AN INDUSTRY ADAPTING TO A CHANGING ENVIRONMENT
Local players are indeed getting ready for increased competition. While historically, multinationals controlled 80% of the
market, in recent years local companies have steadily increased their share, and locals now represent 27% of pharma business
in the country. In addition to United Laboratories (Unilab), the No. 1 company in the Philippine pharmaceutical industry and
a local Phillipine brand, other local players have carved out a space for themselves, including Pascual Laboratories, GX International,
and Natrapharm. These companies have gained leading positions in some therapeutic areas, and are challenging multinationals.
To that end, multinationals are coping with the challenges presented by the MDRP by making modifications to existing pharmaceutical
lines, and expanding their offering outside of traditional pharmaceutical products altogether, by moving into areas such as
consumer healthcare and nutraceuticals. Otsuka (Philippines) Pharmaceutical, an affiliate of the Japanese company—and active
in the Philippines since 1998—has adopted this strategy. As Leopoldo Dimerin, president and general manager, explains, "as
a solution to cope with unpredictable scenarios, we have extended our pipeline by introducing line extensions with a new delivery
system—like we did for our antiplatelet product, from a tablet to a powder preparation, for stroke patients who had difficulty
in swallowing." The company continues to invest in various pharmaceutical products, and as Dimerin points out, "there will
be new products and line extensions in the next three to four years and we expect them to be the growth drivers for the pharma
segment." There are still a number of pharmaceutical products developed in Japan that are not yet available in the Philippines,
and a key objective of the company is to expand their pharmaceutical portfolio in the coming years.
Growth from diversification
In addition to its pharmaceutical business, which currently accounts for 90% of its total revenue, Otsuka (Philippines) Pharmaceutical
has diversified with the recent launch of new medical devices. The company also plans on strengthening its consumer healthcare
and its nutraceutical businesses—areas that have strong growth potential—and is looking into the possibility of introducing
other products to accompany their successful health drink, Pocari Sweat. Dimerin hopes these strategies will bring the company
into the top 15 in the next seven to 10 years.
DPI – The New Frontier Of The Pharma Industry
Multinational companies are not the only ones who have diversified their production; local players have also branched out.
Market leader Unilab—which was founded in 1945 as a drugstore, and evolved into the leading pharmaceutical company, with affiliates
in Indonesia, Thailand, Malaysia, Singapore, Hong Kong, Vietnam, and Myanmar—is now looking into consumer healthcare. In the
words of Joey Maria Ochave, corporate vice president of the business development group, "the basic DNA of Unilab is to provide
a more affordable quality option. Initially we were offering only medicines, but we have expanded our mandate to include healthcare.
We are not focusing on pharmaceuticals only. We have started going into other businesses as well."
Drilling down further between Ethical and OTC, where Ethical is now at its lowest of negative 4.19% while OTC still above
the line at 2.09% [Source: IMS Philippines]