Pharmaceutical Industry in Thailand

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The pharmaceutical and medical supplies sector includes conventional medicine and chemicals which are used in the diagnosis and treatment of all types of illness. Conventional pharmaceuticals can be split into two groups: 1) Original drugs are medicines or patented drug which have gone through a lengthy process of research and development and which therefore have high production costs. Manufacturers of original drugs are given a twenty-year patent1/ protection and when the patent expires, other manufacturers are then allowed to produce these medicines. 2) Generic drugs are copies of original drugs that are typically manufactured under a trademark or brand name but which do not have patent protection. Generic drugs will, though, contain active ingredients that are identical to those which are found in original drugs for which patent protection has expired and since the production of these generics does not usually require expensive inputs or costly clinical trials, the cost of manufacturing generic drugs is typically lower than that of original drugs. Because of the high and continuous costs of research and development of new medicines and materials, the global production facilities of pharmaceutical and medical supplies, especially those of original drugs, have tended to cluster in the developed economies of the United States, Europe, and Japan, because these areas are better able to draw on resources of skilled professionals, expertize and manufacturing technology. These countries are then able to export to meet global demand with developing countries left to play the role of importers of expensive patent-protected medicines.

In the first quarter of this year, Thailand’s pharmaceutical industry has expanded by 7.5 per cent year on year to Bt5.7 billion because the Covid-19 outbreak has boosted demand for drugs and vaccines.

The sale of tablets rose by 14.6 per cent, followed by capsules at 13.5 per cent, injections at 9.8 per cent and liquid mixtures at 1.9 per cent.

The import of drugs rose by 0.7 per cent worth Bt13 billion, 8.5 per cent of which accounted for imports from China and India. The export of drugs, however, contracted 4.4 per cent because many countries delayed exports.

It is believed the cost of drugs in Thailand may rise due to the temporary closure of factories in China and India stopping the export of 26 drugs, such as paracetamol, which has been reserved for domestic consumption. After seeing strong current value growth for most of the review period, dermatological is expected to see a notable slowdown in its growth rate in 2020 due to COVID-19, although the impact varies across categories. Due to restrictions implemented by the government to try and prevent the spread of the virus in the country, consumers have had less chance to go to the gym or do exercise and other outdoor activities. Although dietary supplements is set to maintain a strong current value growth rate in 2020, this is expected to be slightly slower than seen in the previous years of the review period. Some consumers have become more price-conscious due to the economic impact of measures taken to control COVID-19 in the country. They are therefore prioritising the purchase of necessities such as food, rather than dietary supplements which they consider to be non-essential, such as aloe, ginkgo biloba and protein…

Forecasts to 2024 illustrate how the market is set to change. After digestive remedies saw solid current value growth for most of the review period, the category is expected to turn to decline in 2020. However, trends are expected to differ between categories. For instance, due to the lockdown which was brought in by the government to try and prevent the spread of the COVID-19 virus in the country, many parents have had to work from home. This has resulted in more attention for and better care for their children. As they want to avoid taking their children…

NRT smoking cessation aids remains an insignificant category within consumer health. Consumers can only get these products at drugstores/parapharmacies or chemists/pharmacies as they have to be dispensed by a pharmacist. A slight slowdown is expected in the current value growth rate in 2020, with little impact expected from COVID-19. There has not been any stockpiling of such products. Whilst smokers are aware that smoking could lead to worse problems if they were to contract COVID-19

In 2020, paediatric consumer health is expected to see higher current value growth than in any other year of the review period. This is mainly due to the impact of COVID-19. Due to the lockdown implemented to try and prevent the spread of the virus, many parents worked from home in the first half of the year, which led to more attention being paid to their children and therefore better care. Stockpiling by some consumers is expected to lead to rising rates of growth in 2020

Retail value sales of sleep aids are expected to remain negligible in Thailand in 2020. According to the FDA, sleep aids can be classified into two categories: psychotropic drug (with psychotropic substance); and dangerous drug (may be dispensed by first-grade pharmacists). Sales to patients are only permitted with a doctor’s prescription.

2020 is not expected to be a good year for consumer health in Thailand, with a strong current value decline expected, after seeing strong growth in all other years of the review period. At the beginning of the year the country was already suffering from a soft economic environment, as well as other factors, including droughts, high household debt, unemployment and a slowdown in tourism. Technological disruption was also leading to an escalating number of job losses and unemployment

After seeing solid current value growth during most of the review period, in 2020 analgesics is expected to see a significant current value decline, mainly due to the negative impact of COVID-19. However, very different performances are expected between categories due to the pandemic. For instance, systemic analgesics is expected to maintain growth, although at a slower rate than seen in other years of the review period. Many Thai consumers are interested in getting updates on the latest news

Thailand is in the midst of an economic transformation with healthcare at its heart. With four years of around three-four percent annual GDP growth behind it, ASEAN’s second-largest economy has implemented an ‘Industry 4.0’ policy through which it is attempting to prioritize R&D and innovation in a number of key industries, including healthcare and the life sciences.

Already a regional frontrunner in terms of the implementation of universal healthcare, Thailand is aiming to scale the value chain and grow its footprint in specific niches where it can excel, including clinical research and infectious disease vaccine production. The country is also aiming to cement its reputation as one of Asia’s leading medical tourism hubs, attracting patients from across the globe with high-quality yet affordable healthcare. As in any developing nation, the road to economic transformation will not be smooth. The Thai domestic pharmaceuticals market is beset by pricing pressures, making it difficult for international innovators to succeed there. This is compounded by a regulatory system that still needs improvement, despite admirable progress having been made in reducing drug registration timelines.

Through conversations with some of the leading stakeholders in the Thai ecosystem, this report portrays a willingness across both the public and private sectors to work together and transform Thailand’s healthcare and life sciences industry. Despite relying heavily on imports, Thailand’s pharmaceutical market is growing. The balance of pharmaceutical trade remains considerably negative, with retail medicaments accounting for nearly three-quarters of the total deficit. Between 2005 and 2009, the deficit in the balance of trade rose by a high double-digit CAGR. Thailand’s pharmaceutical market is estimated to grow at a low double-digit CAGR in US dollar terms between 2011 and 2016. Thailand will have the seventh largest pharmaceutical market in the Asia Pacific region in 2016. In per capita terms, Thailand is projected to have the eighth highest rate in the Asia Pacific region by 2016. The Thai generic sector is growing, especially in the public sector, where the government has encouraged its use over patented drugs in order to cut costs. Greater Pharma has recently launched its first generic inhaler drug for the treatment of osteoporosis, making it the first company in Southeast Asia to successfully manufacture a generic version of this drug. The Thai biologic sector is very underdeveloped, but there are signs that this could change. The government-backed organisation BIOTEC has formed partnerships with both Greater Pharma and i+MED. Greater Pharma has developed the first biologic allergy vaccine in Southeast Asia.

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