Asia's changing regulatory environment and pharma outsourcing

Written by Dr. Paolo Biffignandi, Advisory Board member of the pan-European pharmaceutical regulatory affairs organisation ELC Group and former President of TOPRA (The Organisation for Professionals in Regulatory Affairs), and Lini Subin, Head of Regulatory Affairs at ELC Group.

Asia is the fastest growing pharmaceutical market in the world, providing significant opportunities for drug development and marketing. Consequently, pharmaceutical regulations in this region are fast gaining attention among pharmaceutical companies worldwide.

Following the global recession, Asia began steadily emerging as the largest player in the pharmaceutical market. China, Japan, India and Korea now rank among the top 15 economies in the world, with Asia proving a highly attractive market to global companies due to its strong economic growth, large population and ageing population.

In order to expand sales to the Asian market, pharmaceutical companies need to be aware of new and changing regulatory environments for drugs, devices and in vitro diagnostics. New or improved regulations are implemented frequently in Asia, including changes in GMP standards, drug price controls and medical device regulatory systems. The regulations and registration activities are not harmonised in this region and it can be a challenging task.

Pharmaceutical and drug registration is also becoming more regulated throughout Asia. Indeed, the requirements for local drug clinical trials are becoming more prevalent in some countries like Korea and Taiwan. With innovation key to growth in emerging markets, regulatory policies are becoming more open and supportive of innovative drugs. There are several challenges around pharmacovigilance in Asia. India plans to begin interacting with international pharmacovigilance bodies in 2013/14 — by which time it will be among the biggest pharmaceutical markets in the world — before creating an Asia-Pacific centre of excellence for pharmacovigilance in 2014/15.

The complicated regulatory landscape in Asia can be a barrier to success for foreign companies that do not have the experience or resources that are essential to overcome the obstacles in countries such as China, India, Japan, Korea and Taiwan. Third-party guidance and advice may be required as part of any acquisition or any improvement of current standards. In particular, special attention may be required in the following areas:

• Implementation of electronic document management systems.

• Implementation of international regulatory standards.

• Managing local and international regulatory requirements (GMP harmonisation, PIC/S, WHO) and audit preparation.

• Addressing the rising costs of labour, compliance and production.

• Choosing companies for partnership or investment, cataloguing the products and capabilities of a company, including compounds in their drug development pipeline, as well as correctly understanding their strategic relationships and costs of doing business.

• Due diligence, as any acquirer, foreign or domestic, will be looking for certain attributes in targets shortlisted for acquisition. Quality of information is very important.

As a result of these trends and shifting of outsourcing to Asia, companies are setting their strategic sights to make Asia a provider of key contributions to drug discovery and research innovation as well. Increasingly, third-party outsourcing service providers will play a greater role in supporting and managing the delivery of the key business functions like drug development, sales and marketing and regulatory compliance services.

An outsourcing Index from a recent article published by PricewaterhouseCoopers in 2008 is provided above. China tops the list as best outsourcing destination, followed by India, Korea and Taiwan.

The pharmaceutical companies should determine the services that need to be outsourced and have a strategy for execution of these services and managing the relationships successfully. Selection of suppliers and determining the services that need to be outsourced is a challenging task. The ideal partner will have a very good track record, in-depth knowledge about the industry and long business history of building relationships with agencies. A successful service provider should also have the staff capacity to perform the developmental and registration activities. Finally, flexible and cost-effective fee arrangements is another factor that needs to be considered when small companies look for a partner to register their products in Asia.

References

1. ‘The changing dynamics of pharma outsourcing in Asia: Are you readjustingyour sights?’ PriceWaterhouseCoopers white paper, 2008.

2. ‘Regulatory Challenges in the Asia-Pacific Region’, Paraxel enews letter, July 2008.

3. ‘Regulatory Updates for Drugs, Devices and IVDs in Asia’, By: Ames Gross and Rachel Weintraub, 1 May 2005.

4. ‘Medical Product Registration in Asia’, Pacific Bridge Medical website.

5. ‘Realizing the Promise of Asia-Pacific: The Region’s Strategic Shift from Outsourcing to Innovation’, Quintile white paper, 2010.

Dr. Paolo Biffignandi, paolo@elc-group.com.