North Asia has been leading Asia and even in some aspects, the world in producing novel therapies and drugs to combat everything from Alzheimer’s and dementia to rare diseases. But Southeast Asia, in particular, Singapore, Thailand, Malaysia and Indonesia have been souring under the radar, going through key clinical trials to one day commercialize key treatments for the world. Can Southeast Asia one day lead the world in producing novel therapies?
In an interview with Dr. Chet Yong, Healthcare Sector Leader, Deloitte Southeast Asia, discusses some of the major challenges facing emerging Southeast Asian biotechnology industries, and the potential opportunities that they can also acquire.
The Biotechnician-According to Deloitte’s report called 2015 Life Science Outlook-Southeast Asia, Indonesia is the largest pharma market in Southeast Asia, valued at $6.5 billion. What are some of the challenges that the industry is facing in continuing to develop its phram and biotechnology industries?
Dr Yong Chern Chet-The complexity/capability challenge (applicable to new manufacturing platforms, supply chain and operations) – Biopharma molecules, on their own, are relatively much more complex structures than that of traditional pharma compounds – in the same way as a simple factory that makes simple wooden toy planes is to a full-scale large passenger jet high tech production facility. These biotech facilities themselves easily cost $500 mil onwards to build (and up to 5 years to construct) compared to $50 mil to $90 mil for small molecule facilities of similar scale. One can imagine that the day-to-day operational cost of the plants are correspondingly much higher as well.
The cost challenge (from scientific innovation to business as usual) – The majority of healthcare systems are facing cost pressures as national healthcare budgets balloon out of control over the years. As a result, increasingly, the market is losing its appetite for expensive therapies. It will be difficult for healthcare payors (be it governments or private insurance) to support the rationale for treatments that run into tens of thousands per dose – the amount of which a great number of novel biotech offerings are priced. All these will inevitably lead to the biosimilars being looked to as a solution for accessibility and affordability. This will have an effect on the commercial landscape similar to that of generics on conventional pharma. It would be best for biotech players to innovate their products and look into the affordability issue on their own initiative and terms.
The compliance challenge (meeting quality and regulatory requirements) – From a regulatory perspective, the nature of the biotech industry (sensitive microenvironments required for molecule production and subsequent storage and distribution etc.) and the intimate interface with biological systems and human health/well-being requires high levels of scrutiny and vigilance. Also being a relatively new field from a regulatory perspective, we can expect requirement changes and evolving standards as part and parcel of the challenges. These challenges will need to be looked at not only from a risk management perspective but also from an approach that is robust and process efficient to prevent the cost of compliance from rapidly becoming a major stumbling-block for the business overall.
The Biotechnician-Vietnam has been slow in developing its biotechnology industry. What is the future of the industry, and do you see any new treatments or innovations coming from the market?
Dr Yong Chern Chet-The reality is that it does require a substantial amount of investment both in funds and in the training of human resource to fuel the growth of a sustainable biotech industry engine. Credit must be given to the Vietnamese government for making deliberate investments since the 1980s into specific biotech initiatives in addition to the 5 key national biotech laboratories (to the sum of 50 billion VND annually per laboratory) and over 40 plant cell and tissue culture labs throughout the provinces. I think for Vietnam, biotech success will come from a focused strategy to target areas of national priority like solutions in agriculture e.g. high yield, good quality and disease resistant crops or crops with medicinal properties.
The Biotechnician-Do you think that one day Southeast Asia will lead the world in developing innovative therapies and drugs like what we see in Europe and the U.S.? If so, when is going it happen?
Dr Yong Chern Chet-My point of view is that in the future, the world of therapeutic innovation will be much more of a global platform and the distinction between Southeast Asia versus the rest of the world will not be so sharp. The traditional/practical reasons for carrying out R&D activity in large, developed and lucrative markets like the US and Europe, besides having the accessibility of human resource with appropriate research and academic capability, is also to best fulfil regulatory approval requirements for market entry e.g. local clinical trials etc.
As the region (Southeast Asia) rapidly develops, drivers for R&D and innovation will gradually shift towards addressing market specific conditions e.g. Dengue Fever, Malaria, Diabetes, liver and kidney disease, infectious disease pandemics, regional specific cancer subtypes and etc. This is a clear driver for R&D to be based locally to serve the local market’s needs. To note, certain major strategic initiatives (covering all aspects from financing, IP protection, human resource availability, physical infrastructure, global connectivity, data analytics capability to transparent regulatory environment) by local regional governments, like Singapore as an example, presents a rich and fertile growth platform for innovation to take root in the region and provide the ideal environment for rapid-prototyping. I see this happening within a 10 year time horizon.