Thailand: Critical Need for New Investment

Feb 01, 2007

"Now that Thailand can guarantee healthcare for a vast number of our people, we are on our way to becoming the medical hub of Asia. This year only, more that one million foreigners received our high-quality healthcare. Other countries in the region might try to position themselves as healthcare hubs too, but we are different with our modern hospitals and good qualified human resources (HR)" claimed Dr. Prat Boonyawongvirot, permanent secretary of the ministry of health (MOH).

Thailand might already have become a medical tourism destination but the country still needs to sort out serious issues on its local market as the country healthcare system is largely underfunded, the country depends on imported drugs and APIs, local companies are lagging behind in terms of manufacturing practices and international pharma companies have delocalized their production to neighboring countries.

Universal Health Coverage scheme

Courtesy of Pacific Healthcare (Thailand)
The challenge for the self-proclaimed "Land of Smiles" is to manage the sensitive combination of international competitiveness and social justice.

"The quality of healthcare is very satisfactory," says Dr. Prat. "Today, 47 million people are covered by the new 30-Baht Scheme, the Social Security Scheme covers another 10 million and the rest of the population is covered by a civil servant scheme. In our Kingdom, everybody is guaranteed access to healthcare."

Dr. Prat Boonyawongvirort
The pioneering 30-Baht Scheme (also known as Universal Healthcare Coverage) Dr. Prat refers to was launched in 2001, covering six provinces and all MOH hospitals. The idea of offering cost-subsidized healthcare at the point of delivery wooed millions of low-income people. Eligible patients registered with hospitals closest to their homes and needed only to pay 30 baht (about 71 cents in US currency) for a hospital visit for treatment of all illnesses. Apart from guaranteeing healthcare to the lower income group, the 30-Baht Scheme has enabled people who were not covered under any program to access necessary medical treatments. Previously, a visit to the hospital required a fee of 200 baht (around $4.50) or more.

The new government, appointed last fall following a bloodless military coup, has already declared that the 30-Baht Scheme will be replaced by free medical treatment throughout the country. "Hospitals won't be richer or poorer whether or not they receive 30 baht," said the new public health minister Mongkol Na Songkhla.

But there is across-the-industry fear that this could harm the already insufficiently funded healthcare programs, and together with the price erosion put increasing cash flow pressure for the stakeholders.

GPO fulfilling the need of the Thai people

Lt. Gal. Mongkol Jivasantikarn
The first company to be hit could be the state owned Government Pharmaceutical Organization (GPO). GPO enjoys the benefits of the government's former pharmaceutical market regulation and holds a near monopoly over the supply to the public sector. (Under the old regulation, public hospitals were legally obliged to purchase 80 percent of their drugs from the GPO and only 20 percent from private organizations.) GPO plays a prominent role for locals as the producer of the simplest drugs like penicillin and paracetamol and as the manufacturer of complex cocktails for the treatment of HIV and AIDS.

Today, the state-owned company produces more than 200 items, most of them medicines included in Thailand's essential drug list. GPO also manufactures herbal medicines, biological products, and vaccines for diseases including Japanese encephalitis (JE) and diphtheria-poliotetanus (DPT).

"GPO fulfilling the need of all Thai people. Therefore, we have to focus on producing generics by volume and we have to be able to constantly increase capacity while maintaining quality. Our goal is to become the leading generic pharmaceutical manufacturer in Thailand and the near region in producing medicines of standard quality at reasonable prices," claimed Lieutenant General Mongkol Jivasantikarn, GPO's managing director.

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