Taiwan: Pharma at the Tipping Point - Pharmaceutical Executive


Taiwan: Pharma at the Tipping Point

Pharmaceutical Executive


Cheng-ho Tsai, Superintendent of Mackay Memorial Hospital
As a result of ECFA, the impending review of Taiwan's national health insurance system, and the country's growing importance as a clinical trial hub, the interest from multinational companies in the country is on the rise. However, with a market size of 23 million, it is inevitable that some pharmaceutical companies are willing to market their drugs in Taiwan, but not willing to establish their own operations in the country. Mark Lee, vice chairman of Morris Enterprise, one of Taiwan's leading distributors, explains the advantages of choosing a Taiwanese distributor over entering what can be a very challenging business landscape alone: "The price of pharmaceuticals had been cut by the government year on year and this has been constantly shifting the landscape for distributors and pharma companies in Taiwan. Here at Morris Enterprise, we have a very good relationship with the decision makers in a lot of hospitals. Due to compliance with the SOPs and our familiarity with all the procedures, we make the registration and bidding process run a lot more smoothly than our competitors."

In order to further grow their business, Morris has chosen to diversify its product lines. Today their business is still 85 percent pharmaceuticals (as the management team within the company predominantly has expertise in this field), but Lee explains how Morris' nutraceutical and cosmoceutical business is complementary to this: "We work with a lot of hospitals already, and the same management groups in hospitals also deal with nutraceuticals and cosmoceuticals. We still work with the same group of people and capitalize on this expertise."

JM Chang, CEO of Pharma Power Biotec
Orient Europharma (OEP) has turned the distribution model on its head, as Peter Tsai, the company's founder and president explains: "Distribution is a tricky job. If you are unsuccessful in marketing a particular product, the licensor is disappointed in the work you do; if you are successful, then the company starts to think that they should enter the market themselves. As a result, OEP also needs to develop its own products, and these will come through our expertise and capabilities in new formulation." To tackle this issue, Orient Europharma moved away from the traditional model of distribution and established Orient Pharma (OP), "the manufacturing arm of the company." A new plant was built, and today OP works to develop new formulations, delivery systems, and indications in collaboration with its partners "that do not have manufacturing facilities of their own. We manufacture for them as well as promote the products in our own territory. The current example is that we are working with DURECT in the US, who will market the drugs in their country but will rely on us for high-quality manufacturing." By investing more deeply into the value chain, OEP are actually strengthening their traditional business of distribution, as Tsai explains: "The new plant gives OEP the capability to create a synergistic effect as we begin to harmonize our company product portfolios throughout the Southeast Asian regions where we are present. This gives us an advantage when we want to license in new products, as we can show our partner the capabilities that OEP has."


CY Huang, President & CEO, NatureWise
"There has been a marked improvement in intellectual property enforcement here over the last few years," says Mei-hua Wang, director general of Taiwan's Intellectual Property Office, which operates under the Ministry of Economic Affairs. "Last year the country was taken off the USTR Special 301 Report, which is a very positive response from the United States, and proves that they appreciate the efforts that have been made here to enhance IP protection."

For those that only know of China's poor record for the protection of intellectual property rights (IPR), it might be easy to assume that Taiwan is equally lax about IP regulations. However, this is far from the case. Wang explains that "for the Taiwanese government, intellectual property rights are very important, as they are one of the key factors to attracting foreign investment. As a result, for a number of years they have been focused on improving the overall IP environment in Taiwan. The Taiwan Intellectual Property Office (TIPO) was established in 1999 in order to centralize the government's efforts to improve IP regulation and enforcement." The achievement of being taken off the USTR Special 301 Report is recognition of the work that has been done to improve the IP situation in Taiwan.

Alex Liu, Chairman, Golden Biotechnology
Wang is keen to stress that "Taiwan's President and ministers fully understand that high IP protection is very important for attracting foreign investment, so they asked TIPO to strengthen IP protection. Also, for the last 10 years, Taiwan has faced pressure from both the US and Japan to take this action. Because Taiwan's main industries are focused on innovation and R&D, it knows that if you want to internationalize your business, you must have a high-quality patent and promote your trademark, so Taiwan also saw the need to change as a result of its industry. The country also sincerely wants to take care of this issue. Coordination and collaboration between agencies is very difficult, but by assuming this role TIPO understands that these things have to be done well."


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