Critical Success Factors for the Korean Generic and API Industry in a post FTA Environment DAVID...

Critical Success Factors for the Korean Generic and API Industry in a post FTA EnvironmentDAVID HARDING

SEOULJUNE 28-29, 2007

AGENDA

• About Thomson Reuters

• Possible effect of KORUS Free Trade Agreement on Korean generic and API industries

• The role of information in generic product development

• Horizon Global™: an industry standard for generic product selection

ABOUT API INTELLIGENCE (fmr Newport Strategies)• Founded in 1990

• A business of the $7bn Thomson Reuters Corporation

• A unique research focus: tracking global generic API development and manufacturing activities

• High quality, “must have” information delivery to executives in– Strategy, Planning and Product Targeting

– Business Development & Licensing

– Competitive & Business Intelligence

– R&D and Regulatory Affairs

– API Sourcing

– Patents & Intellectual Property

• Relied upon by the majority of the world’s generic pharmaceutical companies and API manufacturers

• Headquartered in Portland, Maine, USA

GENERICS: A $90B GLOBAL OPPORTUNITY

Total World Pharmaceutical Sales: $600bn

US, Canada: $50bn

Latin America: $2bn

Western Europe

$17bn

Rest of World: $4bn

Eastern Europe & Russia: $10bn

Source: TS Research, IMS Health, VOI PharmaHandbook

Japan: $4bn

China: $3bn

KOREA & THE KORUS FREE TRADE AGREEMENT

• Korean drug industry was $7.8 billion in 2005 of which generic drugs accounted for 15% of the market¹

• Korean population is aging more rapidly than any other country with healthcare spending by those over 65 years old growing by 10% to 20% annually¹

• KORUS FTA includes commitments to improve access of US innovative and generic pharmaceutical products to South Korean market²

• As of 2005, foreign company share of the Korean market was at 26%¹ Source: ¹ VOI PharmaHandbook 2006,IMS Health; ² www.ustr.gov Trade Facts

HOW COULD THE FTA IMPACT KOREAN GENERICS & API COMPANIES

• It will drive more branded sales as generics will see increased barriers to entry in Korean market

• It will increase foreign company share of Korean market

• It will provide enhanced access to the US market for Korean API and dose outsourcing supply

• It will have negative impact on Korean companies (both dose and API) given Indian and Chinese competition

• It will increase competition for domestic company share of Korean market

Korea has the expertise to compete in other regulated markets and should look to US and EU supply opportunities for growth!

WHAT CHALLENGES WILL KOREAN GENERIC & API COMPANIES FACE IN THIS NEW ENVIRONMENT?

• India is excellent at low-cost, high quality finished dose products

• China is known for low-cost, high quality API and intermediates

• In- and out-licensing will be as important as domestic in-house product development

• A number of products worldwide coming off patent with a growing number of competing generic companies

• Early access to API is still the key to speed to market and success

AVAILABILITY OF HIGH-QUALITY API IN INDIA, CHINA & KOREA

Source: Newport Strategies Horizon Global ™

74

2518

817

104

0

20

40

60

80

100

120

Established Less Established Potential Future

Nu

mb

er o

f C

orp

ora

te G

rou

ps

India

China

Korea

US DMF FILINGS BY INDIAN, CHINESE & KOREAN API MANUFACTURERS


14 144 9 2 2 2 0 3 3 3 3

83

138

202

283

319

593743

3246

96

534536

104

27

6117

0

50

100

150

200

250

300

350

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Nu

mb

er o

f T

ype

II D

MF

s

India

China

Korea

COS FILINGS BY INDIAN, CHINESE & KOREAN API MANUFACTURERS

0 2 04 2

74 2

58

37

6056

40

53

1918

115

166

3

27

2116

9

35

823

0

10

20

30

40

50

60

70

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Nu

mb

er o

f C

OS

Fil

ing

s

India

China

Korea

TYPE I JAPANESE DMF FILINGS BY INDIA, CHINESE & KOREAN API MANUFACTURERES, 2005-2007

57

100

111 India

China

Korea


NUMBER OF API PLANTS INSPECTED BY THE US FDA SINCE 1990 IN INDIA, CHINA & SOUTH KOREA


5 4

45

68

6051

0

10

20

30

40

50

60

70

80

Sites Groups

Indian Ownership

Chinese Ownership

Korean Ownership

ANDA APPROVALS BY INDIAN GENERICS


0

20

40

60

80

100

120

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Tentative

Final

GENERIC DRUG & API MANUFACTURERES HAVE MANY QUESTIONS…

What should I develop?

How big is the market?

What is the patentor exclusivity

situation?

Where do I sourcethe API?

Who is competingwith us?

Do I partner ordevelop alone?

Where should I launch?

Should I focus on regulated

markets?

THE GENERIC PRODUCT DEVELOPMENT PROCESS

Targeting EvaluationDeal

Making Formulation

Dev’t Registration & Review

Launch

Target possible candidates for development

Research product candidates in detail

Find the right partners

Make products quickly and safely

Get first approval

Deliver to the customer!

LaunchL – 18 monthsL – 8 years L – 7 years L – 6 years

THE ROLE OF INFORMATION IN THE GENERIC PROCESS

Information Needs - Data

• Manufacturing Capabilities*• Bioequivalence• Stability• Pharmacodynamics• Toxicity• Country Regulations*• Pack Pricing*• Reimbursement

• Sales*• Dose Form and Strength*• Patents, Patent Challenges*• Labeling• Chemistry, Synthesis• Data Exclusivity*• Market Exclusivity*• Approvals• API Sources*• Company Data*


Making Formulation


Launch

*Available from Thomson Scientific

KEY BUSINESS NEEDS IN THE GENERIC PROCESS

Business Needs - Functionality

• Access global market, intellectual property and product info*

• Predict key data in advance (e.g. competitiveness, generic launch date)*

• Flexible, fast searching across multiple, exacting criteria*

• Identify early, viable source of API supply and backup sources*

• Spot in- and out-licensing capabilities*

• Identify potential partner companies with multiple, exacting criteria*

• Keep a watchful eye on potential acquisition targets, track competitors*


Making Formulation


Launch

*Available from Thomson Scientific

HORIZONS GLOBAL: A GENERIC INDUSTRY STANDARD• First launched in December 2002

– Version 3.5 released December 2006– Version 4.0 targeted for summer 2007

• Used by at least 3 of the top 5 companies in every generic market– 100+ companies– 2,500+ users

• Used by companies to strategically target products for development, find partners, and attract customers

• Designed to meet key generic business needs:– Target products and companies– Evaluate products and companies– Find early API sources – Identify licensing opportunities– Track competitive developments

• Searchable content includes:– 10,000 launched APIs– 18,000 corporate groups and 3,500 API manufacturing

sites– 92 patent countries

• Incorporates unique intelligence and analysis on API development

HORIZONS GLOBAL: A GENERIC INDUSTRY STANDARD (cont)

Please Come and Visit Us at our Booth

James Noh

Sales Manager

Thomson Reuters Asia Pacific

Tel :+82 2 2076 8101

Fax:+82 2 2076 8122

Mobile:+82 18 210 6522

Email: [email protected]

David Harding

Newport Sales Support Specialist

Thomson Reuters

215 Commercial Street

Portland, Maine 04101

USA

+ 1 (207) 871-9700 x27

[email protected]

Critical Success Factors for the Korean Generic and API Industry in a post FTA Environment DAVID...

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