The value of innovative pharmaceuticals and the potential for Vietnam. Mr. Koen Kruytbosch, Vice-Chairman of Pharma Group Vietnam 6 th October, 2016

Transcription

1 The value of innovative pharmaceuticals and the potential for Vietnam Mr. Koen Kruytbosch, Vice-Chairman of Pharma Group Vietnam 6 th October, 2016

2 PHARMA GROUP Our priority is to ensure that Vietnamese patients have fast and sustainable access to high quality, safe, and innovative medicines in working together with the Government of Vietnam Pharma Group members (the foreign research-based pharmaceutical manufacturers spending more than 10% on R&D) and present in many countries are committed to Vietnam. In the last three years: - Investments in medical information and education: VND 290 Billion - Employees: almost 6000 Vietnamese colleagues (more than 50% advanced-degree) - Innovative products: an important contributor to overall healthcare in Vietnam 2

3 The value of innovative pharmaceuticals and the potential for Vietnam Innovative pharmaceuticals: an opportunity not a cost A long journey: R&D is a long and costly endeavour Healthcare outcomes are becoming increasingly important The TPP and EVFTA make headway for patients and industry development Faster and more sustainable access to innovative medicines for Vietnamese patients Agreements pave the way for investments and technology development in Vietnam Opportunities and challenges for doing business in Vietnam Vietnam - a potential ASEAN hub for innovative pharmaceuticals? Elements to improve the business environment include Foreign Invested Enterprise and IP protection

4 Innovative pharmaceuticals: an opportunity not a cost 4

5 THE LONG ROAD TO A NEW MEDICINE Clinical Data Analysis Registration Full Development Studies in Patients (Phase II) Candidate Medicine Tested in 3-10,000 Patients (Phase III) Large Amounts of Candidate Medicine Synthesized Studies in Healthy Volunteers Phase I Exploratory Development Formulations Developed Extensive Safety Studies Candidate Project Team and Plans Synthesis of Compounds Screening Discovery Early Safety Studies 5

6 THE PHARMACEUTICAL INDUSTRY SPENDS A GREATER PERCENTAGE OF ITS REVENUE ON RESEARCH & DEVELOPMENT THAN ANY OTHER INDUSTRY Note: R&D intensity refers to R&D spending as percentage of net sales. data relate to the top 2,500 companies with registered offices in the EU (633), Japan (387), the USA (804) and the Rest of the World (676), ranked by total worldwide R&D investment (with R&D investment above 15.5M) Source: The 2014 EU industrial R&D investment scoreboard, European Commission, JRC, DG RTD. 6

7 Innovative medicines enable reduction of per capita expenditure on hospitalization Example: Cardiovascular Source: Lichtenberg, F: Have Newer Cardiovascular Drugs Reduced Hospitalization? Evidence from Longitudinal Country-level Data on 20 OECD Countries, (2008) 7

8 The TPP and EVFTA make headway for patients and industry development 8

9 Today s situation in Vietnam Improving the country s global competitiveness and business climate attractiveness Vietnam s global competitiveness ranking in selected areas Business Climate Index Development Active Global Integration Localization strategy Source: WEF Global Competitiveness Report , rank out of 140 economies in and 144 in Vietnam ranks 56 th of 144 countries according to the Word Economic Forum (WEF) Improving 12 places versus last year Low points are in legal framework, education system, IPP and the current focus for VN to improve Source: Business Climate Index, Eurocham Q In spite positive results there are key recommendations to improve on: Increasing the livelihood of people (Safe Medical access and Pharmaceuticals) Increasing consumer choice Legal framework Vietnam s competitiveness (leverage EVFTA/TPP)

10 Political and Regulatory Developments Government messaging is positive FTA Developments Government Goals Quality medicines Universal Healthcare Coverage 80% Value and Volume produced locally ASEAN Hub for Innovative pharma export Trade Agreements (TPP, EVFTA, AEC) Patients: Fast and sustainable patient access to innovative medicines Increased HCP choice through MNC participation in competitive bidding Industry : Increased legal clarity through FIE rights Improved Regulatory Data and IP Protection Q Q Q Pharma Law Tender Circular Toll Manufacturing Circular IPP Circular Q FIE status for MNCs in Vietnam Pharma FDI Roadmap 10

11 Vietnam - a potential ASEAN hub for innovative pharmaceuticals? Fueled by Clear Government Commitment Era of the Celtic Tiger Economic Impact of FDI Economic Stagnation From poorest and least educated country in Europe in 1970 to Life Sciences Powerhouse Ireland : Early Days Ireland A New Policy... The Impact : Ireland Today British Colony for over 8 centuries Famine in 1845 population almost halved from 8M to 4.5M. Independence in 1921 Mass Emigration (pop. falls to 2.8M) Closed Economy - Trade Protection Agriculture Irish income per capita $2,700 one of the poorest in Europe Source: Communiqué International Key policy changes : FDI Foreign Direct becomes key strategic goal Incentives for Foreign Companies in Ireland Social Partnership Political Stability Investment in Education Deepen Roots of MNC s - Research Capability Joined the EEC (EU) Joined Euro in 1999 Financial Crisis MNC Employment : Over 180,000 direct Irish Manuf. & Services Employment : 174,000 directly # 1 >1,200 > M The #1 place in Europe to do business (Forbes, 2010) MNCs have chosen Ireland US companies favorite gateway to Europe EU and Eurozone member access to 500m European consumers

12 Elements to improve the business environment 12

13 Legal framework and roadmap: a phased development and the need for an FIE The current Regulatory Environment PHARMA LAW Enables faster access to innovative medicines for Vietnamese patients Does not specifically allow FIEs, which hinders investment INVESTMENT LAW Provide framework for FDI Pharma industry is on list of conditional sectors INCENTIVES Enablers such as FIE rights and implementation of EVFTA/TPP commitments are precursors for investment Stronger incentives increase the likelihood of foreign MNC investment ROADMAP TO BECOME ASEAN HUB FOR INNOVATIVE PHARMACEUTICAL MANUFACTURING RO Manufacturing Facility Context Export capability Trading All tech is offshore No GAP no current options between Rep Office and manufacturing facility Innovative technology and knowledge could be transferred Potential clinical development Opportunity to export to ASEAN Yes Process R&D No High

14 FIE & distribution Objective: Secure long term investment by allowing for the establishment of a foreign invested enterprise for pharmaceutical trading. Impact: increased investments by international, innovative companies in Vietnamese companies ensuring quality of medicines and advancing Vietnamese healthcare: education, quality and humanitarian projects. Recommendation: 1. Complete implementation of Vietnam s WTO, TPP and EVFTA commitments 2. Full liberalisation of distribution services Country Vietnam Allowed to establish a legal entity? IMPORT AND DISTRIBUTION RIGHTS a regional comparison (2015) If yes, is the legal entity/rep office allowed to perform the following functions: import/trading? Sell to licensed distributor Sell to Trade Sell to Hospitals Distribute Promote Education Malaysia Philippines Indonesia Hong Kong Taiwan Singapore Australia N. Z. For NCE / products not locally producible Only product license holder can import. Up to a certain limit Hospital registered pharma merchants RX: direct consumer activities not allowed 14

15 The value of innovative pharmaceuticals and the potential for Vietnam Our priority is to cooperate and work closely with the Vietnamese Government to ensure that Vietnamese patients have fast and sustainable access to high quality, safe, and innovative medicines Innovative pharmaceuticals: an opportunity not a cost Medicines are among the most powerful tools we have for patients to cure, treat and prevent illness both now and in the future A long - and costly - journey to develop a new drug: benefit must be measured on total health outcomes The TPP and EVFTA make headway for patients and industry development Vietnam has a (closing) window of opportunity to leverage the FTAs and focus of the international business community to position itself within ASEAN PG is interested in working with the Government of Vietnam and 3 rd parties to explore ways to maximise this opportunity Opportunities and challenges for doing business in Vietnam Vietnam has the potential to become an ASEAN hub for innovative pharmaceuticals but the road is long (2035?) and requires a dedicated and holistic approach and must be driven by Government Key enablers to encourage investment in innovative pharmaceuticals include the right to establish a Foreign Invested Enterprise and improved IP protection

16 Thank you for listening!