How Medical and Pharmaceutical Companies in Europe are Expanding into the Asia Pacific

Dimitrios Tsakounis is the Director for Tsaks Consulting - a specialist bid, tender and international marketing consultancy in the UK, Australia and Greece.

European based pharmaceutical companies are increasingly following the lead of other industries in expanding overseas into the Asia Pacific. With governments and the private sector overseas most commonly adopting a formal procurement process to purchase medical, pharmaceutical, and healthcare goods and services, winning businesses through the bid and tender process is becoming increasingly commonplace.  

The formal procurement practices adopted by Asia Pacific Governments are largely like those in Europe with critical, localised differences often being the difference between securing and failing to secure a contract. Whilst joint venturing with local firms located in the Asia-Pacific is a useful go to strategy for the short and medium term, and sometimes a necessary strategy in countries such as China and Vietnam, European pharmaceutical companies are increasingly deciding to go it alone and bid for contracts directly.

Three challenges that are generally faced by European companies expanding into the Asia-Pacific include:

Tender identification. Tender notification services will send countless tender opportunities through for contract opportunities across the globe. The challenge is to filter through these opportunities and find potential contract you have a strong change of being successful in. A local presence is helpful, and a focus on the country and attaining the relevant regulatory approvals is also key. Europe based pharmaceutical companies often have limited resources and tenders and bids are a labour-intensive process.

As part of the tender identification process, companies are generally adopting a bid/no bid process tailored to the specific regional including:

• Carefully reviewing the tender criteria including the mandatory criteria. In addition to the usual insurance requirements, local content requirements and Indigenous workforce requirements are often critical.
• Assessing the quality, prior experience, existing government contracts and performance of any potential local partners. This includes their track record of delivering on contracts to government and their ability to comply with any localised tender criteria.
• Assessing the extent of the companies own local presence to ensure compliance with the tender and the ability to put forward a compelling bid. For example, delivering pharmaceutical products to regional and remote hospitals often requires an established warehouse and other distribution infrastructure.
• Assessing the current players in the market and reading between the lines of the opportunity. Look at how many potential competitors there are as well as the reason for the tender being released. In some cases where a drug or medicine is about to go generic, the incumbent provider may have an aggressive pricing strategy and very strong relationship in place. This needs to be considered in the bid/no bid process and an aggressive and highly localised submission may be needed to secure the contract.

Regulatory approvals. Arranging the necessary regulatory approvals can be a real challenge with the need for the translation of key documentation and differing regulatory processes for each country in the Asia Pacific. Some smaller markets in the Pacific, such as Fiji and Tonga, have slightly less formal regulatory and approval processes - working locally on a face to face basis with government officials is key.

Other countries, such as China, Thailand and Australia have well developed and structured regulatory approval processes that are often highly complex with substantial supporting documentation required for many simple pharmaceutical products (and services).

With local knowledge (which often involves engaging local regulatory consultants), and a comprehensive understanding for the regulatory environment, the process for gaining regulatory approval can be made easier. For example, there are opportunities to take advantage of mutual recognition laws between Australia and New Zealand. This enables pharmaceutical companies to penetrate both markets at the same time and minimise regulatory expenses.

Regulatory approvals (such the TGA approval in Australia) are often pre-requisites for winning government contracts. Therefore, the need to efficiently gain regulatory approval is often critical.

One strategy European pharmaceutical and health companies are adopting, is to make an application for regulatory approval, and provide the relevant application number and reference in the bid. With lead times often stretching out to up to three and sometimes six months for a tender result – and regulatory approvals sometimes taking a similar length of time, this strategy has worked with both the submission and application being made concurrently.

The Asia Pacific market is often well worth the effort to expand due to:

• The size of the markets in countries such as China, Thailand, and Australia.
• The significant number of local players in the market that present as strong potential joint venture partners.
• The formal procurement process and transparent procurement process in most countries which ensures a level playing field and real possibility of winning government contracts.

Where there are mandatory criteria for certain regulatory approvals to bid, these need to be addressed and adhered to. Locally based consultants are usually best placed to speed up this process and ensure organisations quickly gain access to the Asia Pacific market.

Writing a compelling bid. To win a government or private contract in a foreign country, European Pharmaceutical companies need to write a quality and professional proposal. This, coupled with robust business development efforts, are critical to sales success. The standard of bids and tenders are very high in the pharmaceutical industry globally. This extends to the Asia Pacific market where many large players operate, and local companies have well established in-house tender and bid writing departments. Companies need to submit well written, concise, and technical bids which are well presented graphically.

Overseas markets such as the Asia Pacific present substantial opportunities for European companies looking to expand abroad and once overcoming the above challenges, many companies are seeing strong success. The question remains, if all companies are writing quality bids and proposals, how do organisations set themselves apart?

A lot of it comes down to localising your bid. This means:

• Providing a comprehensive plan around the employment of local labour and workforce personnel. Whether it be production, packaging, warehousing, logistics or even training, a comprehensive plan on employing locals as part of any government contract is critical to writing a successful bid.
• Engaging with Indigenous communities. This applies to some countries in the Asia Pacific region such as Australia and New Zealand. When submitting a bid, organisations need to produce a robust indigenous engagement plan. Whether it be providing a training program to transfer critical skills from Europe to Australia, to engaging and supporting Indigenous businesses as contractors in your proposed supply chain, it’s critical to present well researched and practical methods of engagement with Indigenous groups. Some organisations have explored joint ventures with Indigenous organisations in the pharmaceutical and medical industry to penetrate the market more easily.
• Translating documents and submitting a culturally acceptable bid. Whether it is showing appreciation for religious events in Thailand, to considering cultural etiquette in China, and writing a Welcome to Country in Australia, your bid needs to align with the cultural values and system of each individual country.

With a methodical plan, strong preparation, and a localised approach, European based pharmaceutical companies are increasingly overcoming the barriers to entering the Asia Pacific market and securing government contracts.