEC is running behind schedule.
One of the main challenges is the establishment of a balanced intellectual property system. The plan takes the divergence in the stages of development across ASEAN into account while still trying to make the region favourable to the holders and creators of intellectual property. Specifically, the AEC strategic plan calls for the development of national and regional infrastructures that position ASEAN to take an active role in the international intellectual property ecosystem. In working towards this goal, ASEAN expects members to systematically promote intellectual property and cooperate.
These goals are part of the 2011 to 2015 strategic plan, a document that is looking increasingly ambitious as the deadline nears. The struggle to close the disparity in intellectual property practices from country to country in ASEAN is of particular concern for the biopharma industry, which has long called for strong protections for innovators in the region. Until ASEAN can ensure the protection of intellectual property and make a breakthrough in the harmonization of standards, it will struggle to tap into its advantages to become an innovative global leader.
But progress is being made. The medical device segment is a bright spot, for example. The ASEAN Medical Device Directive (AMDD) was approved by all member countries in August 2014 to harmonize medical device regulations. Significant progress has been made this year toward this goal, which would allow easier access for medical device companies to serve a regional market of more than 600 million people.
On the biopharma side, the ASEAN Pharmaceutical Products Working Group (PPWG) is making some progress in a complex environment to harmonize regulations without compromising drug quality, safety and efficacy. One example is a draft Mutual Recognition Arrangement (MRA) for Bioequivalence Study Reports. Earlier this year a committee of the PPWG reviewed the MRA’s fourth draft, with hopes that the final MRA would be approved by the end of the year.
However, many challenges remain in harmonizing biopharma industry regulations across ASEAN. There are still country-specific requirements in place and difficult details to be worked out regarding revision, adoption and implementation of guidelines.
What’s Next? Divergent Paths and Decision Points Face ASEAN
The challenges that face ASEAN are far from trivial, but the reward for navigating past these roadblocks should provide sufficient motivation for the region’s leaders. Slowing growth in China and uncertainty about India’s biopharma environment has rekindled interest in the rest of Asia. ASEAN is in a strong and privileged position as the global biopharma industry adjusts to the business environment in 2015. While established Western companies face the challenge of transforming the unwieldy operations they built in the blockbuster era, ASEAN companies have a relative blank slate and a vision of a better approach for today’s world.
Nimble, data-driven, and collaborative companies will be best placed to succeed in the coming years. Paradoxically, one of the factors cited as slowing down ASEAN harmonization – an aversion to confrontation – may actually be a strength in this more collaborative biopharma environment.
Entrepreneurs in ASEAN can go full tilt at building businesses that fit this archetype, free from the baggage that is slowing their peers in the West. Several tailwinds should hasten the progress of the ASEAN upstarts, too. The Asian mind-set around partnering and innovation is well suited to the emerging biopharma environment. In contrast, the mind-set that prospered in the vertically integrated biopharma companies of the late 20th century looks outmoded today.
If the new generation of small, nimble ASEAN biopharma companies can combine the power of data analytics, technology, outsourcing, and partnering with their ready access to the AEC growth story, they could develop into businesses that make a mark on the world stage. Yet, ASEAN could still squander all of these advantages, if it fails to resolve the regulatory harmonization and intellectual property issues that are undermining its push for a closer trade alliance.
Multiple possible paths lie ahead. It is up to the region’s leaders to usher it along the one that makes the most of the “Asia advantage.”
About the Author
Ross Horsburgh, M.D.
Senior Vice President and Head of Clinical Development Asia-Pacific, Quintiles
As Head of Clinical Development Asia-Pacific, Dr Ross Horsburgh leads an extended management team responsible for all clinical functions across this key growth region, where Quintiles employs more than 11,000 people in 13 countries. Ross, who joined Quintiles is 2012, is a New Zealander trained in clinical medicine and neuroscience. He has more than 20 years' experience in Asia, having been assigned to Beijing in 1993 to set up clinical development and regulatory capabilities in Northeast Asia for a Swiss pharmaceutical company. During his five years in that role, Ross led some of China's earliest GCP-compliant trials aimed at global approvals for a Chinese-invented and globally patented anti-malarial drug.
Ross moved to Singapore in 1998 and over the next 14 years held leadership roles with three biopharmaceutical companies (including ASLAN Pharmaceuticals, a Singapore-based biotech he co-founded in 2010) and a mid-size global CRO, building and managing teams responsible for Asia-Pacific clinical development; medical and regulatory affairs; business development and licensing; and market access.