Opinion | China's rapid integration with ASEAN through Pharma firms: Its latest footprints in Singapore

By Augustus K. Yeung

If you are enrolled in MBA study, exploring corporate strategy, this article is the right stuff for you; it provides "text & cases" for your intellectual nourishment.

If you are a student of trends in business, this article affords examples of Chinese pharmaceutical companies making their way to the Southeast Asian market, notably Singapore.

If you are a competitive investor, or interested in the drug industry or market, this is exactly what you need for making a kill in the "battlefield"– in the long term.

Wisdom is not mine to give; I am just highlighting the stories of the early birds, which is starting an innovative trend in modernizing medicine, traditional Chinese medicine (TCM) included. The industry's intent is going global, taking Singapore as a gangplank.

But why Singapore?

Singapore, the city state boasts advanced medical resources, efficient management, and many more, winning it a developed status.

In this article, we examine business activities in the drug industry – showing how and why China eyes it for bigger global footprint.

Bearing in mind Singapore's improved capabilities, competitiveness and international initiatives, Chinese pharmaceutical firms are expanding business in Singapore to tap into a new "battlefield".

1. For example, in late December, China Medical System (CMS), a Shenzhen, Guangdong province-based biopharmaceutical company, announced the acquisition of a factory in Singapore through wholly owned subsidiary CMS Medical Venture Ptd Ltd and non-wholly owned units Rxilient Health and PharmaGend Global Medical Services Pte Ltd. The factory, which is in Tuas Biomedical Park in Singapore and occupies 60,000 square meters, is expected to support CMS' contract development and manufacturing organization (CDMC) business in Southeast Asia.

"With Chinese innovative pharmaceutical companies deepening their globalization drive, exploring a 'second battlefield' in Singapore has become a must. With its role as a hub for intersection of East and West, as well as geographical advantages of being part of the Southeast Asian market, Singapore provides industrial and international support for Chinese pharmaceutical companies going abroad to Southeast Asia," said Zhang Jue, a pharmaceutical expert at VBData.cn. a Chongqing-based healthcare service platform.

Specifically, Zhang said Singapore owns advance medical resources, efficient management, abundant talent resources, a comprehensive medical product administration system, a developed infrastructure, and an efficient logistics system. Several high-quality biopharmaceuticals are manufactured in Singapore, and more than 15 renowned multinational drugmakers have established factories there.

Another case. Other Chinese pharmaceutical companies have also been accelerating their commercialization process in Singapore over the past year.

2. In March, Shanghai Junshi Biosciences Co Ltd announced collaboration with Singapore-based Rxilient Biotech on development and commercialization of an antibody drug – through a joint venture in nine Southeast Asian nations: Thailand, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines and Vietnam.

Li Ning, CEO of Junshi Biosciences said, "Southeast Asia boasts a thriving pharmaceutical innovation environment, flexible drug regulatory policies and diversified medical security systems, so it has great potential as an emerging market for innovative drugs."

The company said it is planning to launch the antibody drug in more markets. At the end of last year, the product was approved by the U.S. Food and Drug Administration. Many regulatory authorities in Southeast Asia rely on the FDA results, and the application process is more about completing the registration process.

"Obtaining high-quality endorsements from the FDA will also greatly assist in accelerating the approval of more indications of the product, especially in Southeast Asian countries where companies can accept applications for indications already listed in China," Li said.

"With rapid economic development and the rise of the emerging middle class in Southeast Asia, the region will play a role – as a new engine of growth for the global pharmaceutical and biotechnical market," said Lee Ker Yin, CEO of Rxilient.

"From Rxilient to PharmaGend, a closed loop for Chinese pharmaceutical companies' new globalization path is gradually formed – new domestic drugs are produced using Singapore as a development platform and sold on the global market," Zhang said.

Market consultancy CPhI Insight expects that by 2025, pharmaceutical sales revenue in Southeast Asia will surpass $44.4 billion. So far, an increasing number of pharmaceutical companies from home and abroad have flocked to Southeast Asia to establish factories, distribution channels and marketing networks.

Hong Yong, an associate research fellow at the e-commerce research institute of the Ministry of Commerce, said; "The fact that Chinese pharmaceutical companies are expanding business to not only developing countries in Southeast Asia, but also Singapore demonstrates that their innovative capabilities, competitiveness and international strategies have been improved. As an important hub of both global pharmaceutical research and development and production,

Singapore presents higher requirements for drug enterprises' R&D capability, product quality and international compliance. Successfully entering and gaining a foothold in Singapore shows that they have made great progress in supply chain management, quality control and adapting to the global market." (Source: China Daily)

If you are like me, concerned about China's development, tracking its footprints in ASEAN is meaningful.

If the future of Asia interest you, any of China's developments in the Southeast Asia are worth following. You will cherish China's rapid penetrations into the Southeast Asian market.

Modernization of TCM and high-tech drugs are an integral part of China's strategic partnership.

If you have been following the development of U.S.-China relations in recent years, we share the concern that good relationship must be maintained or move one notch up – because Asia's economic prosperity depends on political stability. Something America can almost guarantee – if it chooses.

To conclude, the heavy American military presence in Asia, may be making life difficult for China – because of its interference in the Taiwan Strait, and instigation of Vietnam as its potential vasal state – but its scientific research establishment such as the FDA is highly authoritative and helpful to MNC drugmakers in Asia's developing countries, China included.

In this context, it is imperative that U.S.-China relations remain stable. And peace and prosperity in Asia-Pacific may be guaranteed!

 

The views do not necessarily reflect those of DotDotNews.

To contact the writer, please direct email: AugustusKYeung@ymail.com

Read more articles by Augustus K. Yeung:

Opinion | The rhapsody of great power politics: Chinese people in Taiwan may not have to pay price

Opinion | In Taiwan's election, once again history repeats itself! Beijing may need a plan B