Japanese drug firms eye opportunities in Kingdom

Yasuhiko Shioi, vice president of Toyama Pharmaceutical Association and chief executive officer of Kokando Co, said some drug firms considered Thailand a key production base because of its geographical advantage, able to distribute their products into neighbouring nations such as Burma, Vietnam and Indonesia. 

Their investment will take different forms including joint ventures, joint marketing research and market development, long-term partnerships, importing products from Japan, trading Thai products to Japan and other nations, and joint product development, he said.

“The investment outlook here is still positive. I am not worried about politics and flooding. Thailand is a [good] choice because Thais are familiar with Japanese culture and there are a lot of Japanese living here,’’ he said.

Not only does Thailand see rising demand for medications driven by its economic growth, the local pharmaceutical industry has long been established. 

This makes it easy to find full-scale production equipment and skilled producers. 

Hosted by DKSH Thailand Co, a Switzerland-based trading firm, in cooperation with the Bangkok arm of the Japan External Trade Organisation (Jetro), drug-company representatives attended a presentation yesterday to learn how to do business here, especially local regulations under the Food and Drug Administration. 

All of them came from Toyama prefecture, Japan’s biggest pharmaceutical production base with 89 companies. They mainly produce generic and over-the-counter drugs. 

Currently, Japan is the world’s second-biggest drug producer behind the United States in terms of value. Sixty per cent of its output is exported, particularly to the US and Europe. 

But entering the Thai market may not be easy. At present, the total drug market is valued at Bt110.8 billion. It is dominated by multinational companies, mainly from the West, such as Pfizer International and Sanofi-Aventis, which between them hold 74 per cent of the market. 

The remaining 26 per cent is controlled by local companies.

The market is also witnessing a decline in growth. Last year, it grew only 3.5 per cent, compared with 18-19 per cent before 2008. The sharp drop in growth was blamed on the national economic slowdown, which hit the government’s healthcare budget. 

However, Shioi said Japanese drugs were competitive, relying on innovation and differentiation compared with others sold in the market, especially generic drugs. But companies will not launch a pricing war to gain market share, he insisted.