Thailand Drug Market Update 2017

Thailand, with a population of 68 million, is Southeast Asia’s third most populous country after Indonesia (256 million) and the Philippines (104 million). As the country continues to undergo economic growth and demographic changes, Thailand’s pharmaceutical market presents numerous opportunities for foreign pharmaceutical companies.

Market Growth

According to the International Monetary Fund (IMF), Thailand’s GDP based on Purchasing Power Parity (PPP) exceeded $1.1 trillion dollars in 2016, making Thailand the second largest economy in Southeast Asia after Indonesia, which has a GDP (PPP) of $3 trillion. In 2016, Thailand’s GDP grew by 3.2%, compared to 1.6% in the US and 2% in the European Union (IMF). The Asian Development Bank predicts Thailand’s GDP will grow 3.5% and 3.6% in 2017 and 2018, respectively.

Thailand imported over $2.2 billion in pharmaceuticals in 2016, a considerable increase from $1.8 billion just two years ago. In 2016, over 65% of Thailand’s pharmaceutical imports came from the United States, Europe, and Canada. Germany was the largest pharmaceutical exporter to Thailand, followed by the US, France, then Switzerland. The Thai pharmaceutical market was valued at over $5 billion in 2016, making it the second largest market in Southeast Asia. The value of Thailand’s pharmaceutical market is expected to double by 2020. Pharmaceutical sales per-capita are also predicted to grow from $75 in 2016 to $125 by 2024.

Hospitals purchase over two-thirds of all pharmaceuticals sold in Thailand and primarily purchase generics and prescription pharmaceuticals, compared to drugstores which sell over-the-counter (OTC) products. Thailand has one of the largest medical tourism markets in the world, and over two million foreign patients have traveled to the country annually since 2013. The continued growth of Thailand’s medical tourism industry has further increased the demand for pharmaceuticals.

Disease Trends

Both communicable and non-communicable diseases are highly prevalent throughout Thailand, whose population is aging quickly.

Infectious diseases remain an issue for Thailand, in part due to its tropical climate. Dengue fever, a mosquito-borne illness, affects tens of thousands annually and its prevalence fluctuates wildly, resulting in epidemics every few years. In 2016, over 60,000 people were affected by dengue fever, compared to 140,000 in 2015, 40,000 in 2014, and 150,000 in 2013. The first vaccine against Dengue fever, Dengvaxia (Sanofi Pasteur), was introduced to Thailand at the end of 2016, but health officials remain concerned that there will be another major outbreak in 2017.

Nearly 450,000 people in Thailand are living with HIV/AIDS, but the number of new HIV cases per year decreased to 7,000 in 2016, compared to 10,000 new cases in 2010 and 140,000 new cases in 1991 when Thailand was at the peak of its HIV/AIDs crisis. Other common diseases include influenza, tuberculosis, and malaria.

The prevalence of non-communicable diseases is also on the rise due to changing lifestyles and demographics. According to the World Bank, there are over 10 million smokers in Thailand and over 40% of the adult men smoke. Further, an increasing number of Thai citizens are adopting diets higher in meat, salt, fat, and sugar content, which has led to a larger number of individuals suffering from diabetes and hypertension. Smoking, hypertension, and diabetes are all risk factors for illnesses such as cancer, kidney disease, and heart disease.

Thailand’s population is also rapidly aging, like that of many other countries in Asia such as Japan, China, and Korea. In 2016, nearly 8 million people, or over 10% of the population, were over the age of 60. By 2025, over 20% of Thailand’s population will be older than 60. With age, the risk of developing respiratory diseases, cancer, and diabetes also increases. As these diseases become more common and as the Thai economy continues to grow, there will be a higher demand for newer and better pharmaceutical products.

Pharmaceutical Regulations and Laws

Starting in August 2017, Thailand’s government plans to bring into effect a new law that no longer requires state agencies to purchase from the Government Pharmaceuticals Organization (GPO), the state-run agency for pharmaceuticals and medical equipment. Public hospitals, which have in the past been required to purchase over half of their pharmaceuticals from the GPO, will now be able to purchase more from foreign manufacturers. This change to Thailand’s procurement law provides a huge opportunity for foreign pharmaceutical companies, given that hospitals are primary purchasers of pharmaceuticals in the country.

Furthermore, in August 2016, Thailand’s Food and Drug Administration (FDA) became a member of the Pharmaceutical Inspection Cooperation Scheme (PIC/S) after applying in 2015. Accession to PIC/S indicates that Thailand’s Good Manufacturing Practice (GMP) inspection procedures for drugs increasingly correspond to international standards.

Western Pharmaceutical Companies in Thailand

Thailand is becoming a popular destination for drug clinical trials due to its developing healthcare system and medical infrastructure. Clinical trials in Thailand are cost-efficient and there is a large patient population. In addition, the government’s Board of Investment actively promotes Thailand as a prime destination to conduct clinical research. In April 2016, Rich Pharmaceuticals (Beverly Hills, CA) announced they plan to conduct Phase I/II trials for new oncology treatments in Thailand.

Foreign pharmaceutical companies also manufacture products in Thailand. PharmaCyte Biotech (Laguna Hills, CA) announced in April 2016 that the company would be using Austrianova’s existing live-cell encapsulation facility in Bangkok. The pancreatic cancer treatment encapsulated in Thailand will be used for PharmaCyte’s future clinical trial. Teva Pharmaceutical (Israel) owns a Thai generics manufacturer, Silom, after acquiring Actavis in 2016.

Other pharmaceutical companies, such as Sanofi Pasteur, GlaxoSmithKline, Pfizer, and AstraZeneca have been operating in Thailand for several years and have set up offices and facilities in the country.

Conclusion

The Thai drug market will continue to grow through 2020 and new laws and disease trends provide excellent opportunities for foreign pharmaceutical companies to succeed.