Country Report: Taiwan - Pharmaceutical Executive


Country Report: Taiwan

Pharmaceutical Executive


Picture of National Health Research Institutes (NHRI) facilities
Hsing-Jien Kung, president of Taiwan's National Health Research Institutes, believes that "instead of developing along the same lines as the industry in the US," Taiwan should "look to position itself as a niche player, that can offer innovative solutions to larger countries."

Rongjin Lin, chairman of TTY Biopharm, perhaps the most pioneering and internationally successful of Taiwan's 'old guard' of generics companies, puts it more succinctly. He tells his peers in the industry, "Find a cost advantage, or find a niche!"

ScinoPharm: By the numbers
Costs in Taiwan aren't too bad, with a corporate tax rate of 17 percent and labor outlays that the industry reports are stable relative to China's more inflationary environment. But Taiwan's generic industry, populated by SMEs who in this small, M&A-averse market may form consortia but not mega-companies, lacks the scale and vertical integration to play the commodity game.

Karen Wen, President, Mycenax Biotech Inc.
Taiwan has opted for a niche. Charles Lin of US-focused generics producer Lotus Pharmaceuticals reports, "We have focused on so-called 'multiple barrier' products—products that are difficult to produce, and therefore represent significant barriers to entry: formulation barriers, potency barriers, bioequivalence barriers, and so on. We have partnered with strong local API producers like Formosa Laboratories, which are also capable of operating on this level. Our strategy is to avoid competition, rather than meet other companies head-on."

Wen Lung Su, Chairman, Taiwan Advance Bio-Pharmaceutical Inc.
Charles Lin hopes that this strategy will be his entry ticket to the global market—especially the US. He says that Lotus doesn't want to be a 'local' company anymore. Like many of its peers, Lotus sees diminishing returns from its traditional Taiwan-based business, and is constrained by the size of the market even on good years. "Most of us are trying to go global, but the problem is in the capability. Only two or three local generics companies, ourselves included, are actively pursuing an international agenda," says Lin.


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