the value of innovative pharmaceuticals and the potential ... · the value of innovative...
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The value of innovative pharmaceuticals and the potential
for VietnamMr. Koen Kruytbosch, Vice-Chairman of Pharma Group Vietnam
6th October, 2016
PHARMA GROUP
“Our priority is to ensure that Vietnamese patients have fast and sustainable access to high quality, safe, and innovative medicines in working together with the Government of Vietnam”
Pharma Group members (the foreign research-based pharmaceutical manufacturers spending more than 10% on R&D) and present inmany countries are committed to Vietnam. In the last three years:
- Investments in medical information and education: VND 290 Billion
- Employees: almost 6000 Vietnamese colleagues (more than 50% advanced-degree)
- Innovative products: an important contributor to overall healthcare in Vietnam
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The value of innovative pharmaceuticals and the potential for Vietnam
• Innovative pharmaceuticals: an opportunity – not a cost• A long journey: R&D is a long and costly endeavour
• Healthcare outcomes are becoming increasingly important
• The TPP and EVFTA make headway for patients and industry development • Faster and more sustainable access to innovative medicines for Vietnamese patients
• Agreements pave the way for investments and technology development in Vietnam
• Opportunities and challenges for doing business in Vietnam• Vietnam - a potential ASEAN hub for innovative pharmaceuticals?
• Elements to improve the business environment include Foreign Invested Enterprise and IP protection
Innovative pharmaceuticals: an opportunity – not a cost
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Discovery
Exploratory Development
Full
Development
Registration
Large Amounts of
Candidate Medicine
Synthesized
Project Team
and PlansSynthesis
of Compounds
Early
Safety
Studies
Candidate
Formulations
Developed
Extensive
Safety
Studies
Screening
Studies in Healthy
Volunteers Phase I
Candidate Medicine Tested in
3-10,000 Patients (Phase III)
Studies in 100-300
Patients (Phase II)
Clinical Data
Analysis
THE LONG ROAD TO A NEW MEDICINE
THE PHARMACEUTICAL INDUSTRY SPENDS A GREATER PERCENTAGE OF ITS REVENUE ON RESEARCH & DEVELOPMENT THAN ANY OTHER INDUSTRY
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Note: R&D intensity refers to R&D spending as percentage of net sales. data relate to the top 2,500 companies with registered offices in the EU (633), Japan (387), the USA (804)
and the Rest of the World (676), ranked by total worldwide R&D investment (with R&D investment above €15.5M)Source: The 2014 EU industrial R&D investment scoreboard, European Commission, JRC, DG RTD.
Innovative medicines enable reduction of per capita expenditure onhospitalization
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Example: Cardiovascular
Source: Lichtenberg, F: Have Newer Cardiovascular Drugs Reduced Hospitalization? Evidence from Longitudinal Country-level Data on 20 OECD Countries, 1995–2003 (2008)
The TPP and EVFTA make headway for patients and
industry development
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Today’s situation in VietnamImproving the country’s global competitiveness and business climate attractiveness
Vietnam’s global competitiveness ranking in selected areas
Source: Business Climate Index, Eurocham Q3 2015
Business Climate Index Development
Source: WEF Global Competitiveness Report 2015-2016, rank out of 140 economies in 2015-2016 and 144 in 2014-2015
Vietnam ranks 56th of 144 countries according to the 2015-2016 Word Economic Forum (WEF)
Improving 12 places versus last year
Low points are in legal framework, education system, IPP – and the current focus for VN to improve
In spite positive results there are key recommendations to improve on:
– Increasing the livelihood of people (Safe Medical access and Pharmaceuticals)
– Increasing consumer choice
– Legal framework
– Vietnam’s competitiveness (leverage EVFTA/TPP)
Localization strategy
Active Global Integration
Political and Regulatory Developments
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Government Goals
• Quality medicines
• Universal Healthcare Coverage
• 80% Value and Volume produced locally
• ASEAN Hub for Innovative pharma export
Government messaging is positive
Q1-2016 Q2-2016 Q3-2016Pharma FDI
Roadmap
Toll Manufacturing
Circular
Tender
Circular
IPP
Circular
Pharma
Law
FTA Developments
Trade Agreements (TPP, EVFTA, AEC)
• Patients:
• Fast and sustainable patient access to innovative medicines
• Increased HCP choice through MNC participation in competitive bidding
• Industry :
• Increased legal clarity through FIE rights
• Improved Regulatory Data and IP Protection
Q4-2016
FIE status for
MNCs in
Vietnam
Economic Impact of FDI
Economic Stagnation
Era of the Celtic Tiger
Key policy changes :• FDI Foreign Direct becomes key strategic goal• Incentives for Foreign Companies in Ireland• Social Partnership• Political Stability• Investment in Education• Deepen Roots of MNC’s - Research Capability
•1973 - Joined the EEC (EU) •Joined Euro in 1999• Financial Crisis 2008 - 2013
Ireland : Early Days…
• British Colony for over 8 centuries
• Famine in 1845 – population almost halved from 8M to 4.5M.
• Independence in 1921
Mass Emigration (pop. falls to 2.8M) Closed Economy - Trade Protection Agriculture Irish income per capita $2,700 – one
of the poorest in Europe
Ireland – A New Policy.... The Impact : Ireland Today
# 1 >1,200 >500 500M
MNC Employment : Over 180,000 directIrish Manuf. & Services Employment : 174,000 directly
The #1 place in Europe to do business
(Forbes, 2010)
US companies favorite gateway to Europe
EU and Eurozone member –access to 500m European consumers
MNCs have chosen Ireland
“Fueled by Clear Government Commitment”
From poorest and least educated country in Europe in 1970 to “Life Sciences” Powerhouse
Vietnam - a potential ASEAN hub for innovative pharmaceuticals?
Source: Communiqué International
Elements to improve the business environment
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INCENTIVESINVESTMENT LAWPHARMA LAW
• Provide framework for FDI• Pharma industry is on list of
conditional sectors
• Enablers such as FIE rights and implementation of EVFTA/TPP commitments are precursors for investment
• Stronger incentives increase the likelihood of foreign MNC investment
The currentRegulatory
Environment
RO Manufacturing Facility
Context
Process R&D
● Trading● All tech is off-
shore
● Innovative technology and knowledge could be transferred
● Potential clinical development● Opportunity to export to ASEAN
No High
• Enables faster access to innovative medicines for Vietnamese patients
• Does not specifically allow FIEs, which hinders investment
Legal framework and roadmap: a phased development and the need for an FIE
Export capability
No Yes
ROADMAP TO BECOME ASEAN HUB FOR INNOVATIVE PHARMACEUTICAL MANUFACTURING
GAP no current options
between Rep Office and manufacturing facility
FIE & distribution
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Objective:
Secure long term investment by allowing for the establishment of a foreign invested enterprise for pharmaceutical trading.
Impact:
increased investments by international, innovative companies in Vietnamese companies
ensuring quality of medicines and advancing Vietnamese healthcare: education, quality and humanitarian projects.
Recommendation:
1. Complete implementation of Vietnam’s WTO, TPP and EVFTA commitments
2. Full liberalisation of distribution services
IMPORT AND DISTRIBUTION RIGHTS – a regional comparison (2015)
Country Allowed to
establish a legal
entity?
If yes, is the legal entity/rep office allowed to perform the following functions:
import/trading? Sell to
licensed
distributor
Sell to Trade Sell to Hospitals Distribute Promote Education
Vietnam
Malaysia Up to a certain limit
Philippines
Indonesia For NCE / products not
locally producible
Hong Kong
Taiwan Only product license
holder can import.
Hospital registered
pharma merchants
RX: direct consumer
activities not allowed
Singapore
Australia
N. Z.
The value of innovative pharmaceuticals and the potential for Vietnam
• Innovative pharmaceuticals: an opportunity – not a cost• Medicines are among the most powerful tools we have for patients to cure, treat and prevent illness both
now and in the future • A long - and costly - journey to develop a new drug: benefit must be measured on total health outcomes
• The TPP and EVFTA make headway for patients and industry development • Vietnam has a (closing) window of opportunity to leverage the FTAs and focus of the international business
community to position itself within ASEAN
• PG is interested in working with the Government of Vietnam and 3rd parties to explore ways to maximise this opportunity
• Opportunities and challenges for doing business in Vietnam• Vietnam has the potential to become an ASEAN hub for innovative pharmaceuticals – but the road is long
(2035?) and requires a dedicated and holistic approach and must be driven by Government
• Key enablers to encourage investment in innovative pharmaceuticals include the right to establish a Foreign Invested Enterprise and improved IP protection
“Our priority is to cooperate and work closely with the Vietnamese Government to ensure that Vietnamese patients have fast and sustainable access to high quality, safe, and innovative medicines”
Thank you for listening!