Transcript Trends & Challenges - Generic Drug Business in Malaysia

Trends & Challenges
- Generic Drug
Business in Malaysia
David Ho
Managing Director
Hovid Bhd, Malaysia
Focus of Presentation
•
•
•
•
•
•
•
Overview of the pharmaceutical
business
Trends in Generic Drug Business
Opportunities & Positive Outlook
Threats & Difficulties
The Way Forward
Examples of successful
commercialization
Summary of Key Points
Pharmaceutical Drug Business-Overview
• Global pharmaceutical market - Estimated to be
double in value to US$1.3 trillion by 2020
(PricewaterhouseCoopers)
• Malaysia - market size was valued at more than RM
1.7 billion (2006) and close to RM 2 billion (2007)
(IMS Health, 2007)
• Prescription drugs account for around 75% of the
market (Business Monitor International), with the segment
likely to remain dominant in future
Generic Drug Business - Overview
• Global generic business reached US$60 billion in annual
sales in 2005 (MedAd News, November 2006)
• Growth 14 – 16% in the next 5 years, 9 points ahead the
overall industry. For branded drugs, 8% growth annually
(IMS)
• Markets in Asia region are growing, at CAGR of 11.1%
(2001-2007) (Frost & Sullivan)
• Malaysian generic pharmaceutical market was valued at RM
390 million (2001). Annual growth rate of 10 percent & a
CAGR(2001 to 2007) of 12.5% (Frost & Sullivan)
Malaysia: Proprietary vs Generic Drugs
• Proprietary drugs is currently taking up over 70% of the
total market (Business Monitor International)
• Growing market share: 20 – 30% compared to 10 years ago,
10 to 15% of the market
• 11 US-based pharma companies in Malaysia with
accumulative investment of approx RM 104.6 million. Sales
revenue in 2001 was RM 1 billion (Pharmaceutical Association of
Malaysia)
• 72 drug manufacturers in Malaysia. Of these, 32 are licensed
to produce prescription medicines while the rest are
producers of OTC medicines (MOPI)
Current Trends in Generic Drug Business
• Mergers, acquisitions & consolidation
- Eight significant acquitions in 2006
- eg: Dr Reddy’s Laboratories to acquire Betapharm
- eg: Ranbaxy to acquire Terapia
- same shall be expected in the local generic drug business
- stronger players will emerge, corporate landscape will change
• Penetration into new oversea markets
- South East Asia and Middle East countries
- Teva, Sandoz, Biocon & Lupin – presence in the Japanese market
• Diversification into nutraceuticals & food supplements
• Emphasize on R & D – discovery of new actives from natural
products, drug delivery & processing method
Opportunities
• Increased use of generic drugs
- Spiraling healthcare cost. Healthcare expenditure = 3.1 – 5.0%
of the GDP in year 2006 (Medical Cost Reference Guide, 2006)
- Prescription drugs = the fastest rising component of health care
spending
- Government to reduce expenditure by substitution with
affordable generics
- Trend observed in US and Japan – increasing use of generic
substitution, Japan – fee given for generic prescribing &
dispensing
- Malaysia is expected to follow suit
In 2005, the generic industry represented more than 56 per cent of
prescriptions dispensed in the US (Journal of Generic Medicines, 2006)
Percentage of prescription in US filled with generic drugs
80
70
Source: IMS
Percentage
60
50
40
30
20
10
0
1984
2004
Year
2011*
Average price per prescription in US
100
US Dolar
90
80
All Rx
70
Brand
60
Generic
50
40
30
20
10
0
1990
1991
1992
1993
1994
1995
1996
1997
Year
1998
1999
2000
2001
2002
2003
2004
Opportunities
• Patent expiration of many blockbuster drugs
- Drugs worth more than $76 billion in sales in the next 5 years
(Biospectrum, 2007) & $160 billion by 2015 (J Generic Med, 2006) - to go
off patent
- Opportunities for generic drug players to produce generic
versions of the drugs & increase market share
- Key factor - ability of our local generic manufacturers to take
advantage by preparing new products in their production
pipeline, appropriate manufacturing facilities & bioequivalent to
the proprietary drugs
Number of drugs
0
15
2006
2007
2008
Year
2009
2010
Lipitor, Protonix,
Actos, Zyprexia, Levaquin
Coxaar/Hyzar, Abilify,
Aricept, Flomax
25
Number of drugs facing patent expiration
2011
Source: Forbes.com
8
6
4
2
0
US billion
20
Prevacid, Lexapro,
Topamax, Lamictal
Advair, Effexor XR,
Resperidal, Fosamax
5
Norvasc, Ambien,
Zyrtec, Lotrel
10
Zocor, Pravachol
Zoloft, Toprol XL
Blockbuster drugs going off patent
16
14
Total sales in US billion
12
10
Challenges
• Free Trade Agreement
- Products originating from signatory countries will be free
from tariff and non-tariff barriers
- May represent an opportunity for drug companies to
increase sales
- Flow of products into the country – enhancing the existing
competition
- Pushing local manufacturers to create competitive
advantages & improving the quality of generic products
- Market liberations - survival of the fittest
Challenges
• Stiff competition from low cost new comers eg: India and China
- Indian drug-makers expected to acquire 33% share of global
generic market in next 2 years vs current 4% (Biospectrum, 2007)
- China – technology, large capacities, economics of scale
- potential for biogenerics
• Regulatory hurdles
- Registration of product – an enormous exercise
- Long waiting time for registration approval
- Stringent requirement on GMP and QC procedures
- Asia – complex market with each country having its unique
regulatory procedures
Challenges
• Difficulties of expanding into foreign market
- In China, therapeutic efficacy study using the Chinese
population is required for registration of generics
- Individual registration is required for every country.
Harmonization not really in place
- Most countries – have entrenched domestic generic player
• FTA with US
- Data exclusitivity
- Recent US FTAs contain unlimited patent extensions, greater
market exclusivity, and elimination of the requirement that a
brand company disclose the best mode of practicing its invention
Challenges
• Increasing introduction of biotech based products
- present regulatory and production hurdles
• Decline in NDAs over recent years
- number of new generic opportunities will be reduced next 15
years
Challenges
• Strategies by Big Pharma to counter generic competition:
- Litigation suits on patent infringement to delay generic entry
- Price cutting of branded drugs upon patent expiry, eg Merck
sharply cut the price of its Zocor upon patent expiry, Teva did not
benefit as much from the 180-day exclusitivity
- Branded generics
- Extension of patent life of branded products:
(1) Development of combination products, eg: Merck/Schering
Plough partnership to develop Vytorin (ezetimibe/simvastatin)
(2) Using patented technology such as formulation changes. Losec
in enteric-coated multiple unit pellet system instead of pellets-filled
capsule
(3) Use of secondary patent
The Way Forward
• Support from the government is vital
- capacity building & incentive to drive the industry forward
- awareness campaigns for the public on generic medications
• Increase the quality of generic drug products
- implementation of bioequivalent generic drug products
• Intensified effort in research & development
- Novel drug discovery from natural resources.
- R & D efforts has paid off for India. 47% share of total DMF filed
in US were from India (Biospectrum, 2007)
- particularly in areas of product innovation and improvement eg:
drug delivery system (SR, bioenhanced system, drug targeting,
etc)
Global Sales Value of Drug Delivery Systems
$60 B (estimated)
80
70
$47 B
60
US billion
50
$ 32 B
40
30
20
10
0
1998
2002
Year
2006
US Drug Delivery Systems Market, Strategic Report, 2003
Delivery Systems
•
•
•
•
•
•
Some Examples:
Natopherol AquaBiosorp from Abbot Laboratories
Tocovid Suprabio from Hovid (SEDDs)
CoQ10 Suprabio from Hovid (SEDDs)
Hydrosoluble CoQ10 from Tischon
Cyclosporin Neoral (microemulsion)
Fenofibrate (TriCor) from Abbot Laboratories
(micronization technology)
Delivery System for Tocotrienols
• Absorption of tocotrienols
- Different from normal drug molecules
- More similar to lipid absorption
- Similar to other fat soluble vitamins
- Requires physiological processing (bile)
- Influenced by food status/dietary fats
- Tend to be low and erratic
Strategy
• Suitable vehicle
- promote lymphatic transport
• Self-emulsify system
- suitable surfactant system
• Amenable to lipolysis
- suitable surfactant system and concentration
• Reduce influence of P-gP/CYP3A4
- common substrate
SES formulation
Spontaneous/gentle agitation
Emulsion in GIT
Lipolysis
Digested products
Enhanced absorption
BLOOD
Alpha-Tocotrienol
Fig. 1c Mean plasma alpha-tocotrienol versus time curves of the
conventional preparation and Formulation X
Plasma concentration (ng/ml)
1200
1000
Conventional Preparation
Formulation X
800
600
Increase by 3 folds
400
200
0
0.0
4.0
8.0
12.0
Time (h)
16.0
20.0
Coenzyme Q10 plasma profile (n=6)
Concentration (ug/ml)
1.80
1.60
Tishcon-Qgel
1.40
Bioquinone
1.20
SES
1.00
0.80
0.60
0.40
0.20
0.00
0
20
40
60
80
Time (hrs)
100
120
140
160
The Way Forward
• Export to potential high growth countries
- Increasing awareness by local manufacturers of the export
potential of Malaysian pharmaceuticals
- Average export growth of 10.5% for the past 3 to 4 years in the
last few years of the previous decade (MOPI)
• Nutraceuticals and dietary supplements
- Malaysian OTC healthcare is to grow by 18% to reach RM 1,283
million by year 2008. The four largest sectors are vitamins and
dietary supplements, cough, cold and allergy remedies,
analgesics and medicated skin care which have accounted for
91% of the total value of OTC healthcare in 2003 (Euromonitor
International, 2004)
Summary of Key Points
• Global & Local generic drug business - estimated to outpace the
overall pharmaceutical industry
• Potentials - increasing generic substitution; patent expiry of
branded drugs, overall industry appeared rosy
• Challenges - market competitiveness, strategies by MNCs to
delay generic entry, impending FTAs, timely approval by the
regulatories
• Concerted effort by the government, generic drug industry and
the generic manufacturer itself – required
• Comprehensive preparations - to capture a bigger market share
and at the same time, maintaining their competitiveness to face
continued challenges
email: [email protected]
website: http://www.hovid.com