Summary
The Thai pharmaceutical market holds a relatively modest long-term potential, given the difficult operating conditions for foreign companies, characterised by the lax intellectual property (IP) regime and reimbursement and purchasing policies biased in favour of the local industry, which will conspire to promote the production and use of cheaper and locally produced copy drugs. On a positive note, growing population, healthcare sector modernisation and economic development will ensure that the pharmaceutical market continues to develop at a steady pace. At present, prescription drugs account for around 66% of the market, with the figure likely to rise in the coming years, given the government's efforts to extend health insurance coverage and provide antiretrovirals (ARVs) to HIV/AIDS patients.
Over-the-counter (OTC) products are also making inroads, with the authorities encouraging the use of traditional medicines through regulatory changes. At over 55% of the market by value at present, generics will continue to challenge the branded sector's shares, although original medicines are set to improve their position over the forecast period, in the face of changing therapeutic needs, the international pressure for the modifications of the IP environment and the expansion of retail channels. In regional terms, Thailand will continue to lag behind a number of its Asian neighbours, with the country placed in ninth position in BMI's Business Environment Rankings for Asia. Nevertheless, the government will continue to advance Thailand's life sciences sector by promoting the country as an attractive location for clinical research trials. Such efforts will, however, be hampered by the rise of mainland China and India as regional destinations for foreign direct investment (FDI), with multinationals keen to explore their fast-growing and populous markets. Additionally, the substantial presence of counterfeit drugs will continues to pose a problem, although the country will remain an overall importer of medicines. In the forecast period, the trade balance will further shift in favour of imports as healthcare demand increases, and as regional Association of South East Asian Nations (ASEAN) harmonisation efforts reach maturity. A free trade agreement (FTA) with the US is currently under discussion, potentially improving the position of the foreign research-based pharmaceutical industry at the expense of local producers. Demographic changes will particularly boost the use of novel drugs for cardiovascular, neurological, cancer and antiviral indications that are not treated effectively by currently available therapies, as well as new versions of existing prescription antihistamines, analgesics, antifungal agents, cholesterol reducers and acid reducers.
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