This article was also published on PharmaPhorum
The Thai pharmaceutical market is the largest in Southeast Asia, with a value of more than $4 billion in 2012. At its current rate of growth, it should more than double in size by 2020, when it is expected to reach a value of $9 billion.
Its recent growth is due to rising levels of health awareness and income. Since 2000, the country’s per capita GDP (in PPP) has increased by more than 70 percent. Annual healthcare spending went from just $74 per person in 2002 to $205 per person in 2012. Currently, about three quarters of Thais’ healthcare expenses go to pharmaceutical products.
Further demand has come from the recent growth in coverage under Thailand’s government sponsored healthcare system. Fewer than 75 percent of Thais were covered before the implementation of the UC (Universal Coverage) health insurance policy in 2002. Today, 99 percent of Thailand’s 70 million people have “adequate” healthcare coverage.
The drug market in Thailand is dominated by foreign manufacturers. Together, the US, France, Germany and Switzerland make up nearly 50 percent of all sales revenue from imported pharmaceutical products. Leading multinational companies in Thailand include Sanofi, Pfizer, Merck, Novartis and GlaxoSmithKline.
However, about three quarters of pharmaceutical companies in Thailand are Thai-owned. Leading local manufacturers include Greater Pharma, Biolab, Siam Pharmaceutical and Thai Meiji. In addition, another major domestic manufacturer is the Government Pharmaceutical Organization (GPO), run by Thailand’s Ministry of Public Health (MPH). The GPO manufactures more than 300 pharmaceutical products, most of which are sold via public hospitals.
Thailand has nearly 900 public hospitals and 575 private hospitals. Hospitals purchase more than 80 percent of all pharmaceuticals sold in the country, while drugstores purchase the remaining 20 percent.
PHARMACEUTICAL PRODUCT CLASSIFICATION
According to the Drug Act of 1967, drug products in Thailand are classified as modern or traditional medicines. Modern medicines are those that are “intended for use in the practice of modern medicine or the cure of an animal disease.” Modern medicines are further divided into three categories: new drugs, generic drugs (all generics manufactured prior to 1992) and new generic drugs (all generics manufactured after 1992).
Traditional medicines are those drugs “intended for use in the practice of the traditional medicine.” All traditional medicines are listed in Thailand’s official pharmacopoeia, and tend to be less controlled than modern medicines.
However, a proposal to change the current system is now being discussed by Thailand’s MPH. Proposed revisions to the Drug Act would reclassify drugs into three categories: prescription only drugs, pharmacy dispensing drugs and household remedies.
REGULATION AND LICENSING
The Drug Control Division (DCD) of Thailand’s Food and Drug Administration (TFDA) is responsible for the licensing, registration, inspection, surveillance and adverse event monitoring for all drugs and drug companies in Thailand. Before a company can register a pharmaceutical product, it must hold at least one of the following licenses. These include:
- A license to manufacture modern or traditional medicines
- A license to import modern or traditional medicines
- A license to sell modern or traditional medicines
- A license for the wholesale of modern medicines
Applicants must undergo a facility inspection before the above licenses are granted. Manufacturing facilities must be GMP compliant. In addition, applicants for manufacturing and import licenses must satisfy the following requirements:
- They must be at least 20 years of age and a resident of Thailand.
- They must have sufficient assets to establish and operate a business.
- They must have the facilities to produce, sell, import or store drugs in a way that maintains proper drug quality.
- They must not use a trade name similar to the trade name of another active license holder.
- They must not have any convictions for narcotics or drug related offenses.
Manufacturing and import licenses are valid from January 1 to December 31, and they must be renewed annually. The cost of these licenses is $340.
Only authorized license holders may register traditional and modern medicines in Thailand. Registration requirements vary by drug type. For modern medicines, requirements include:
- New drugs — Applicant must submit information on quality, safety and efficacy, including stability studies and process validation. Since 2009, applicants have been permitted to follow the ASEAN Common Technical Requirements and Dossier when preparing their applications.
- Generic drugs — Applicant must submit dossiers on product information, product manufacturing and quality control.
- New generic drugs — Applicant must submit a complete set of the generic dossiers, plus data from bioequivalence studies and literature supporting safety and efficacy claims.
Registration costs $70 per product, and licenses do not currently require renewal. Pending legislation would require the renewal of registration licenses after five years.
Only drugs that are deemed “household remedies” may be advertised directly to consumers. All other drugs must be marketed through patient education, basic healthcare education and activities that “create disease awareness.”
All promotional materials must be approved by the TFDA before they are disseminated. Advertisements must be truthful and offer no exaggerated claims. In addition, they must not contradict local traditions or beliefs, defame competing products, encourage activities contrary to the law, or encourage patients to consume the product more than is clinically necessary.
Information required to appear in pharmaceutical advertisements includes:
- The product brand name
- The TFDA approval number
- The name and address of the manufacturer or distributor
- The content of the active ingredients per dose
- The names of ingredients known to cause adverse reactions
- Approved therapeutic uses
- Dosage form and/or regimen
- Side effects
- Major interactions
FOREIGN COMPANIES IN THAILAND
Thailand has a mature medical training network with experienced, English speaking investigators. This — along with Thailand’s large, treatment naïve population and tropical setting — has made the country an attractive destination for clinical trials involving rare or tropical diseases. In 2009, for example, Sanofi launched a 4,000 patient study in Thailand to research its dengue fever vaccine.
Other foreign companies have recently set up or bought out rival manufacturing facilities in Thailand. In August 2012, Japan’s Fuji Pharma paid $53 million for a Thai manufacturing facility owned by Swiss CRO DKSH. Under the terms of the agreement, Fuji took over the plant’s customer base, which consisted of more than 30 healthcare and pharmaceutical companies. And in January 2012, Watson Pharmaceuticals inherited several facilities in Thailand after buying Ascent Pharmahealth from India’s Strides Arcolab. The total cost of that deal was $392 million.
Merck — which has long done business in Thailand — decided to use Thailand as its ASEAN distribution hub in January 2011. Merck’s Thai operations will distribute its products to Cambodia, Myanmar and Laos after the launch of the ASEAN Economic Community in 2015. Merck Thailand will also distribute pharmaceutical products to southern China and Vietnam.
Registering pharmaceuticals in Thailand can be a complicated process. Updated requirements are rarely written in English. However, those companies that do make the push to enter Thailand’s pharmaceutical market will find many opportunities.