Weekly Roundup: May 21, 2007
- Big Pharma to Expand in Asia (Asia)
- Multinational Drug Makers File Suit With Korean Firms (South Korea)
- Big Drug Makers in Japan Report Mixed Results (Japan)
- Government Eyes Greater Use of Generic Drugs (Japan)
- Shanghai Pharma to Set Up JV with Japanese Distributor (China)
- Dr Reddy's to Set up Two SEZs (India)
- Overseas Funds Flood China Pharma Sector (China)
- India Lags Behind in Biotech, Says Ernst Report (India)
- India's Sun Pharmaceutical Buys Taro (India)
- Website Sued for Biostime Article (China)
- Cuba, China Sign Agreement for Biotech Joint Venture (China)
- Letters: Misuse of Pharmaceutical Drugs (Pakistan)
- No Funding for Cervical Vaccine (New Zealand)
- China's Pharmaceutical Profit Growth Lags Behind Other Industries (China)
"Big Pharma to Expand in Asia"
Financial Times (05/21/07)
A new survey by the consultancy firm PwC finds that multinational drug companies intend to expand their investments and operations in Asia in the coming months despite concerns about corruption and patents. The region's fast growth suggests Asia may be the world's largest pharmaceuticals market in coming years, despite continuing competition. One third of multinationals with bases in Asia intend to expand through acquisitions or by building greenfield sites in the region during the next year. Three-quarters of local pharmaceutical companies emphasize exporting outside their local market as an important goal. Intellectual property rights and un-certainty about legal systems remain important concerns, but the majority of survey respondents said they had seen improvements during the past five years. Clinical trials were highlighted as the business activity most likely to be outsourced to the region, reflecting a response to both mandatory requirements for local trials in such countries as China, and the different ethnic make-up of people in the region and differing responses to drugs. (Click here for more - May Require Paid Subscription)
"Multinational Drug Makers File Suit With Korean Firms"
The Hankyoreh (05/16/07)
South Korean pharmaceutical firms are coming under fire for making generic versions of drugs that multinational pharmaceutical companies allege violate patent-infringement laws. Pfizer is suing nine Korean drug makers over patents involved in making a medication for treating incontinence, and is suing Ahn-gook Pharm for copying Norvasc, a drug that treats hypertension. Japan-based Eisai claims that Korean pharmaceutical firms have breached for Aricept, a dementia treatment drug. The generic drugs in question would be sold for 20 percent less than current drug prices. Korean medications are priced by the South Korean Health Insurance Review Agency as part of the Korean government's goal of providing suitable prices for medications. In April 2007, a free trade agreement was reached by South Korea and the United States stipulating that "for the duration of any patent lawsuit brought against a domestic drug maker," the Korean government's generic drug pricing and approval processes must be temporarily halted. (Click here for more )
"Big Drug Makers in Japan Report Mixed Results"
Asian Wall Street Journal (05/16/07) Shimamura, Kazuhiro; Kachi, Hiroyuki
Japanese pharmaceutical companies produced mixed results for the last fiscal year between March 2006 and March 2007 as they compete with increasing pharmaceutical imports. Many are gearing up for further foreign competition. Daiichi Sankyo posted a net profit between March 2006 and March 2007 that was 10 percent less than the previous year. They say the decline is due to high R&D costs, and add that current restructuring and product performance will make this coming year robust. Astellas Pharma's net profit for the same period rose by 27 percent, mostly because they sold their over-the-counter drug unit. Eisai recorded its seventh consecutive annual net profit during this period. They had especially strong sales in drugs for Alzheimer's and ulcers. Taisho Pharmaceutical saw its net profit for this recent fiscal year fall by 57 percent compared to the previous year, and their sales declined by 11 percent. (Print Edition Only: Link to Full Text Unavailable)
"Government Eyes Greater Use of Generic Drugs"
Daily Yomiuri (Japan) (05/18/07)
A new report by Japan's Fiscal System Council says the country's under-use of generic drugs and high price of medical equipment in Japan are two reasons Japanese medical costs are so high. The report was presented to Japan's Finance Ministry. The Finance Ministry reports that 5.2 percent of all medical drugs used in Japan are generic. This use is less than 50 percent of U.S. use, and less than 25 percent of German use. The report estimates that Japanese individuals could save about 10,000 yen per year in drug costs if they would switch to using all generic medicines. (Click here for more )
"Shanghai Pharma to Set Up JV with Japanese Distributor"
Interfax News Agency-China (05/17/07)
Shanghai Pharmaceutical (SP) will create a 50-50 percent joint venture called Shanghai Suzuken Huzhong Pharmaceutical with Japanese distributor Suzuken to help both companies share resources and tap into international market channels. The new distribution venture will look for foreign companies interested in distributing pharmaceuticals in China. SP is China's second largest distributor of pharmaceutical goods with revenue of $2.03 billion in 2006, and Suzuken is Japan's second-largest distributor. Shanghai Suzuken Huzhong will begin with registered capital of $10.5 million under a 20-year joint venture agreement. At the outset, SP will provide the joint-venture with a CFO and chairman, while Suzuken will provide the CEO and vice-chairman. (Click here for more )
"Dr Reddy's to Set up Two SEZs"
Business Standard (India) (05/21/07)
Dr. Reddy's Laboratories is implementing a 2007 capital expenditure program of $100 million to create two new "special economic zones" in Hyderabad and Visakhapatnam, India, to boost manufacturing capacity. The Hyderabad development will focus on making active pharmaceutical ingredients, and the Visakhapatnam complex will focus on pharmaceutical products. Dr. Reddy's says it plans to launch 10 new pharmaceutical products during this current fiscal year. During the last fiscal year, the company scored significant revenue from gaining 180-day market exclusivity approval for simvastatin, finasteride, and ondansetron. Dr. Reddy's plans to push for new exclusivities as part of their revenue strategy. Today they have 69 pending applications at the U.S. FDA for drug products. (Click here for more )
"Overseas Funds Flood China Pharma Sector"
Standard (Hong Kong) (05/16/07)
Foreign companies continue to purchase Chinese pharmaceutical companies as the Chinese pharmaceutical industry expands robustly, despite various scandals. China's aging population is expected to inaugurate huge demand for pharmaceutical products in China, and its low-cost drug manufacturing remains enticing to international companies and investors. Chinese pharmaceutical regulators remain extremely understaffed in comparison to the industry, say experts, and today approximately 7,500 drug-makers operate in China. No single drug-maker controls over 4 percent of the market, which means there is room for dominant market players in China to emerge and expand. The average Chinese person's drug spending is under 5 percent of average U.S. individual spending on legal drugs. (Click here for more )
"India Lags Behind in Biotech, Says Ernst Report"
Hindustan Times (05/15/07) Ghosh, Suprotip
An new Ernst & Young report asserts that India's biotech drug industry needs more start-up investment to become a formidable world presence. In 2006 the Indian government has begun considering how to subsidize this industry. The report titled "Beyond Borders Global Biotechnology Report" does predict that India's biotech will grow from $6 billion today to $15 billion in 2015. It also notes that much Indian biotech funding is focused on producing low-cost drugs, not biologic drugs or significant new research. In terms of scientific biotech research, India is behind. Between Jan. 1, 1996, and Aug. 31, 2006, the report states that India published 789 research papers on biotechnology topics. This is far fewer than 37,822 comparable papers published by U.S. scientists, 2,273 by Australian scientists, and 1,481 by Chinese scientists. The report adds that Indian biotech companies need to begin filing more patent claims. (Click here for more )
"India's Sun Pharmaceutical Buys Taro"
Ha'aretz (Israel) (05/21/07) Cohen, Omri
India-based Sun Pharmaceutical Industries is purchasing Israel-based company Taro Pharmaceutical Industries for $454 million. Sun is interested in this company's expertise in dermatological and pediatric brand prescription, over-the-counter, and generic drugs and development know-how. Taro will become a Sun Pharmaceuticals subsidiary. Sun Pharmaceutical Industries has a market capitalization of $5 billion. Sun derives 43 percent of revenue from sales outside of India, and 23 percent from generic sales inside the United States. The transaction cost includes purchasing Taro shares at $7.75 per share for around $230 million, and assumption of about $224 million in Taro debt. (Click here for more )
"Website Sued for Biostime Article"
China Daily (05/15/07) Quanlin, Qiu
Biostime France, a pharmaceutical company building a production factory in Guangzhou, China, is suing a Chinese Web site over the claim that "Biostime products are not developed in France." The Guangzhou, China-based Web site 315ts.net has asserted online that Biostime's pediatric product "Biostime probiotic sachet" sold in China is neither researched or developed in France, and that the company itself does not exist in France. Biostime France Asia business director Ulrich Irgens says all products the companies sells in China are researched and made in France. They specifically are made at the research and development center of Lallemand Group, a part-owner of Biostime France. As of right now, the Web site still has the offending article online. One Web site spokesperson says they need more proof of Biostime's claims before they will change the article. (Click here for more )
"Cuba, China Sign Agreement for Biotech Joint Venture"
Deccan Herald (05/18/07)
Beijing Neuro-technology Limited is a new joint-venture biotechnology company created by the Chinese and Cuban governments to develop and market new neuro-technological products. The company is part of a larger trade agreement signed in the middle of May by both countries. Two Cuban-Chinese joint ventures in the pharmaceutical sector already operational are Biotech Pharmaceutical and ChangHeber Pharmaceutical. (Click here for more )
"Letters: Misuse of Pharmaceutical Drugs"
Daily Times (Pakistan) (05/16/07)
Pakistan Pharmacist Association executive member Mohammad Obaid Ali says that the promotion of off-label use of pharmaceutical drugs by companies to generate and expand revenue has become "widespread since the last 10 years." He adds that non-essential prescribing of drugs hurts the integrity of the medical profession. Ali says many pharmaceutical sales representatives in these instances "make false representations" about drugs, and in some cases doctors go along with it because of incentives. In Pakistan, the health care system lacks a large class of trained and qualified pharmacists. This makes matters worse. (Click here for more )
"No Funding for Cervical Vaccine"
TVNZ Interactive (05/16/07)
The New Zealand government has decided not to fund immunization of young women against cervical cancer using Merck's Gardasil. Today Gardasil is available in New Zealand for women between the ages of nine and 26, and costs $450 for a three-injection treatment coarse. This vaccine protects women against the human papillomavirus (HPV), a sexually-transmitted virus that causes about 70 percent of cervical cancer cases. New Zealand's Ministry of Health says regular smear-test screening works well enough. The government says they will reexamine funding Gardasil in the future. (Click here for more )
"China's Pharmaceutical Profit Growth Lags Behind Other Industries"
Interfax News Agency-China (05/15/07)
Chinese pharmaceutical industry profits totaled $5.41 billion in 2006, up 11.1 percent from 2005, though Chinese industries overall saw 31 percent profit growth. This new data from China's National Development and Reform Commission (NDRC) shows China's pharmaceutical industry is not as robust as other sectors. Pharmaceutical analyst Wang Youhong comments that "the fall in profits was caused by several factors, including government anti-corruption campaigns in the medical sector, product suspensions due to lack of adherence to environmental standards, and drug price cut policies initiated by the government." Wang predicts 2007 will be a rebound year. NDRC's report also shows that China's pharmaceutical profits grew by 28.8 percent annually between 1998 and 2003. It grew by 11.6 percent in 2004, then 23 percent in 2005. (Click here for more )
