Taiwan: Pharma at the Tipping Point - Pharmaceutical Executive

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Taiwan: Pharma at the Tipping Point


Pharmaceutical Executive


AN ASIAN ENIGMA—THE TAIWANESE ENTREPRENEURIAL SPIRIT

Taiwan's flagship national pharmaceutical companies have been quietly toiling away for the last few years, carving themselves an impressive niche in selected international markets. Yung Shin is Taiwan's No. 1 local pharmaceutical company, and has had a presence in the US since 1994 and in China and Malaysia since 1996. Currently around 50 percent of Yung Shin's business comes from international markets, and in the years to come the company will look to build up its relationships in markets with high entry barriers: Singapore, Malaysia, China, and Japan, capitalizing on the experiences and expertise it has acquired in its 60 years of existence in Taiwan.


Carol Cheng, COO of IRPMA
Yung Shin is one example of a Taiwanese company whose top management benefitted from long years studying abroad before coming back to Taiwan to establish or take over their own businesses. Albert Liou, corporate vice president and general manager of the Asia Pacific region for Parexel, explains that "Taiwan produces a lot of good professional talent. Many Taiwanese people have strong international educational credentials, especially from the United States. A lot of people choose to study overseas, and many of these people return to Taiwan once their studies are completed." Liou counts this business experience as one of the main factors for choosing to establish his company, Apex International, in Taiwan, which was eventually acquired by Parexel.

Mark Yang, general manager of Hospira Taiwan, acknowledges that his experiences in the US certainly helped him to fit seamlessly into the corporate culture of a multinational company operating in Taiwan, posturing that his American MBA program "enabled me to work with my colleagues in the US and Australia in a much more rationalized manner. We don't have any difficulty communicating about new business models or business ideas or business language." He also believes that there is another factor to his success, namely that "being born in Taiwan helped me to fit into the local scene. I can work here without any barriers, unlike American-born Taiwanese or Chinese people. Sometimes these people have difficulty integrating back into the Eastern culture." Under Yang's supervision, Hospira has achieved incredible results since the company was spun off from Abbott in 2006—today the company has more than 90 percent market share in the fields of large volume infusion (LVI), devices and patient control and analgesia (PCA) devices. Yang explains how Hospira achieved such success in Taiwan: "We moved very aggressively. As part of Abbott we had around a 67 percent market share. When Hospira moved out under its own roof the company became more aggressive in this segment and fought for the accounts of our competitors. Hospira Taiwan's sales revenues have grown to the point that the company here now competes with Big Pharma."


Wei-li Shao, General Manager, Eli Lilly Taiwan
Although many multinational companies in Taiwan employ local managers to run their business in the country, GSK is one company that has taken the decision to employ an expat as general manager. Thomas Willemsen, vice president for the company, suggests that GSK "really needed someone to accelerate the transformation of GSK in Taiwan. Of course, my experience in Asia was also a deciding factor. I've been in China for five years, and in Taiwan for five years, I speak Chinese and I have been working in the pharmaceutical industry for 12 years." With his experience of the Chinese-speaking world, perhaps Willemsen should be counted more as a local than a foreigner in Taiwan.


Uwe Dalichow, General Manager, Bayer Schering Pharma Taiwan
One obvious advantage of employing a Taiwanese national in Taiwan is that it is far more likely that they will be committed to their country for the long term. A charge often leveled at the managers of smaller country affiliates is that they are only considering short-term strategies to propel them to the next market rather than being concerned with the long-term growth of the affiliate. Today, Eric Wang is general manager of Novo Nordisk Taiwan, but has been working at the affiliate since it was first established 16 years ago. Wang believes that having this experience and perspective has allowed him to grow the business in the way that Novo Nordisk aims for across the world: "We know that we should work better to help people with diabetes have better glycemic control. Once we meet we can work together on these problems, and because we are small company, we don't have a lot of bureaucracy. My door is always open." Although this long-term culture building is not for everyone, Wang is perfectly at home at Novo Nordisk: "Most expat general managers would be very unhappy to pursue a long-term market strategy that was not focused on short-term performance. I want to stay here for longer, and pass on this sense of responsibility to my staff."


Key export markets for Taiwan (courtesy of IBMI)
ScinoPharm is one of Taiwan's most interesting and innovative companies. Since 1997, the company has worked tirelessly to become one of the world's leading players in the field of Active Pharmaceutical Ingredients (APIs), helping their customers be first to market with their generics. This was not an easy process for a Taiwanese company; finding investment at first proved difficult for Jo Shen, founder, president, and CEO of ScinoPharm. She explains: "ScinoPharm's business model is that before the train comes into the station we are ready to jump. Initially this business model was incredibly foreign to local investors. The first difficult concept for them was the role of GMP. They knew that GMP was important, but they did not fully understand that if an API manufacturing plant does not pass a GMP inspection from the US, then its APIs cannot be used for any customer who wants to sell their formulations in the US." The importance of adhering to intellectual property (IP) rights was also a key issue for the company: "Investors didn't realize how powerful a skill it was to have that capability, and to be able to enter a market wherever you have taken care of the patent issue, and conversely how a particular patent situation can eliminate your chance of competing." Despite agreeing to these two aspects of the business model, investors were still wary of ScinoPharm until the company started to break even, but now it is hailed as an unrivaled success in Taiwan. Shen explains that the company's international vision is what has driven the eventual growth and prosperity of the company: "For most local companies, their first market view is Southeast Asia or China, and yet there is a smaller group today trying to aspire above this and penetrate regulated markets. In those cases there is still a lot for these companies to do to fully understand the patent situation and GMP requirements. Both of those things require investment. Right from the beginning ScinoPharm's business model was that the world was our market—there is no reason why being registered in Taiwan means you can only look at Asian markets. Our major market has always been the top tier, the most regulated markets: the US and Western Europe."


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