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Radio Frequency Identification (Rfid)In: ScienceRadio Frequency Identification (Rfid)

Running head: RADIO FREQUENCY IDENTIFICATION

Radio Frequency Identification (RFID)

Esther Olayinka Olagbaju

November 27, 2011

Chamberlain College of Nursing

Introduction

Radio frequency identification (RFID) is a generic term that is used to describe a system

that transmits the identity (in the form of a unique serial number) of an object or person

wirelessly, using radio waves. It is in use all around us; from the chips inserted in pets

as an ID tags, to the EZPass through a tollbooth. In short, this technology does not

require contact or line of sight for communication. RFID data can be read through the

human body, clothing, and non-metallic materials (AIM, 2011). As a member of the

committee created by the Government to investigate the potential of implanting an

electronic record (EHR) into every U.S. citizen, this research will look into the benefits of

this business decision to the Government, and then we will analyze the advantages and

disadvantages of RFID being implanted under the human skin, which is then followed up

Search over 100

by the laws governing this action if it can be enforced or voluntary based procedure,

and finally the percentage of people that will be willing to go through this procedure.

Body of Analysis

Radio frequency identification technology is slick and easy to manage and also comes in

three general varieties, namely; passive, active, and semi-passive (also known as

battery-assisted). Passive tags need no internal power source and are only active when

a reader is close by to power them, while semi-passive and active both require a power

source, usually batteries. Different songs of praises can be sung for RFID, but when it

comes to implanting in humans, it raises eyebrows, which are followed by human rights.

However, in 2004, the food and drug administration gave a final approval to Applied

Digital Solutions to sell their VeriChip RFID tags for implantation into patients in

hospitals. One of the advantages listed for this reason is to provide immediate positive

identification of patients in emergencies as these patients may have an allergy or a pre-

existing condition, which will be taken into account immediately. Taking a look at some

of the advantages and disadvantages of RFID tags;

Advantages:

* RFID tags do not require line of sight to be deciphered. They can be read through

plastic, wood, and even the human body

* They are less vulnerable to damage since they will be securely placed in a safe

location under the human skin

* They eliminate doctor and nurse negligence in the aspect of incorrect medication

and/or foods

* Allows for surgeons to have the nurses’ full attention in the operating room as

opposed to being occupied by the administrative tasks of counting and tracking surgical

equipment (Brown, 2011).

Disadvantages:

There have been privacy concerns as hackers may decode and interpret the information

therein; which are all Personal Identifiable Information (PII). Other disadvantages are as

follows:

* It is expensive to implement (cost)

* Adverse tissue reaction

* Migration of the implanted transponder

* Failure of implanted transponder

* Electrical hazards

* Possible incompatibility with magnetic resonance imaging (MRI)

Laws and Ethics:

According to the American Medical Association, it is recommended that physicians

disclose uncertainties about the risks of implants, add extra layers of security to protect

patient privacy and support ongoing research regarding the implantation of RFID

devices in human beings (AMA, 2011). Even though, RFID tags implants have been

approved by the FDA, it does not come without its drawbacks, but as technology

improves, modifications will be made to ensure it safety in human. As much as it is

approved, the performance of this process should be contingent upon the consent of

the host; as this will be an ethical approach.

Conclusion

Concisely, RFID implantation in human being will prove highly beneficial to patient care

as well as safety. As of now, the technology under the human skin is at its intermediate

stage, so there is more work to be done in order to ensure the safety and potential

hazards it may bring.

Recommendation

RFID tags have been sold since the early 1980s by the millions, and have been used for

livestock, pets, and even endangered species. I would personally support chip implants

in patients based on my research, but the following code of ethics must be adhered to:

* The patient(s) must be informed and followed up with a disclosure of medical

uncertainties associated with the device

* Physicians should support research into the safety and effectiveness of RFID devices

implanted in human beings

* Physicians should try to protect patients privacy by storing confidential information

only on RFID devices utilizing informational security similar to that required for medical

records.

References

AIM. (2011). Implementing RFID is a Business Decision, not a Technology Question.

http://www.aimglobal.org/technologies/RFID/resources/articles/implementingRFID.asp

Brown, C. (2011). 5 Advantages of RFID in Healthcare – Part Four.

http://blogs.zebra.com/blog/bid/51143/5-Advantages-of-RFID-in-Healthcare-Part-Four

Sade, R. (2007). AMA: Report of the Council on Ethical and Judicial Affairs.

http://www.ama-assn.org/ama1/pub/upload/mm/code-medical-ethics/240a.pdf.

Words: 849 Pages: 4

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Home Page » Other Topics

Community HealthIn: Other TopicsCommunity Health

We Can But Should We?

Rose Tarchala

NR361: Informatics in Nursing

September 27, 2012

Introduction

Picture this, you come home to find you backyard gate open and your best friend of 10

years – FIDO has escaped! Once inside your home you notice you have a voicemail, the

local animal shelter has found and identified FIDO and he is safe, warm and happy

Search over 100

awaiting your arrival to bring him home. The shelter was able to identify FIDO from the

avid chip you had implanted several years ago in the event something like this might

happen. How many times have you walked out the door of you favorite department

store only to be stopped by the screeching and embarrassing alarm because the store

clerk forgot to remove or desensitize one of their “sensors”. How many of us have apps

on our cell phones that will help us avoid traffic or even locate your errant teenager

when they choose not to answer your calls? I like the family locator app very much,

much to my children’s dismay.

All of the technology that we have become accustom using in daily life can be and is

being used in healthcare today. This technology is called – Radio Frequency

Identification (RFID) and Quick Response Codes (QR) are being developed for many

reasons; patient identification and safety, saving healthcare workers and organizations

time and money and helping patients be more compliant with their healthcare to name

just a few applications of RFID use. In this paper I will discuss some of the benefits of

RFID use in healthcare and the barriers and concerns about using RFID technology in

healthcare.

Arguments for RFID

Benefits

Patient safety. Hospitals are currently facing challenges of improving patient safety and

reducing operational costs, which are composed of human and systemic errors (Wen,

Chao-Hsien, & Zang, 2010). A report from the Institute of Medicine (IOM) estimated that

between 44,000 and 98,000 deaths per year were related to medical errors (Institute Of

Medicine, 1999). RIFD tags worn by hospital staff and patients enable a facility to

pinpoint their location… (Fran Turisco, 2008). At Hospital St. Louis, in Ettelbruck,

Luxembourg, nurses as well as psychiatry and neurology patients suffering from

dementia wear wristbands with RFID technology as a safety measure (Fran Turisco,

2008). The hospital staff can easily locate and identify patients and alerts are sent to

staff and security when a patient attempts to leave the unit.

Couldn’t this technology be useful outside hospital setting? At least once a year I hear

about an elderly resident in nursing home or family member that has wandered off,

some found safe others not so lucky. We use this type of device for Fido, why not mom

and dad? Although the microchip for pets only identifies the missing pet once found, the

technology is available that can pinpoint a person’s location, can also contain personal

health information (PHI) in real time. This can be life saving when emergency healthcare

decisions need to be made.

RIFD technology is also used to locate equipment such as IV pumps, telemetry monitors,

and oximetry monitors; saving clinical staff time they would otherwise use to search out

the equipment. Having this technology also helps prevent theft of equipment. It is

estimated that the theft of equipment and supplies cost hospitals $4000.00 per bed

each year….Thus, tracking medical devices, especially expensive assets, is of utmost

importance (Wen, Chao-Hsien, & Zang, 2010). Again I ask, If we LoJack our cars and Van

Goughs, why not the people that matter most?

Another benefit of RFID technology can help patients be more compliant with their own

healthcare. The company, PositiveID Corps. is working on an implanted microchip called

the glucochip that can monitor diabetic patients’ blood sugars in real time. Eliminating

need for multiple painful finger sticks, daily logs and cost of test strips (Positive ID

Corporation). This technology could give those diabetic patients, especially younger

patients who do not want to be different, more freedom from their diagnosis. So if the

technology is out there, why shouldn’t we use it?

Disadvantages

Privacy and legal issues. When RFID tag is associated with a patient, it can contain any

type of personal information, such as patient name, gender, home address, medical

history, financial history; it can be used to track your location, and spending habits. The

information it can contain is amazing and a little scary in the wrong hands. Such data

should be stored in a secure server in compliance with Heath Insurance Portability and

Accountability Act (HIPAA) (Wen, Chao-Hsien, & Zang, 2010).

Other issues. Electronic medical devices may fail in the presence of the high powered

RFID reader. RFID tag readability is dependent on location, read distance and angle of

rotation. An RFID system can run from $20K to over $1million. (Wen, Chao-Hsien, &

Zang, 2010) Implanted devices have been linked to subcutaneous sarcomas (Lewan,

2007) and migration makes removal more complicated.

RFID technology has been used for many different non human things. Its use on humans

is still in developmental process. I feel a RFID or QR barcode, not implanted, for use in

identifying people during an emergency can be lifesaving-as long as privacy is

preserved, keeping both PHI and patients identity safe from theft. I just don’t know if we

are there yet.

References

Fran Turisco, M. &. (2008, December). Equipped for Efficiency: Improving Nursing Care

Through Technology. Oakland: California HealthCare Foundation.

Institute Of Medicine. (1999). TO ERR IS HUMAN: Buliding a Safer health System. (L. T.

Kohn, J. M. Corrigan, & M. s. Donaldson, Eds.) Retrieved 20 September, 2012, from

Institute Of Medicine: http://WWW.IOM.EDU

Lewan, T. (2007, September 8). Chip Implant Linked To Animal Tumors. Retrieved from

The Washington Post: http://www.washingtonpost.com

Positive ID Corporation. (n.d.). PositiveID: Tools and Technology for a better life.

Retrieved from Positive ID Corporation: http://wwwpositiveidcorp.com

Wen, Y., Chao-Hsien, C., & Zang, L. (2010, 31 January). The Use of RFID in Healthcare:

Benefits and Barriers. Retrieved September 20, 2012, from Pennsylvania States

University: http://WWW.Personal.psu.edu/wxy119/pub/RIFD-TA-2010-Wen-final

Words: 1024 Pages: 5

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Home Page » Business and Management

Singapore Healthcare ReportIn: Business and ManagementSingapore Healthcare Report

Q3 2010

www.businessmonitor.com

siNGapore

pharmaceuticals & healthcare report

INCLUDES 10-YEAR FORECASTS TO 2019

Search over 100

issN 1748-216X

published by Business monitor international ltd.

SINGAPORE

PHARMACEUTICALS &

HEALTHCARE

REPORT Q3 2010

INCLUDING 5-YEAR AND 10-YEAR INDUSTRY FORECASTS BY BMI

Part of BMI’s Industry Report & Forecasts Series

Published by: Business Monitor International

Copy deadline: June 2010

Business Monitor International

Mermaid House,

2 Puddle Dock,

London, EC4V 3DS,

UK

Tel: +44 (0) 20 7248 0468

Fax: +44 (0) 20 7248 0467

Email: [email protected]

Web: http://www.businessmonitor.com

© 2010 Business Monitor International.

All rights reserved.

All information contained in this publication is

copyrighted in the name of Business Monitor

International, and as such no part of this publication

may be reproduced, repackaged, redistributed, resold in

whole or in any part, or used in any form or by any

means graphic, electronic or mechanical, including

photocopying, recording, taping, or by information

storage or retrieval, or by any other means, without the

express written consent of the publisher.

DISCLAIMER

All information contained in this publication has been researched and compiled from

sources believed to be accurate and reliable at the time of

publishing. However, in view of the natural scope for human and/or mechanical error,

either at source or during production, Business Monitor

International accepts no liability whatsoever for any loss or damage resulting from

errors, inaccuracies or omissions affecting any part of the

publication. All information is provided without warranty, and Business Monitor

International makes no representation of warranty of any kind as

to the accuracy or completeness of any information hereto contained.

Singapore Pharmaceuticals & Healthcare Report Q3 2010

© Business Monitor International Ltd

Page 2


CONTENTS

Executive

Summary ...........................................................................................................................

.............. 5

SWOT

Analysis ..............................................................................................................................

................... 6

Singapore Pharmaceuticals And Healthcare Industry

SWOT ................................................................................................................................

6

Singapore Political

SWOT .................................................................................................................................

.................................................... 7

Singapore Economic

SWOT .................................................................................................................................

.................................................. 7

Singapore Business Environment

SWOT .................................................................................................................................

.............................. 8

Pharmaceutical Business Environment

Ratings .......................................................................................... 9

Table: Asia Pacific – Pharmaceutical Business Environment Ratings for

Q310 ................................................................................................... 9

Limits of Potential

Returns ..............................................................................................................................

.................................................... 10

Risks to Realisation of

Returns ..............................................................................................................................

.............................................. 10

Singapore – Market

Summary .......................................................................................................................

12

Regulatory

Regime................................................................................................................................

.................................................................... 14

Intellectual Property

Issues .................................................................................................................................

................................................ 14

Trade

Agreements .......................................................................................................................

......................................................................... 15

Pricing and

Reimbursement .................................................................................................................

................................................................ 16

Industry Trends and

Developments ............................................................................................................. 17

Epidemiology .....................................................................................................................

.................................................................................. 17

Non-Communicable

Disease ..............................................................................................................................

.................................................. 18

Communicable

Disease...............................................................................................................................

......................................................... 18

Healthcare

Sector ................................................................................................................................

................................................................ 19

Healthcare

Financing ...........................................................................................................................

............................................................... 21

Healthcare Insurance

Developments ....................................................................................................................

............................................... 22

Healthcare Company

Developments ....................................................................................................................

................................................ 22

Pharmaceutical Supply

Chain ..................................................................................................................................

........................................... 23

Research and

Development......................................................................................................................

............................................................ 26

Bioscience

Sector ................................................................................................................................

................................................................. 28

Recent Research and Development

Activities ............................................................................................................................

.......................... 29

Clinical

Trials ..................................................................................................................................

.................................................................... 29

Recent Developments in Clinical Trials

Industry ..............................................................................................................................

................... 31

Medical

Devices...............................................................................................................................

.................................................................... 32

Table: Classification Of Medical Devices In

Singapore ...........................................................................................................................

........... 32

Recent Developments in the Medical Devices

Industry ..............................................................................................................................

.......... 34

Industry Forecast

Scenario ...........................................................................................................................

35

Overall Market

Forecast..............................................................................................................................

........................................................ 35

Key Growth Factors –

Industry...............................................................................................................................

............................................. 36

Key Growth Factors –

Macroeconomic ..................................................................................................................

............................................. 37

Table: Singapore – Economic

Activity ...............................................................................................................................

.................................. 39

Prescription Drug Market

Forecast..............................................................................................................................

....................................... 40

Patented Drug Market

Forecast .............................................................................................................................

............................................. 42

Generic Drug Market

Forecast..............................................................................................................................

.............................................. 44

OTC Medicine Market

Forecast .............................................................................................................................

............................................. 45

Medical Device Market

Forecast .............................................................................................................................

............................................ 47

Pharmaceutical Trade

Forecast .............................................................................................................................

............................................. 48

Other Healthcare Data

Forecasts............................................................................................................................

............................................ 50


Page 3


Key Risks to BMI’s Forecast

Scenario .............................................................................................................................

.................................... 51

Competitive

Landscape ..........................................................................................................................

....... 52

Pharmaceutical

Industry...............................................................................................................................

....................................................... 52

Domestic Pharmaceutical

Sector ................................................................................................................................

......................................... 53

Foreign

Industry ..............................................................................................................................

.................................................................... 54

Foreign Company

Activities.............................................................................................................................

.................................................... 55

Traditional Chinese

Medicine .............................................................................................................................

................................................. 56

Company

Profiles ...............................................................................................................................

............ 57

Indigenous

Manufacturers ....................................................................................................................

.................................................................... 57

Haw

Par .....................................................................................................................................

......................................................................... 57

SciGen ................................................................................................................................

................................................................................. 59

MerLion

Pharmaceuticals .................................................................................................................

.................................................................. 61

Veredus

Laboratories .......................................................................................................................

................................................................... 63

Leading

Multinationals ....................................................................................................................

......................................................................... 65

Pfizer ..................................................................................................................................

................................................................................. 65

Novartis .............................................................................................................................

.................................................................................. 67

GlaxoSmithKline .................................................................................................................

................................................................................. 69

Sanofi-

Aventis ...............................................................................................................................

....................................................................... 72

Merck &

Co ......................................................................................................................................

................................................................... 74

Baxter ................................................................................................................................

.................................................................................. 76

Country Snapshot: Singapore Demographic

Data ..................................................................................... 77

Section 1:

Population...........................................................................................................................

................................................................ 77

Table: Demographic Indicators, 2005-

2030 ...................................................................................................................................

..................... 77

Table: Rural/Urban Breakdown, 2000-

2030 ...................................................................................................................................

.................... 77

Section 2: Education and

Healthcare .........................................................................................................................

......................................... 78

Table: Education, 2000-

2004 ...................................................................................................................................

........................................... 78

Table: Vital Statistics, 2005-

2030 ...................................................................................................................................

..................................... 78

Section 3: Labour Market and Spending

Power..................................................................................................................................

................. 78

Table: Employment Indicators, 2001-

2006 ...................................................................................................................................

....................... 78

Table: Consumer Expenditure, 2000-2012

(US$) ..................................................................................................................................

.............. 79

BMI

Methodology ......................................................................................................................

..................... 80

How We Generate Our Pharmaceutical Industry

Forecasts ...........................................................................................................................

.......... 80

Pharmaceutical Business Environment Ratings

Methodology ......................................................................................................................

............ 81

Ratings

Overview ............................................................................................................................

..................................................................... 81

Table: Pharmaceutical Business Environment

Indicators ...........................................................................................................................

........ 82

Weighting............................................................................................................................

................................................................................. 83

Table: Weighting Of

Components .......................................................................................................................

................................................. 83

Sources ..............................................................................................................................

....................................................................................... 83

Forecast

Tables ................................................................................................................................

.............. 84


Page 4


Executive Summary

In BMI’s Business Environment Ratings (BER) table for Q310, Singapore is ranked fifth of

the 16

markets assessed in the Asia Pacific region., up from the previous quarter and

improving further upon its

rise from eighth in Q409 to seventh in Q110. Globally, Singapore ranks 22nd of the 82

pharmaceutical

markets surveyed by BMI. While Singapore’s consistent and transparent medicine

regulations are

attractive to multinational drugmakers, its fundamental drawback is a small and mature

pharmaceutical

market that is growing slowly. Over the medium term, we expect Singapore to fall down

the ratings, as

emerging countries such as Vietnam and Indonesia become more alluring to foreign

firms selling patented

products.

Singapore’s 2009 total GDP showed a decline of 2%, compared with growth of 1.4% in

2008. The

pharmaceuticals sector contributed about 20% of total manufacturing output, with

manufacturing

accounting for about 25% of GDP. The positive GDP forecast for 2010 reflects that

Singapore, due to its

openness, will benefit from the upturn in trade in the region.

Singapore has increasingly turned to pharmaceuticals as a key trade commodity, given

the waning

importance of technological exports; however, the economy still remains dependent on

electronic good

exports. The drawback of pharmaceutical exports is that pharmaceutical manufacturing

output fluctuates

on a monthly basis, as factories often lie dormant for weeks to be cleaned between the

manufacture of

batches of different medicines.

Singapore’s per-capita expenditure on pharmaceuticals is above average for the region.

At about US$114

(or 0.34% of GDP) in 2009; however, the figure compares unfavourably with its Western

European

counterparts, indicating some potential for further growth. Per-capita spending is

forecast to rise to

US$126 in 2010, though it will drop to 0.33% of GDP.

From 1 March 2010 Singapore residents have been able to use Medisave to pay for their

hospitalisation

overseas under certain conditions. Prior to this they could only do so for emergency

hospitalisation. The

Ministry of Health has stated that it still has concerns about quality of care and potential

abuses. The

scheme started with two providers: Health Management International (HMI) and

Parkway Holdings.

In January 2010, the Ministry of Health announced that the current healthcare subsidy

for permanent

residents will be reduced by 10 percentage points (pp). This move will increase the

differential in

healthcare subsidies enjoyed by citizens and permanent residents to 20pp by 2012.

Citizens enjoy heavy

subsidies in Class B2 and C wards and permanent residents enjoy significant subsidy,

but foreigners

receive none. Currently, citizens are subsidised 80% of the cost in a class C ward while

permanent

residents are subsidised by 70%. Under the new plans, a permanent resident’s subsidy

in a Class C ward

will drop to 60%.


Page 5


SWOT Analysis

Singapore Pharmaceuticals And Healthcare Industry SWOT

Favourable tax climate for foreign investment.

W orld-class capabilities across the entire value chain, from basic research to support

services.

!

W ell-established research infrastructure backed by strong supporting industries.

!

Strong government support for drug discovery, as illustrated by the new biomedical

research centre Biopolis.

!

Traditional preference for prescription and branded medicines.

!

Local manufacturing sector output comprises predominantly cheap, basic medicines.

!

Small generics segment due to traditional preference for branded products, despite

government encouragement and generic substitution in public hospitals.

!

Problematic access to research and development (R&D) venture finance.

!

Small population size, which limits longer-term market potential.

!

Tendering system reflects negatively on overall pharmaceutical values.

!

Government focused on developing Singapore into a hub for pharmaceuticals,

medical devices, clinical trials and biotechnology, attracting both foreign investment

and patients.

!

Pro-reform government policy adding impetus to domestic market development in

search of foreign investment.

!

ASEAN harmonisation gradually removing trade barriers.

!

Increasing potential of export sector, boosted by multinational presence and the

country’s growing status as a regional R&D and manufacturing base.

!

Better import-export balance, allowing greater re-investment in market development in

medium and long term.

!

Tax breaks offered to drug makers in exchange for increase in local production

capacity.

!

Expansion of the elderly and disabled care programme to boost demand for

treatments of chronic diseases.

!

Recent government proposals to reduce price levels in the country pose a threat to

investment.

!

Patent expirations on leading products threatening overall values.

!

Possible expansion of parallel trade and greater collaboration between the public and

private sectors as cost-containment measures would depress margins.

!

Threats

Highly trained workforce, stable government and economy.

!

Opportunities

Strong intellectual property (IP) protection laws.

!

Weaknesses

!

!

Strengths

Growing regional competition for multinational investment from Taiwan, South Korea

and others, including India and China.


Page 6


Singapore Political SWOT

!

Singapore is not a properly functioning democracy. The ruling People’s Action Party

(PAP) has all but two seats in parliament, and the opposition is restricted from

campaigning through tight control over political debate and frequent use of libel laws.

The government has yet to improve the situation for the less well off in Singapore, and

there is a rising wage gap between the top earners and the lowest paid.

!

Lee is proving himself a capable leader, moving away from the shadow of his father

by repeatedly calling for more openness.

Singapore is leading its regional neighbours in signing free trade agreements.

Increased regional integration is likely to give the island more influence in Asia.

!

There are fears that Singapore’s foreign policy alignment with the US will cause the

city-state to become a target for terror attacks launched by Muslim extremists.

!

Threats

Official promises have been made to eradicate Singapore’s reputation as an

overprotective nanny-state, with efforts to enhance freedom of expression.

!

Opportunities

Singapore enjoys a very stable political system, following the country’s second

change of leadership in 40 years, which saw Lee Hsien Loong – son of the nation’s

founding father Lee Kuan Yew – take over as prime minister in 2004.

!

Weaknesses

!

!

Strengths

The last election showed that segments of the electorate are becoming disenchanted

with the PAP and its repression of opposition voices.

Singapore Economic SWOT

!

The trade-dependent economy remains exposed to global trends in demand for

electronic goods, which account for around half of Singapore’s non-oil exports.

Singapore faces a number of long-term economic problems. Competition from lowcost

neighbouring countries is on the increase and its population is ageing rapidly.

!

In the face of regional competition for both exports and investment, the government is

encouraging economic diversification to boost competitiveness. New areas being

promoted include biomedical sciences, medical and financial services, and tourism.

There may be increased prospects for Singapore to expand its investments in the

Iskandar Malaysia project (a government-directed economic corridor initiative) in

Johor, following a cordial visit by Malaysian Prime Minister Najib Razak in May 2009.

!

There is significant state involvement in the private sector, with the government

refusing to disclose the assets of the Government of Singapore Investment Corp

(GIC). The GIC is one of the world’s largest institutional investors, managing foreign

exchange reserves and government funds worth more than US$100bn. Without

increased openness, investor confidence could be damaged and domestic growth

hindered.

!

Threats

Singapore’s current account surplus remains about 15% of GDP and its external

finances are in good shape. This is reflected by the world’s credit-rating agencies,

which continue to award Singapore top marks for external strength.

!

Opportunities

Singapore’s monetary policymakers have gained credibility by guiding the exchange

rate to offset inflationary pressures while ensuring stable growth.

!

Weaknesses

!

!

Strengths

Singapore’s exporters will need constantly to adapt to competition from low-wage

economies such as China and India.


Page 7


Singapore Business Environment SWOT

!

Singapore is the least corrupt country in Asia, according to Transparency

International, a Berlin-based anti-corruption watchdog.

!

Strikes and labour protests will remain rare, if not absent, in Singapore for the

foreseeable future due to the government’s autocratic insistence on a businessfriendly

environment. Policymakers will continue to use heavy-handed tactics to

ensure the unions stay pliant.

Weaknesses

!

Political and economic stability has come at a price. The Singapore government

censors the media and limits the distribution of foreign publications. The judiciary’s

record of siding with prominent politicians calls into question the true extent of its

neutrality in any contract dispute involving a politically sensitive issue.

Opportunities

!

Due to the lack of progress at the World Trade Organisation (WTO), the Singaporean

government has committed the country to sign 19 bilateral free-trade agreements.

Singapore has already signed agreements with several countries, including the US,

Japan, India and Australia.

!

Singapore has one of the best business operating environments in Asia. This is

reflected by Singapore’s second place in the Index of Economic Freedom league table

compiled by the Heritage Foundation and the Wall Street Journal.

!

Singapore is potentially at risk of a terrorist attack. The city-state has previously been

identified as a target by Islamist militants from neighbouring Indonesia and elsewhere.

Singapore’s adjacency to the Malacca Straits means that its trade is vulnerable to

international piracy.

Strengths

Threats


Page 8


Pharmaceutical Business Environment Ratings

Table: Asia Pacific – Pharmaceutical Business Environment Ratings for Q310

Risks to realisation of

returns

Limits of potential returns

Pharmaceutical

market

Country

structure

Limits

Market

risks

Country

risk

Risks

Pharma

rating

Regional

ranking

South Korea

67

60

65

70

69

70

66.9

1

Australia

57

73

61

72

82

76

66.9

2

Japan

60

70

63

73

72

73

66.7

3

China

67

43

61

67

55

62

61.3

4

Singapore

37

67

44

80

88

83

59.8

5

Taiwan

50

53

51

70

64

68

57.6

6

Hong Kong

40

70

48

67

78

71

57.0

7

India

60

40

55

60

53

57

55.9

8

Malaysia

40

57

44

70

68

69

54.2

9

Thailand

60

43

56

37

61

47

52.1

10

Philippines

50

57

52

43

48

45

49.1

11

Indonesia

53

47

52

40

41

40

47.2

12

Vietnam

47

40

45

40

49

43

44.4

13

Bangladesh

43

30

40

43

35

40

40.0

14

Pakistan

27

47

32

33

44

37

34.0

15

Cambodia

33

20

30

30

37

33

31.2

16

Regional

Average

49

51

50

56

59

57

52.8

Scores out of 100, with 100 highest. Source: BMI

Having moved up from eighth in Q409 to seventh in Q110, Singapore has risen to fifth

in BMI’s Asia

Pacific Pharmaceutical Business Ratings for Q310. Although its composite score has

risen from 55.3 to

59.8. While Singapore’s consistent and transparent medicine regulations are attractive

to multinational

drugmakers, its fundamental drawback is a small and mature pharmaceutical market

that is growing

slowly. Strict price controls are also a deterrent. Over the medium term, we expect

Singapore to fall down

the ratings, as emerging countries such as Vietnam and Indonesia become more

alluring to foreign firms

selling patented products. Globally, Singapore ranks 22nd of the 82 pharmaceutical

markets surveyed by

BMI. The key components of Singapore’s score are:


Page 9


Limits of Potential Returns

Pharmaceutical market and country

Business Environment Ratings By

Sub-Sector Score

structure scores are weighted and

combined to form limits to potential

Q310

returns. Singapore’s score of 44 falls well

Pharmaceutical

Market

100

below the average for the 16 markets

surveyed by BMI, which comes in at 50

for the quarter.

Country Risk

0

Country Structure

Pharmaceutical Market

Singapore’s US$560mn pharmaceutical

market is small in regional terms because

Market Risk

of its city-sized population. However,

Singapore Scores

due to its well-developed economy, per

capita spending is high, making it a draw

Regional Scores

Scores out of 100. Source: BMI

to almost all the multinationals.

Unfortunately, growth is on the low side, meaning returns will never be great, although

the country has

successfully transformed itself into a biomedical production hub.

Country Structure

Being a city-state, there is no rural population, making access to pharmaceuticals easy

for everyone.

Population growth is slightly above average in global terms, but well below regional

standards. The

country is looking to rectify this through policies that enable families to grow and

schemes that help

families to better balance work with home life.

Risks to Realisation of Returns

Market and country risks are weighted and combined to form the score for risks to

potential returns.

Singapore’s score of 83 is considerably above the regional average, which stands at 57

for the quarter.

Market Risks

In terms of IP protection, the country is a model for the Asia Pacific region. Counterfeits

are very rare and

transgressions are punished severely. Innovative drugs are introduced swiftly, implying

that the approval

process is smooth and supported by the government.

Country Risk

Singapore is seen by some as an illiberal democracy – a governing system in which

citizens elect their

political leaders but freedom is curtailed by the government. Indeed, the same political

party – the PAP –

has ruled since sovereignty was gained in 1965. However, this has resulted in a regimen

that can be


Page 10


trusted to behave in a predictable way. Ostensibly a social democracy, the needs of the

people – such as

healthcare provision – are high on the government’s agenda. However, Singapore’s

current economic

indicators are causing some concern to investors, with full recovery not expected until

2012.


Page 11


Singapore – Market Summary

Despite its small population, Singapore’s

per-capita expenditure on

Pharmaceutical Market By Sub-Sector

(US$bn)

pharmaceuticals is above-average for the

2009

Asia Pacific region. At about US$114 (or

Generic

drugs,

0.058

0.34% of GDP) in 2009, the country’s

per-capita spending is behind only Japan,

Australia, Taiwan, Hong Kong and South

Korea, and dwarfs that of its immediate

OTC

medicines,

0.123

neighbours, Malaysia and Indonesia.

However, the figure compares

unfavourably with its Western European

Patented

products,

0.379

counterparts, indicating some potential

for further growth. Per-capita spending is

forecast to rise to US$126 in 2010, but

drop to 0.33% of GDP. Singapore’s Q4

f = forecast. Source:IMS Health Asia, United Nations Comtrade

Database, DESA/UNSD, BMI

2009 GDP rose by 4% year-on-year (y-o-y), bringing the total-year figure to a decline of

2%, as

compared with growth of 1.4% in 2008. The pharmaceutical sector contributed about

20% of total

manufacturing output, with manufacturing accounting for about 25% of GDP. The

positive GDP forecast

for 2010 reflects that Singapore, due to its openness, will benefit from the upturn in

trade in the region.

Prescription medicines account for some 78% of expenditure, reflecting the traditional

popularity of the

sector, as well as that of widely accessible healthcare services. While significantly

smaller than the

prescription segment, the OTC sector in Singapore will remain one of the most

developed in the region,

although its annual growth will be limited. Generic drugs will gradually begin to account

for an

increasing share of the market, despite the traditional preference for patented products,

which has largely

been fuelled by the country’s high per-capita income.

The indigenous industry is small and comprises of about 20 producers. However, local

firms are

increasingly looking to move away from low-cost generics and into developing

innovative treatments. To

this end, they are interested in licensing and similar collaborative deals with

international firms with a

more established global presence.

In addition, the government is seeking to encourage investment from foreign

companies, especially in the

field of biotechnology. While the country is losing out to India and China in terms of

large-scale

manufacturing, a number of international players are investing in local R&D initiatives

and specialist

production, such as state-of-the-art biotech fermenters. In the meantime, given that

most major


Page 12


pharmaceutical companies have a presence in Singapore – some through direct

production facilities –

imports comprise some 80% of medicines used in the healthcare sector.


Page 13


Regulatory Regime

Singapore is a wealthy, advanced market, and regulation is largely in line with

international norms. As a

result, most of the barriers to market access found elsewhere in the region are not

present, with drug

registration processes also considered smooth and without delays. However, some

concern exists in terms

of regulations covering intellectual property (IP) protection and parallel trade, pending

the integration of

the present healthcare and medicines acts.

The main regulatory authority in Singapore is the Centre for Drug Administration (CDA),

under the

auspices of the Ministry of Health, which monitors the quality and safety of all

pharmaceutical production

and imports. The Ministry of Health purchases all pharmaceutical drugs for public

hospitals through the

CDA, and local companies act as the main distribution channels, either on their own

behalf or on the

behalf of foreign companies.

In June 2005, Singapore’s Health Sciences Authority (HSA) released new guidelines on

the preparation

of a site master file (SMF) for pharmaceutical good distribution practice (GDP)

certification. While the

application for GDP certification is currently a voluntary procedure in Singapore, those

companies that do

receive certification are required to update their SMF regularly, once any changes are

applied to existing

distribution practices.

According to the new directives, an SMF should contain information describing product

storage, delivery

procedures and any other distribution operations carried out by the distribution site.

More specifically, an

SMF should include information on the following: (1) general information, (2) personnel,

(3) premises

and facilities, (4) stock handling and stock control, (5) documentation, (6) product

complaints and recalls,

(7) self-inspections, and (8) contract activities. On the whole, the SMF should contain

approximately 2530 pages of information, which must be submitted to the HSA for

approval.

Intellectual Property Issues

Singapore’s current patent law was introduced in 1995, the same year that the country

became a signatory

of the Patent Co-operation Treaty (PCT). Legislation is largely in line with international

standards, with

the term of a Singaporean patent some 20 years from the date of filing, and the

definition of subject

matter under protection essentially the same as that of the European Patent

Convention. As such,

Singaporean legislation is looked upon favourably by the international drug industry.

Patents and data exclusivity are further regulated by the Singapore-US FTA, signed in

2003. The FTA

provides for patent term extensions in cases of marketing approval delays for

pharmaceuticals, as well as

for data exclusivity for marketing approval submissions for medicinal products.

However, while patent

term extensions and parallel imports are regulated by the Patents Act, data-exclusivity

guidelines are

stipulated within the Medicines Act. The latter works on the basis of a medicinal

products definition,


Page 14


which is broader than the definition covering pharmaceutical products, as it is contained

within the

former. The pending integration of the pharmaceutical and medicine guidelines under a

single regulatory

document will serve to clear confusion and facilitate market access and manoeuvring.

In June 2004, the government passed a wave of IP bills, further tightening domestic

regulations. The new

legislation covers a range of areas, with pharmaceuticals a major focus, and meets the

obligations laid out

in the US-Singapore FTA. Focusing on pharmaceuticals, the Medicines (Amendment) Bill

was tabled in

order to fulfil the country’s commitment not to grant marketing approval to a third party

before the expiry

of the patent term of a pharmaceutical product, unless it is with the consent of the

patent owner. The

Patents (Amendment) Bill is aimed at boosting pharmaceutical and biomedical industry

growth. It

provides, for instance, for the extension of patent terms in order to compensate for

delays in obtaining a

patent grant or marketing approval.

During Q307, Singapore accepted the December 2005 amendment to the WTO’s Trade-

Related Aspects

of Intellectual Property Rights (TRIPS) agreement, which allows compulsory licensing to

enable the

export of cheaper versions of patented medicines to address public health problems. It

is BMI’s view that

Singapore is extremely unlikely to exercise this right, given the close ties it maintains

with the

multinationals.

Trade Agreements

In September 2008, China and Singapore successfully concluded the China-Singapore

Free Trade

Agreement (CSFTA). CSFTA marks the first comprehensive bilateral FTA concluded by

China with an

Asian country and comes after almost two years of planning. The Ministry of Trade and

Industry (MTI)

also announced that negotiations have been concluded for a memorandum of

understanding (MoU) on

labour cooperation.

China and Singapore have been enjoying healthy bilateral relations since diplomatic ties

were established

in 1990. Economic cooperation has resulted in trade between the two countries

reaching a new peak of

SGD91.6bn in 2007. China has since become Singapore’s third largest trading partner,

while Singapore is

China’s eighth largest. Recent co-operative efforts include the setting up of Tianjin eco-

city following the

success of Suzhou Industrial Park. The CSFTA covers areas ranging from trade in goods

to technical

barriers and economic co-operation.

Despite this positive development, there are concerns that the recent trend of individual

countries

engaging in bilateral FTAs may lead to impediments to business activities. This is

because the multitude

of overlapping FTAs makes it more complicated for firms to expand across the region

and makes

economic integration in regions such as the ASEAN increasingly difficult.


Page 15


In December 2008, Singapore signed an FTA with the Gulf Co-operation Council (GCC),

which became

the first-ever bloc-wide agreement for the GCC member states (Bahrain, United Arab

Emirates (UAE),

Qatar, Kuwait, Oman and Saudi Arabia). While the key desire of the two sides is to

enhance air services,

pharmaceuticals from Singapore are also likely to find a receptive audience across the

GCC. Bilateral

trade between the two partners topped a record US$42.4bn in 2007, some 127% up on

2002 levels. The

FTA means that 99% of Singapore’s and GCC’s goods will be tariff-free.

Pricing and Reimbursement

Pricing and reimbursement systems in Singapore are transparent and straightforward.

Drug pricing is left

to market forces in the private sector, while, in the public sector, drugs are divided into

two categories:

‘standard’ and ‘non-standard’ drugs. Only the former are subsidised by the government,

as the latter are

predominantly used in the private sector. The obligation of public hospitals to use

generics where

available restricts the market for original products to drugs without a generic equivalent

and the private

sector, while tendering reflects negatively on pharmaceutical values.

Although the pricing and reimbursement systems are generally looked upon favourably

by the

international drug industry, recent proposals for changes in the regimes have caused

some concern. The

government has revealed its intention to reduce price levels in the country in a bid to

contain rising levels

of public expenditure on healthcare and pharmaceuticals, which has worsened with the

progress of

population ageing and higher patient demands. Methods currently under consideration

include the

expansion of parallel trade, and greater collaboration between the public and private

sectors.

The above measures, especially the former, are likely to put considerable pressure on

multinational profit

margins, as it facilitates the entry of a large number of cheap medicines on to the

market. However, as the

changes have been under discussion for some time, multinational pressure and the

government’s desire to

attract foreign investment may have contributed to slower-than-expected progress in

this area. Given that

this situation is unlikely to change in the short term, it can be assumed that such

alterations will remain at

the proposal stage, for the time being.


Page 16


Industry Trends and Developments

Epidemiology

According to BMI’s Burden of Disease

Database (BoDD), Singapore will be the

Burden Of Disease Projection

2005-2030

healthiest country in Asia Pacific for at

least the next 20 years. This is due to

500,000

increasing wealth in the city state, rapid

400,000

uptake of innovative pharmaceuticals, a

300,000

relatively homogenous population and a

200,000

modern healthcare system. While most

100,000

caused by disease and numbers of early

deaths, they will still have a larger

2030f

2025f

2020f

2015f

2010f

reductions in the amount of disability

0

2005

other countries in the region will also see

DALYs lost to non-communicable diseases

DALYs lost to communicable diseases

disease burden compared to Singapore

through to 2030. The fully country-

f = forecast. DALYs = disability-adjusted life years. Source: BMI's

Burden of Disease Database (BoDD).

comparative online tool reveals that 98.7

disability-adjusted life years (DALYs) per thousand people were lost to all disease and

injuries in

Singapore during 2008. This figure – which equates to the burden of disease – is the

lowest in the region,

followed by the developed countries of Japan (101.5) and Australia (103.7).

Amid protests that civil liberties are being eroded, Singapore has introduced a National

Registry of

Diseases, with cancer being the first condition to be tracked. Despite the country having

a similar

statistical tool for over 40 years, the new National Registry is different in that it is

mandatory for

healthcare institutions – both public and private – to contribute. While BMI is a strong

supporter of

patient rights, we believe that disease registries are positive, as more effective

interventions can be swiftly

mobilised. This will eventually result in reduced costs, although security must be of the

highest order.

The Chronic Disease Management Programme (CDMP) was established in January 2007

and initially

covered diabetes, high blood pressure, elevated cholesterol levels and stroke. During

Q307, the CDMP

was expanded to include mental illness. The body aims to reduce the deadly burden of

these conditions.

While obesity is not a major problem, the abuse of diet pills is an issue. According to the

International

Narcotics Board Report, Singapore ranks fifth on a list of countries with the highest

consumption of

slimming agents – after Brazil, Argentina, South Korea and the US.


Page 17


Non-Communicable Disease

A significant number of residents are facing an increased risk of cardiovascular disease

(CVD), with

around 50% of all patients diagnosed or viewed as being at risk of atherosclerosis failing

to have their

cholesterol levels tested in 2007. The survey, conducted by AstraZeneca in association

with the

Singapore Heart Foundation (SHF) among 400 Singaporeans, indicates a considerable

unmet need for

diagnostics and treatment. CVD is presently the leading cause of death among women.

AstraZeneca

recently launched an education programme titled ACT Now! (Achieve Cholesterol

Targets Now!)

throughout clinics in Singapore.

In October 2008, a government official revealed that the rates of breast cancer in

Singapore increased by

around 25% over the prior 10-year period. The official noted that there are

approximately 1,300 cases of

the disease in the city-state each year. Meanwhile, Singapore’s Agency for Science,

Technology and

Research has formed an alliance with New Zealand’s Health Research Council to launch

a joint research

fund worth SGD3.5mn (US$2.4mn) to investigate both cancer and heart disease,

indicating both the

urgency for a comprehensive programme in this area, as well as a considerable

potential for drugmakers.

The March 2009 report from the Singapore Cancer Registry (2002-2006) revealed that

ovarian cancer is

the fourth most common cancer among Singaporean women. The report also declares

that breast cancer

occupies the top position and has left cancer of the uterus and cervix behind.

Another recent survey found that 75% of the men surveyed in Singapore had

experienced at least one of

the symptoms of benign prostate hyperplasia (BPH). However, less than 45% visited

their doctors, mostly

because they did not wish to disrupt their daily routine, or because they did not feel

that the symptoms

were serious. The findings, published in July 2008 by the Singapore Urological

Association (SUA),

formed part of the association’s efforts to increase awareness of prostate diseases.

After colorectal and

lung, prostate cancer is the leading cause of male cancer morbidity in Singapore,

especially in the older

age groups.

Diabetes is also becoming a major issue in Singapore, with around 1.6% of the

population classed as

being obese. Diabetes is through to be responsible for one in every 12 deaths due to

heart diseases, and

one in 17 due to stroke. By 2030, the WHO forecasts that the prevalence of diabetes in

Singapore will rise

from 8% to over 17%.

Communicable Disease

On a positive note, according to a December 2008 edition of Channel News Asia, a

recent study on

paediatric vaccination revealed that, in Singapore, half of the mothers surveyed had

their children (aged

six months or younger) vaccinated against pneumococcal disease. This was attributed

to a higher

awareness among the people about the disease. In general, Singapore runs a

comprehensive inoculation


Page 18


programme for children, with parents facing financial penalties for the failure to comply.

According to the

WHO statistics, in 2007 Singapore had vaccinated upwards of 95% of its population for

most conditions,

including polio and hepatitis B.

In October 2009, according to Straits Times, child specialists in Singapore asked parents

to immunise

their babies with the new MMRV vaccine to protect them against measles, mumps,

german measles

(rubella) and chicken pox (varicella). Members of the Singapore Paediatric Society (SPS)

are also

planning to hold discussions with the Health Ministry over the inclusion of the MMRV

vaccine in the

National Immunisation Programme. Associate Professor Anne Goh, VP of SPS, stated

that nearly 27,200

patients were infected with chicken pox in 2008, which prompted the latest initiative.

Healthcare Sector

Singapore boasts a world-class healthcare system, which comprises both public and

private elements.

Around 80% of primary healthcare needs are met in private GP facilities. In 2007, US

Commercial

Services reported that Singapore had 5,200 doctors, of which 42% were specialists.

Around half of all

doctors work as private practitioners. In January 2010, the Ministry of Health announced

that the current

healthcare subsidy for permanent residents will be reduced by 10 percentage points

(pp). This move will

increase the differential in healthcare subsidies enjoyed by citizens and permanent

residents to 20pp by

2012. Citizens enjoy heavy subsidies in Class B2 and C wards, permanent residents

enjoy significant

subsidy while foreigners receive none. Currently, citizens are subsidised 80% of the cost

in a class C ward

while permanent residents are subsidised by 70%. Under the new plans, a permanent

resident’s subsidy in

a Class C ward will drop to 60%. The change will be implemented in stages as per the

table below:

Private hospitals and clinics account for around 70% of pharmaceutical market sales,

with such sales split

fairly evenly between private institutions, on the one hand, and doctors and clinics on

the other. Some 16

government hospitals, which purchase medicines through tenders, account for around

only 5% of the

market. Pharmacies and drugstores account for the vast majority of the remainder.

Supermarkets and

retail sales represent a very small percentage of sales, although any increases in the

OTC market size will

be positively reflected in such outlets.

Singapore is taking further steps to cater to the medical demands of its ageing

population and to ensure

that terminal patients die with dignity, according to the Ministry of Health. In line with

this, the ministry

is planning to increase the number of hospice beds by about 20% over the next five to

seven years. The

ministry added that resources and spending will have to increase as the population

ages, and guidelines

will be established for end-of-life care. In fact, in May 2009, the Ministry of Health

announced that it will

provide more land for the construction of new long-term healthcare services, including

hospices and

nursing homes, expanding the capacity of the latter from 9,200 to 14,000 beds over the

next ten years. At

the same time, authorities are aiming to recruit 4,500 extra staff to 2011.


Page 19


Singapore’s highly advanced healthcare system is committed to patient safety.

Singapore introduced a

project to document the prevalence of medical errors in 2003. Early results from the

scheme found that as

many as 1,000 deaths occurred annually because of inappropriate use of

pharmaceuticals and medical

devices. Accordingly, the government started making electronic medical records (EMRs)

compulsory,

like some US states and certain countries in Western Europe. Nine polyclinics affiliated

with the National

Healthcare Group (NHG) started to use the scheme in October 2009. The roll-out of the

electronic system

to all 18 NHG polyclinics is slated for the remainder of 2010. The creation of the new

electronic records

system is supported by the investment of around SGD200mn (US$139mn).

More recently, in late 2009, the DesignSingapore Council began looking into ways to

improve patient

experience during hospital stays, through innovative designs aiming to increase safety

and service

efficiency. The panel is planning to initiate a project with healthcare players and

designers in 2010. The

government is also aiming to improve discharge practices for elderly patients, in a bid

to provide better

transport to their homes following hospital stays as well as more integrated care after

they leave the

hospital. Overall, the Minister of Health is aiming to establish a ‘patient-centric’

approach, as opposed to

the traditionally ‘institution-centric’ one.

In the meantime, some 75% of patients surveyed in the Patient Satisfaction Survey that

is regularly

commissioned by the Ministry of Health expressed their ‘good’ or ‘excellent’ satisfaction

with public

hospitals and polyclinics. The survey was carried out in the last three months of 2008,

polling

approximately 9,400 patients. However, in relation to the previous survey – carried out

in 2007 – the

satisfaction rating was two percentage points lower, although the Ministry suggested

that the current

economic crisis is largely responsible for the result. In fact, the findings of the Patient

Satisfaction Survey

were mirrored by the national Customer Satisfaction Index of Singapore, which was

published in April

2009 by the Singapore Management University. Its results indicated a fall in overall

satisfaction scores in

most services sectors, including healthcare and financing.

Despite enjoying one of the best healthcare systems in the world, affluent Singaporeans

are the least

confident in Asia over maintaining their physical and mental condition. The 2009 AXA

Life Outlook

Index, published in July 2009, surveyed nearly 3,000 people aged 25-50 on high

incomes in eight Asian

countries. It found that Singaporeans have a declining conviction that their health will

hold up over the

next 12 months, the next five years and upon retirement. AXA is global insurance

company

headquartered in France. The head of branding and communication at AXA Life

Insurance Singapore

attributed this negative outlook to the fact that a quarter of the city-state’s population is

not covered by a

hospitalisation and surgical policy, which is one of the basic protections plans. The

majority of

respondents also rely on their employer for medical coverage. This is a concern because

if they become

unemployed, they lose their health insurance policy.


Page 20


Healthcare Financing

High-quality healthcare services are available to all Singaporeans, regardless of income

level. To help

citizens ‘co-pay’ for services, there are four schemes: Medisave, Medishield, Eldershield

and Medifund.

Introduced in 1984, Medisave allows Singaporeans to put aside part of their income (6-

8% of their

monthly salary depending on age) into an account to meet future personal or

immediate family’s

hospitalisation, day surgery or certain outpatient expenses. From 1 March 2010

Singapore residents have

been able to use Medisave to pay for their hospitalisation overseas under certain

conditions. In 2009,

residents of Singapore withdrew a total of SGD660mn (US$428.56mn) from their

Medisave accounts, up

from SGD590mn (US$428.56mn) in 2008. Residents used 52% of the withdrawals to pay

for direct

medical expenses, 18% for parents, 17% for spouses, 12% for children and 1% for

grandparents and

others.

Medishield is a low-cost catastrophic medical insurance scheme. This allows

Singaporeans to effectively

risk-pool the financial risks of major illnesses.

Eldershield is a severe disability insurance scheme that provides basic financial

protection to those who

need long-term care, especially during old age. It provides a monthly cash payout to

help pay out-ofpocket expenses for the care of a severely disabled person. There are

some 750,000 policy holders under

ElderShield. Prior to 2007, the market was controlled by just two local providers – Great

Eastern Life

Assurance and NTUC Income Insurance Cooperative – with Aviva now also present. From

September

2007, the disability insurance scheme has had two tiers – Basic ElderShield and

ElderShield

Supplements, expanding the cover for its members, with the latter intended for people

who are willing to

pay higher premiums in return for more benefits.

Medifund is a medical endowment fund set up by the government to act as the ultimate

safety net for

needy Singaporean patients who cannot afford to pay their medical bills despite heavy

subsidies.

Demonstrating the country’s commitment to healthcare, the 2008 government budget

gave a 19%

increase in funding for the sector. The state committed to injecting SGD630mn

(US$461mn) over the

following five years to upgrade healthcare infrastructure, which would translate into

new hospitals and

more doctors and nurses to care for the country’s ageing population.

However, the 2009 economic downturn resulted in more people seeking to avoid

payment for healthcare

services. In April 2009, it was reported that the number of patients visiting free clinics in

Singapore was

rising. Patients are opting for free medical treatment from voluntary welfare groups as

they find even the

heavily subsidised rates of polyclinics unaffordable. Voluntary welfare organisations –

such as Sunlove

Abode for Intellectually Infirmed (which runs 18 free clinics), Singapore Buddhist Free

Clinic, Realm of


Page 21


Tranquillity and HealthServe – have seen the number of such patients growing in 2009

compared to the

previous year.

In February 2009, local press reported that the government of Singapore is planning to

accelerate the

development of public sector projects – with a focus on healthcare – in a bid to address

economic

slowdown. The authorities announced a SGD20.5bn (US$14.25bn) programme, of which

SGD4bn

(US$2.8bn) is earmarked for the modernisation of older hospitals and clinics, as well as

the construction

of new healthcare institutions, including the Khoo Teck Puat Hospital (due to open in

early 2010) and a

number of specialist centres for the treatment of chronic conditions.

Healthcare Insurance Developments

The Ministry of Health reported that Singapore residents will be allowed to utilise

savings held in the

national medical savings scheme or Medisave for overseas hospitalisation and day

surgeries at two

hospitals in Malaysia, started March 1 2010. The scheme, which will be initiated with

two providers –

Health Management International (HMI) and Parkway Holdings – was designed following

a

consultation with NTUC union leaders, who suggested the scheme to ensure patients

had a wider choice

and were able to take advantage of the lower cost of hospitalisation overseas. Prior to

this scheme

residents could only use their Medicare abroad for emergency hospitalisation. The

Ministry of Health has

stated that it still has concerns about quality of care and potential abuses. India’s Fortis

Healthcare plans

to purchase TPG Capital’s 25% stake in Parkway holdings by June 2010 for about

US$715mn. The

company has raised INR3.8bn (US$8.41bn) through the sale of 22.35mn equity shares

to Singapore staterun investment company GIC.

The development of palliative care in Singapore received a boost in September 2009

with the Health

Ministry’s decision to liberalise the use of Medisave for home palliative care. A

government

representative said that medical costs for patients and their families would be reduced

as a result.

Singapore’s Hospice Care Association was hopeful that the government would extend

the funding for

inpatient hospice care to home hospice care. Overall, some SGD500mn (US$347mn) is

to be spent on

elderly care, with a focus on home care, rehabilitation and palliative services.

Acknowledging the importance of foreign workers to Singapore’s economy, the

Manpower Ministry

announced in September 2007 that from early 2008 employers must provide insurance

for all those on a

work permit or an S pass (i.e. overseas employees). The coverage must be at least

SGD5,000 (US$3,400)

a year for each worker’s inpatient care and day surgery.

Healthcare Company Developments

Singapore-based healthcare group Parkway Holdings is the parent company of Parkway

Group

Healthcare and Parkway Hospitals. It also operates clinics in India, Vietnam and China.

Parkway – has


Page 22


in recent years sought to diversify its business away from its network of hospitals in

Singapore. However,

Parkway’s overseas strategy has not met with total success, and it was recently forced

to give up part of

its 31% stake in Malaysian hospital group Pantai, after being accused of inappropriately

benefiting from

Pantai’s state concessions. In a compromise deal, Parkway has agreed to divest some of

its shares to

Malaysian state investor Khazanah Nasional, reducing its total holding to 18%.

In late 2008, Parkway Holdings announced that it was cutting its total workforce in

Singapore by around

4%, or some 148 jobs. The salaries of its senior and middle managers are also being

reduced, by up to

35%, due to the volatile economy. Nevertheless, Parkway is going ahead with the

construction of its

fourth private hospital in Singapore, while also recently launching a Parkway College

subsidiary, which

runs nursing and healthcare management courses.

Singapore’s largest public health group is SingHealth. Like Parkway, it has overseas

ambitions, and has

conducted talks with officials in Shanghai, China. Similarly, in July 2008, Singapore

Health Services

visited Karachi to seek partnerships within the healthcare sector. The visit aimed to

increase the sharing

of knowledge and expertise between doctors in Pakistan and Singapore Health Services,

which operates

three public hospitals, five specialist centres and eight polyclinics in the city state.

In other news in 2008, Singapore’s Pacific Healthcare opened its second nursing home

in Singapore,

clearly targeting the increased need for convalescent services catering for the rising

number of the elderly.

In the meantime, other Singapore health operators were expanding abroad, with Health

Management

International (HMI) opening a tertiary hospital in Malaysia.

In February 2009, Singapore General Hospital was preparing to implement a new

patient follow-up

system on a wider scale, following a successful pilot trialled in 2008. According to the

hospital’s

authorities, around one in four re-admissions is due to poor compliance with medical

regimens, which led

the hospital to introduce better follow-up care. In partnership with Singapore

Telecommunications and

software company HSA Global, Singapore General Hospital will track patients following

their discharge,

using computerised devices. The hospital would send reminders regarding

appointments and similar

matters.

In June 2009, a new private cancer centre was being constructed in Singapore. The site

will be open 24

hours a day and provide diagnosis and treatment of cancers of breast, lung and

prostate. The investment is

estimated at US$42mn, of which Pacific Healthcare is providing around US$23mn.

Pharmaceutical Supply Chain

Singapore has around 180-200 pharmacies. Leading pharmacy chains are Guardian

(with around 100

outlets), Unity Healthcare (some 46 pharmacies) and government-run pharmacies,

which are located in

hospitals and clinics. In a bid to boost sales during the economic downturn, NTUC

Income Insurance Co-


Page 23


operative began offering a 5% discount on prescription and pharmacy-only medicines

on sale at its Unity

pharmacies chain. The offer was valid for the period between the start of July and the

end of December

2009.

The country is, however, so bereft of pharmacists that it is considering recruiting

professionals from

abroad. There are just 0.3 practising pharmacists per 1,000, which compares

unfavourably to other

developed states (ranging from 1.2 in France to 0.4 in Denmark). To allow this, the

Pharmacist

Registration Act was amended during June 2007 for the first time in 20 years to allow

the conditional and

temporary registration of foreign-trained pharmacists.

Furthermore, in May 2009, the Singapore Pharmacy Council (SPC) introduced a new

professional exam

for foreign-trained pharmacists. The multiple-choice question test is designed to ensure

high ethical

standards of pharmacists operating in Singapore, pertaining to pharmacy practice,

pharmaco-therapy and

pharmaceutical compounding knowledge. Other countries that already run similar

systems for foreigntrained pharmacists include the US, the UK and Canada.

Around the same time, SPC introduced ‘inactive’ status for pharmacies, with those that

are not practicing

any longer having to pay only a portion of the retention fee. Additionally, they will not

need to meet the

full 100% of the current compulsory continuing professional education (CPE)

requirements for the period

of their inactivity. The change has been introduced in a bid to encourage pharmacists to

remain on the

register in Singapore.

During Q108, the National Healthcare Group (NHG) of hospitals in Singapore contracted

local realtime systems provider TCM-RFiD to help pharmacists, nurses and doctors keep

track of pharmaceuticals

through the patient supply chain. The planned solution will have the dual benefit of

improving hospital

workflow management by cutting down on the need for paper files, and of reducing

medical errors.

TCM-RFiD will use the Intelligent Medical Dispensing System (i-MDS) to satisfy the brief.

The system

uses proprietary software and will be initially deployed on 300 Motorola MC50 and MC70

handheld

portable computers at two NHG hospitals. NHG is second largest group of healthcare

institutions in

Singapore, with three public hospitals, five specialist centres and eight polyclinics.

Under i-MDS, the right drug at the correct dosage is given to the patient that requires it.

A nurse, for

example, scans the patient’s wristband – which has a barcode and is radio frequency

identification

(RFID)-enabled – and administers the appropriate medicine from a trolley, which also

tracks which

medicines has been given out. This information is then fed back to a central computer

via a wireless

network. By interrogating centralised electronic medical records (EMRs), the i-MDS

system will look for

changes in prescription regimens, patient allergies or contraindications.


Page 24


In March 2009, the largest healthcare distributor in Singapore, Zuellig Pharma,

inaugurated its new

US$40mn distribution facility, which actually began its operations in September 2008.

The site, located at

Changi North Way, will operate as the company’s local distribution centre and a regional

headquarters.

Zuellig Pharma is focusing on clinical trials and anti-counterfeiting activities, expecting

that seven more

biopharmaceutical plants to be set up in Singapore before the end of 2012.


Page 25


Research and Development

Margins realised from traditional strengths such as trade and information technology

(IT) have been

declining, with Singapore investing heavily in life sciences over the past decade instead,

in order to

develop an economy for the future. The country is adopting the full spectrum approach

and has

established basic research facilities, manufacturing sites, a framework for clinical trials,

a robust

regulatory structure, animal-testing sites and science parks for start-ups.

Since 2001, the Singaporean authorities have invested over SGD500mn (US$293mn)

towards

establishing Biopolis, in the hope that local and foreign scientists will develop hi-tech

medicines in

Singapore. The 2mn ft² centre, which opened early in 2005, has so far attracted over

US$500mn in fresh

investment from the bio-medical sector, with demand for additional space still rising.

Companies have

been eager to take advantage of the shared facilities at Biopolis, where researchers can

access

ultramodern infrastructure facilities, as well as specialised services ranging from DNA-

sequencing to

nuclear magnetic resonance capabilities.

In November 2006, phase 2 of the centre’s development, comprising a further 2,000

research staff and

over 400,000ft² of new space at the site, was completed. The expansion comprises two

new blocks –

Neuros and Immunos – underscoring the centre’s commitment to two therapeutic areas

– neurology and

immunology. Confirmed tenants include the Singapore Immunology Network, a state-

funded initiative,

which is focusing on research into cancer, immunotherapy and vaccines. Also, local

drugmaker Davos

Life Sciences opened a research centre dedicated to tocotrienols, which are the main

ingredient in many

health supplements.

Biopolis also carries significant cost advantages, especially for firms that already use

Singapore as a

leading Asian manufacturing hub. The government hopes that more leading companies

will follow the

lead set by pharmaceutical majors such as GSK and Novartis, as well as the 15 others

that have already

established R&D facilities at the centre. The government is pressing ahead with the

Biopolis

development, despite the current economic conditions.

Apart from funds channelled towards investments, Singapore’s National Science and

Technology Board

(NSTB) has allocated SGD1.5bn to further supplement R&D in the biotechnology sector.

An additional

SGD2bn has also been set aside with the purpose of attracting leading research

organisations to Singapore

to invest in local and foreign biotechnology start-ups. Under the auspices of the

Biomedical Research

Council (BMRC), funding for biomedical research and the life sciences will continue to

increase over the

foreseeable future through existing initiatives such as the Singapore Genomics Program

and Biopolis.

According to KPMG’s Competitive Alternatives Study, Singapore is the most cost-

competitive business

location among nine surveyed industrialised countries, ranking some 22% cheaper than

the benchmark


Page 26


US. The research analysed 27 cost components, including wages, freight, business

taxes, rent and utilities.

Singapore is attractive to stem cell companies because its regulations are less

restrictive than other places,

such as the US. Singapore is able to invest around US$25-30mn per year in stem cell

research.

However, the fact that the Singapore Stock Exchange requires that a company must be

profitable before a

listing can be approved has so far prevented a single listing of a local biotech firm. The

issue has resulted

in the problematic access to R&D financing in the past, despite strong foreign direct

investment (FDI)

inflow into Singapore. Additionally, Singapore has yet to develop a blockbuster drug,

although it is

reported to have a promising pipeline. Additionally, in a positive development in March

2009, the

Singapore Exchange announced their proposal for allowing listing of shares by life

sciences firms on the

Catalyst board of the exchange, even prior to the start of their commercial operations,

although such firms

would have to be backed by sponsors.

Nevertheless, foreign firms are taking advantage of positive regulatory conditions in the

country. In 2006,

Indonesian firm Kalbe’s research division Innogene Kalbiotech opened a biotech R&D

facility in

Singapore. In order to remain competitive, Kalbe Pharma has begun investing heavily in

R&D, with

Singapore potentially benefiting again from such activities.

In April 2009, Innogene, acting on behalf of the biopharma unit of Indonesian PT Kalbe

Farma Tbk,

signed a memorandum of understanding (MoU) with Malaysian CRO Info Kinetics Sdn

Bhd. The MoU

refers to the provision of accredited bioavailability and bioequivalence studies in

Indonesia, through the

creation of a joint venture (JV), to be named PT Pharma Kinetics, which will act as a

clinical trials

centre. Pharma Kinetics, which will be based in Jakarta (Indonesia) is expected to

provide clinical trials

services to both domestic and regional markets. In 2005, Innogene created another

Indonesian

bioequivalence centre, PT Pharma Metric Labs, in response to rising demand for such

services.

Around the same time, French Humalys SAS announced that it would collaborated with

a Singaporebased consortium – the Singapore Immunology Network (SIgN), which is

affiliated with the

Singapore’s Agency of Science, Technology and Research (A*STAR). The two partners

are due to

accelerate the development of antibody-based therapies that would target viral

diseases widespread

throughout Asia.


Page 27


Bioscience Sector

During Q208, Singapore achieved its goal of making biomedical sciences a ‘key pillar’ of

its economy.

The sector now accounts for over one-tenth of manufacturing output, according to the

country’s

Economic Development Board (EDB). Due to regional rivals eroding its traditional

production industries

– electronics, rubber and chemicals – the city-state is committed to increasing its

involvement in the highvalue biosciences. BMI believes that this strategy is sound and

sustainable, as recently shown by the fact

that two more multinationals are establishing production plants in Singapore.

In 2009 biomedical companies made fixed asset investments of more than US$800mn

in Singapore. In

the whole of 2008, US$500mn was invested by foreign players in Singapore’s

biomedical sciences sector,

according to Singapore’s EDB, with biosciences contributing US$13mn to total

manufacturing output. In

the previous year, sector expenditure topped US$760mn, with staff numbering over

11,500, double the

number in 2000. Singapore’s biosciences industry presently boasts the presence of 50

global companies

(including Bayer, Takeda, Millipore and Schering-Plough), which are often involved in

partnerships

with some 30 local public-sector academic and research institutes. By 2015, the

government is targeting

US$17bn in biosciences manufacturing output (up from US$4.56bn in 2000), with the

support of its costsharing of wages and training programme.

In April 2008, both Switzerland-based Alcon and US drug maker Wyeth announced plans

to increase

their Singaporean footprints. Alcon intends to open a US$160mn, 250,000m2 facility to

make eyecare

products by 2012, with the construction officially opened in May 2009. Meanwhile,

Wyeth will inject

US$96mn in its nutritional manufacturing plant to increase capacity by 50%.


Page 28


Recent Research and Development Activities

! In October 2009, US-based multinational conglomerate corporation 3M opened its first

Asian drug

delivery R&D laboratory in Singapore. Singapore’s Minister for Trade and Industry Lim

Hng Kiang

stated that the new R&D laboratory will facilitate the introduction of new drug delivery

device

capabilities which in turn will strengthen biomedical research in the region.

! In April 2009, US major Baxter Biosciences announced the construction of a new plant

in Singapore

for the manufacture of an API used in haemophilic treatment Advate (rAHF PFM).

Production of the

ingredient is expected to start within the next three to five years, with the site

eventually employing up

to 230 staff. Baxter, which already operates three similar sites in the country, has not

disclosed the

details of the latest investment, although estimates suggests that it could be as much

as US$1bn, given

the high costs of biologics manufacture.

! In April 2009, A*STAR and Hungary’s National Office for Research and Technology

(NKTH)

awarded research grants to scientists under the A*STAR-NKTH collaborative research

initiative,

aimed at promoting scientific R&D and enhancing human capital development. The

recipients of the

grants will carry out research projects in cancer, bio-imaging for stem cell therapy,

stroke

rehabilitation and drug delivery. The projects will be jointly led by Singaporean and

Hungarian

researchers.

Clinical Trials

Singapore is fast becoming a leading hub for one of Asia’s growth industries – clinical

trials. The citystate is being targeted by drug companies seeking to exploit Asia’s huge

population and ethnic diversity

to test medicines. Singapore is an attractive location as it offers a world-class transport

network, as well

as a highly educated, English-speaking population. Another plus is the advanced IP

regime, bolstered by

its free trade agreement with the US. However, firms caution that Singapore still needs

to improve its

cold-chain storage facilities as well as its IT and telecommunications infrastructure.

South East Asia has a large treatment-naïve population, which affords excellent

opportunities for drug

companies wishing to test advanced medicines, whereas high levels of cross-resistance

hamper clinical

trials in the West. This could be because many recruits are veterans of previous trials,

which may have

altered their physiology, or they are already taking various medications that may react

with the test drug.

Some of the biggest expenditures for Western clinical trials are delays caused by a

failure to find suitable

test patients, despite the sizeable remuneration offered. In Asia, these costs can be

slashed, but this has led

to accusations that drug companies are exploiting poverty stricken patients, amid

claims that volunteers

are sometimes paid very little and are unaware of the exact nature of the trials.


Page 29


Through its EDB and a SGD550mn (US$349.34mn) investment, Singapore is planning to

significantly

increase the number of clinical trials it conducts, as it cements life sciences as one of

the key pillars of its

economy. Due to its small population, the country is specifically targeting phase I trials

and over the next

five years it hopes to double the number of studies that take place.

Attracted by tax breaks, all the major pharmaceutical companies have set up regional

centres in

Singapore. For example, US firm Eli Lilly has created a Clinical Pharmacology Centre at

the National

University of Singapore and carries out over 15 drug trials a year, specialising in

ethnopharmacology,

which is particularly pertinent, given the multicultural composition of Singapore’s

population. Danish

company Novo Nordisk is conducting clinical trials of investigational drugs in the

country through its

US$10mn Asia Pacific Clinical Development Centre. US-based major Pfizer has

announced in April

2010 that it is planning to increase the number of its clinical trials in Singapore by 10%

in 2010 from the

23 trials conducted in 2009. Pfizer conducts its clinical trials in Singapore’s Raffles

hospital.

CROs have also set up bases in Singapore, including PPD, Parexel, Icon Clinical

Research, Covance,

Quintiles and MDS Pharma Services, the latter three of which have also established

dedicated central

laboratory testing services, demonstrating their commitment to the country. In March

2009, Parexel’s

Singapore’s operations received the award for the best-performing CRO from

BioSingapore. Parexel was

honoured for supporting clinical research throughout Asia Pacific. Present in Singapore

since 1995,

Quintiles announced in November 2009 that it planned to double its workforce to over

500 employees.

The company expanded its Singaporean facility by leasing a total of 7,300 m2 of space

in the Cintech IV

building, which will help the company serve the growing demand for its services

throughout the AsiaPacific region.

According to the ClinicalTrials.gov website, Singapore was conducting 495 clinical trials

as of November

2009, which rose to 625 in February 2010, 257 of which were still recruiting. The

primary reasons for this

position are its English-speaking citizens, world-class network of hospitals and the full

adoption of

International Conference on Harmonisation (ICH) and GCP guidelines. However, BMI

cautions that

Singapore will have to continue to promote and improve its clinical trials industry as

China and India

emerge as increasingly viable alternatives.


Page 30


Recent Developments in Clinical Trials Industry

!

In February 2010, the College of American Pathologists (CAP) awarded its accreditation

to a

Singapore-based facility of PPD, an international contract research organisation (CRO).

Signifying

the Singaporean centre’s high level of quality, the accreditation was received only six

weeks after the

laboratory was opened. PPD has presence in over 40 countries globally, with three other

of its

laboratories already CAP-certified. Expansion into Singapore is a response to rising

demand for CRO

services both in the country and regionally.

!

In January 2010, Japan-based trading house Mitsui & Co announced that it will spend

around

JPY400mn (US$4.39mn) to acquire an almost 50% stake in Singapore-based drug

development

support firm Gleneagles CRC, reports Bernama. Through this deal, Mitsui is planning to

support

Gleneagles CRC in its expanding operations in the Asia-Pacific region.

!

In June 2009, the National University Hospital (NUH) inaugurated its new Investigational

Medicines

Unit, which is charged with early-phase testing of new drugs, devices and medical

procedures on

humans. The US$20mn site aims to promote Singapore’s standing as a clinical trials

base.

!

In April 2009, the Association for the Accreditation of Human Research Protection

Programs

(AAHRPP) accredited US-based pharmaceutical company Pfizer for protecting human

rights while

conducting early stage clinical trials. This is the first accredited pharmaceutical

company. Its clinical

research units (CRUs) in New Haven, CT, Brussels, Belgium and Singapore earned the

AAHRPP

accreditation following a 15-month examination of the clinical research practices.

AAHRPP ensures

better-quality human research protection practices to promote ethically sound research.

!

Around the same time, the vaccines arm of French drugmaker Sanofi-Aventis, Sanofi

Pasteur,

commenced clinical trials of its investigational dengue vaccine in Singapore, as well as

Vietnam. The

drug (tetraelent) is already being tested in Thailand and the Philippines. In Singapore,

the company is

collaborating with the Communicable Disease Center. The vaccine is targeting an

increasing number

of dengue cases across the whole of Asia Pacific. Globally, some 2mn children and

238mn adults are

infected with dengue on an annual basis, with the disease being the leading cause of

hospitalisation in

endemic countries.

!

In March 2009, Novartis announced that it was hoping to start testing dengue fever

therapeutics on

humans by 2011. The Novartis Institute for Tropical Diseases, created in partnership

with the

government of Singapore, had originally been hoping to start human trials in 2008, but

the

programme was discontinued due to safety concerns. In the meantime, Singapore’s

authorities

continue to meet with the WHO in order to discuss measures to detect and combat

dengue. According

to the National Environment Agency, in 2008, the government successfully cut infection

rates by


Page 31


20%, thanks to a range of measures, such as requesting that buckets containing

stagnant water are

removed by residents.

Medical Devices

Operating under the HSA, the Centre for Medical Device Regulation (CMDR) is the

healthcare

equipment supervisory body in Singapore. However, its remit used to be limited. Only

contact lens,

radiation emitting devices and condoms were covered under statutory control through

certain provisions

contained within the Medicines Act and Radiation Protection Act. The voluntary product

registration

scheme was in operation for other devices.

Table: Classification Of Medical Devices In Singapore

Class

Risk

Examples

A

Low

Surgical retractors/tongue depressors

B

Low-moderate

Hypodermic needles/suction equipment

C

Moderate-high

Lung ventilator/bone fixation plate

D

High

Heart valves/implantable defibrillator

Source: Centre for Medical Device Regulation (CMDR)

In order to tighten up regulations and prevent dangerous goods entering the market,

the CMDR evaluated

the best practices employed by the leading foreign agencies, such as the US Food and

Drug

Administration (FDA) and the European Medicines Agency (EMEA). After several years of

deliberation

and planning, it was decided to amend the regulatory framework based on the

principles endorsed by the

Global Harmonisation Task Force (GHTF), with modification to suit the Singaporean

context.

With the passage of the Health Products Act of 2007, the CMDR now has increased

powers to regulate

medical equipment in Singapore. In order to prevent disruption to commercial activities,

the new rules

will be implemented in three phases. From November 2007, medical device

manufacturers have been o

report adverse events to the HSA, notify the agency of product recalls, and keep

records of complaints

and distribution channels.

The second phase has just started and involves the HSA accepting applications for

licensing dealers of

medical devices and registration dossiers for healthcare equipment. In most other

countries, this

bureaucratic process would be fraught with difficulties. However, Singapore’s

governmental departments

are well funded and staff are renowned for their efficiency.


Page 32


Two stages make up the third phase. From October 2009, the unlicensed

manufacturing, importation and

wholesaling of healthcare equipment is prohibited. In addition, the supply of

unregistered Class B, C and

D devices is banned. Starting in October 2010, the final stage of the third phase

prohibits the supply of

Class A medical devices, such as surgical retractors and tongue depressors.

Singapore has around 80 clinical laboratories in both the public and the private sector,

including some 18

independent centres. Largest laboratories are found in government-run hospitals and

well as the three

hospitals run by the private Parkway Group.

Given that there are no custom duties on medical devices, imports account for a

significant share of the

local market. From the start of July 2007, a goods and services tax (GST) of 7% has

been applied to

locally sold goods and services, up from 5%. The payments are refundable on re-exports

due to

Singapore’s entrepôt status. The US, Japan and Germany are the top three leading

suppliers of medical

equipment. Although Singapore allows the importation of pre-owned medical devices on

the same terms

as new, we expect this to change in the medium term.

Agents and distributors usually charge mark-ups of 30-40%. Suppliers of the pharmacy

retail segment

have to pay listing fees for advantageous shelf space, which could cost up to

US$30,000. Large chains

usually charge higher listing fees, due to their prominence in the market. This is

especially true in regards

to the self-test market for medical devices.


Page 33


Recent Developments in the Medical Devices Industry

! In October 2009, US major Medtronic invested SGD80mn (US$55.94mn) in a

Singaporean

manufacturing facility producing cardiac rhythm disease management devices for the

regional market.

The plant is due to become operational in the course of 2011. Singapore has also

become the

company’s regional operational headquarters, with Asia already accounting for around

10% of its

annual sales.

! In April 2009, global manufacturer of microplate instrumentation and software BioTek

reported that

it would expand its Singapore office, in order to increase support to its Asia-Pacific

distribution

network. The company’s new office space includes a demonstration facility, which will

also allow for

training programmes to be run for BioTEk’s customers.

! In March 2009, Zecotec Photonics announced the receipt of grants from the Singapore

Economic

Development Board (EDB) as well as the Malaysian Industrial Development Authority

(MIDA),

indicating the commitment of the two governments to developing their medical devices

and

biotechnology industries. The company works on the development of photonics

technologies for

medical industry and has already received two grands from the EDB, through its

Research Incentive

Scheme.

! In February 2009, Australian medical diagnostics company HealthLinx finalised the

commercial

terms for the launch of its OvPlex device in Singapore, Malaysia and a number of other

Asian

countries, over the next decade. OvPlex, which is used to detect early-stage ovarian

cancer, will be

distributed by Singapore’s Inex, a specialist distributor working in the field of women’s

health and

disease.


Page 34


Industry Forecast Scenario

Overall Market Forecast

In local currency terms, Singapore’s

Pharmaceutical Market Forecast

SGD812mn (US$560mn) pharmaceutical

2005-2019

market is forecast to reach SGD860mn

(US$628mn) in 2010. The 2009-14 and

0.4

1.0

0.8

(6.66% and 4.70% in US dollars, due to

0.4

the strengthening of Singapore dollar).

0.2

By 2019, pharmaceutical sales are

0.0

forecast to reach SGD1.135bn

(US$873mn).

0.3

0.2

0.1

0.0

2012f

2013f

2014f

2015f

2016f

2017f

2018f

2019f

respectively in local currency terms

0.6

2005

2006

2007

2008

2009

2010f

2011f

2009-19 CAGRs are 4.18% and 3.41%,

Drug expenditure (US$bn), LHS

Drug expenditure as % of GDP, RHS

Like many other countries that entered

recession in late 2008/early 2009,


Database, DESA/UNSD, BMI. For data, see Forecast Tables section

below.

Singapore’s government increased state

spending to protect the economy. Fiscal expenditure rose from SGD31.3bn (US$22.6bn)

in 2007 to

SGD37.5bn (US$27.1bn; +19.8%) in 2008 and to SGD40.5bn (US$29.2bn) in 2009.

Spending is forecast

to reach SGD44.7bn (US$32.3bn) in 2010 and SGD47.2bn (US$34.1) 2011.

Singapore’s population will only grow marginally over the next decade. The number of

people residing in

the country will increase from an estimated 4.9mn in 2009 to 5.5mn in 2019, equating

to a CAGR of

1.16%. Unlike its immediate neighbours, Singapore’s population is rapidly ageing. The

dual forces of a

low birth rate and high quality healthcare means that the proportion of those aged 65

and above will

double to 20% by 2020.

Inflation is not a major problem in Singapore. During 2003-2007, the consumer price

index (CPI) – which

BMI uses as a proxy for inflation – fluctuated between 0.1% and 1.6%. It rose to 4.3% in

2008, but was

virtually negligible in 2009 (0.2%). The CPI will rebound in 2010, but is not projected to

exceed 2.5%

through to 2019. It is forecast to peak at 2.5% in 2010 and 2011 before dropping

steadily to 1.9% in 2016

where it is forecast to stay until 2019.


Page 35


Key Growth Factors – Industry

The development of the healthcare

Healthcare Expenditure Forecast

sector, and the resultant increase in

2005-2014

healthcare expenditure, are expected to

drive market and industry growth,

which, additionally, will be boosted by

foreign direct investment (FDI).

Moreover, the government’s intention to

invest heavily in the life science

industries, including pharmaceuticals, is

likely to drive industry growth in the

short term. However, the small size of

the country’s population, and the lack of

strong links between academic and

industrial sectors are among the factors

likely to hinder the signing of more deals

f = forecast. Source: Hong Kong's Domestic Health Accounts, Hong

Kong Food and Health Bureau, World Health Organization (WHO),

BMI. For data, see Forecast Tables section below.

in this area, although the latter are

improving.

Nevertheless, government policy has already created a very favourable business

environment for

pharmaceutical companies, and the government is now likely to meet its goal of having

at least 10

multinational production facilities operational in the country by 2010. Recently passed

drug patent

legislation, which has brought domestic regulations further in line with international

norms – and notably

US legislation – has been indicative of this trend.

Singapore is also keen to position itself as Asia’s leading location for life sciences and

drug development,

pumping a considerable amount of capital in this area. The island is well on the way to

achieving this

dream, thanks to generous government financial and practical support, as well as

private investment from

foreign drug makers. For example, Novartis, Pfizer and GSK invested a combined total of

significantly

more than US$1bn over the 2004-2008 period.

The above trends will benefit not only multinationals, which continue to express strong

interest in local

manufacturing as well as R&D, but also domestic companies seeking to form joint

ventures with overseas

players. Smaller biotechnology and similar firms, such as SciGen and MerLion

Pharmaceuticals, have

been successful in attracting foreign capital and the formation of strategic partnerships.


Page 36


Key Growth Factors – Macroeconomic

Upgrading Our Outlook For 2010

BMI View: On account of strong Q110 GDP data and signs that external demand will

remain robust, we

have upgraded our forecast for Singapore's real GDP growth to 7%. We expect this

figure to fall to 4.3%

in 2011, however, when the low base effect and inventory restocking boost wears off.

Advance estimates from the Ministry of Trade and Industry (MTI) showed that

Singapore's Q110 real

GDP growth reached a spectacular 32.1% on a seasonally adjusted (SA) quarter-on-

quarter (q-o-q)

annualised basis, led by the resurgent manufacturing sector. Given the sharp pick-up in

export demand,

we have decided to raise Singapore's real GDP forecast to 7%, at the lower end of the

government's

projections of growth between 7% and 9% for 2010. However, this robust growth figure

is unlikely to be

repeated in 2011 and we expect real GDP growth to taper down to 4.3% as the low base

effect, reduced

restocking, plus a dip in the US and Chinese economies, kick in.

Domestic Demand To Be Stoked By Increased Government Spending

The government has set the stage for aggressive expenditure over the next few years

and we believe that

these measures, which were announced in the budget on February 22, will have

considerable positive

spill-over effects on growth. Indeed, the government is projecting a primary deficit of

SGD5.6bn (about

2.0% of GDP) for FY2010 (April-March), larger than the primary deficit of SGD4.3bn

(US$3.1bn)

estimated by the government in FY2009. Much of the increase in spending will be

channelled towards

raising productivity and helping Singapore remain competitive. Broadly speaking, we

see three main

benefits from increased budget spending and limited detrimental effects, given that the

government's

balance sheet is generally quite healthy.

Increased government spending will directly contribute to headline growth. Given that

the initiatives to

boost productivity are longer-term in nature, we can reasonably expect real government

consumption to

maintain growth of around 3% for the next three years. While this figure may seem

small, it must be

noted that government spending already surged by 8.3% in 2009 in light of the

downturn.

Providing incentives for firms to increase productivity indirectly means that firms will

have to invest

more. Over the last five years, Singapore has been suffering from a drop in productivity,

largely thanks to

the influx of lower-cost foreign workers over the same time period. Although

Singapore's gross fixed

capital formation (GFCF) growth has been impressive, averaging 6.7% over the last five

years, a

prolonged period of deleveraging in the US and the eurozone will provide a considerable

drag on

investment growth. With government incentives likely to encourage investment, we

believe that GFCF

growth can reach our forecast average of 4.8% over the next three years.


Page 37


Real income should increase amid rising productivity, supporting private consumption

growth. Although

improving productivity is a longer-term goal and success of the government policies is

not guaranteed,

judging by the track record of the government in implementing economic policies over

the last 40 years,

we can reasonably expect these measures to be followed through. Therefore, we now

expect private

consumption growth to average 3.3% over the next three years, despite an expected

slowdown in the

intake of immigrants.

Trade-Led Growth In Coming Quarters

We have become more optimistic about the strength of external demand in the coming

two quarters, and

have subsequently adjusted our forecast for export growth to 11.5% and net export

growth to 20.2% for

2010. Underpinning our view is the strong manufacturing and tourism data that we

have seen thus far in

Q110.

The rebound in the important manufacturing sector, which makes up almost a quarter

of GDP and is

largely driven by external demand, is very encouraging since this component has been

lagging the

services side. We believe this recovery can be sustained for the coming two quarters

amid continued

inventory restocking and further normalisation of trade flows. Indeed, on a seasonally

adjusted (SA) q-o-q

annualised basis, manufacturing growth rose by a whopping 139% in Q110, a snap-back

from the

disappointing 29% contraction in the preceding quarter, fuelled by greater electronics

and biomedical

output.

In line with our view, there was also broad-based recovery in the services producing

industries, with

output rising by 11% in Q110 on a SA q-o-q annualised basis. Within these industries,

the wholesale

trade segment emerged as an outperformer due to increased exports over the last few

months. We believe

export demand will remain reasonably strong, providing significant spill-over effects on

other servicesproducing segments including financial services, transport and storage,

and business services.

Importantly, encouraged by recent visitor arrival numbers, the export of services

(particularly tourismrelated services) should grow fairly strongly, driven by the opening

of the two integrated resorts in early

2010.

Worrying About 2011

Having said that, we note that export growth on a y-o-y basis has most likely peaked

and growth will

moderate in the coming quarters. Indeed, our main concern with Singapore's economy

over the next two

years lies with the sustainability of the pick-up in external demand seen so far. While

the outlook up to

Q310 remains reasonably sanguine, we are worried about the impact of a slowdown in

the US and China

(which is becoming an increasingly important export destination) in 2011. We have

already factored in a

slowdown in real GDP growth in the US (1.8% in 2011, from 2.8% in 2010) and China

(7.5% in 2011,

from 8.8% in 2010) and consequently expect Singapore's real GDP growth to slow in

tandem to 4.3% in

2011.


Page 38


On the domestic front, surging property prices pose a looming threat. Should property

prices fall in 2011,

private consumption growth could be stunted. Moreover, we believe that restocking will

play a large role

in contributing to GDP growth in 2010, but the effect will become less marked towards

the end of 2010

when most of the process is unwound.

Table: Singapore – Economic Activity

2007

2008

2009

2010f

2011f

2012f

2013f

2014f

251.6

257.4

254.4

284.8

305

327.1

350.4

373.4

168.1

173.1

166.6

190.5

204.6

217

229.1

239.3

7.7

1.4

-2

7

4.3

4.5

4.6

4.5

35,205

35,764

33,405

37,820

40,196

42,221

44,154

45,741

4.6

4.8

4.9

5

5

5.1

5.1

5.2

Industrial production

3,5

index, % y-o-y, ave

6.8

-3.6

-3.3

3

4.8

5.3

6.3

6.2

Unemployment, % of

4,7

labour force, eop

2.3

2.4

3

2.5

2.6

2.5

2.5

2.5

Nominal GDP, SGDbn

Nominal GDP, US$bn

5

5

Real GDP growth, %

1,5

change y-o-y

GDP per capita, US$

Population, mn

f

2,5

6

1

2

3

4

Notes: BMI forecasts. y-o-y comparison; Nominal figures; Manufacturing data used;

Unemployment figures are

5

6

7

midyear estimates; Sources: Statistics Singapore/IMF/BMI. Statistics Singapore/BMI;

Ministry of Manpower/BMI.


Page 39


Prescription Drug Market Forecast

The market share of prescription drugs is

Prescription Drug Market Forecast

forecast to remain stable (at around 78-

2005-2019

79% of the total), with sales expected to

up from SGD633mn (US$437mn) in

2009. The prescription segment will post

a CAGR of 4.35% in local currency

terms, somewhat above that for the

overall market growth, which will retain

most of this momentum in the following

five years.

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0.0

90

80

70

60

50

40

30

20

10

0

2005

2006

2007

2008

2009

2010f

2011f

2012f

2013f

2014f

2015f

2016f

2017f

2018f

2019f

reach SGD784mn (US$603mn) by 2014,

Prescription drug market (US$bn), LHS

Prescription drug sales as % of total market, RHS

An increase in demand for healthcare,

combined with an ageing and more

f = forecast. Source: IMS Health Asia, United Nations Comtrade

Database, DESA/UNSD, BMI. For data, see Forecast Tables section

below.

sophisticated population are set to be the

key growth drivers, with continued perception of hospitals as the primary source of

treatment for serious

disease and drug marketing. There is also potential for this to be aided by the

introduction of locallydiscovered novel medicines, while the strengthening of links

between primary and secondary care –

especially in regards to the care of the elderly – should stimulate demand for longer-

term treatments.

In the meantime, downward pressures on drug prices will culminate to lower projected

revenues for the

prescription medicines sector, while potentially boosting volumes of branded products,

especially in the

face of global pandemics, such as avian and swine influenza. Government plans to

encourage parallel

imports as a means of cost-containment would negatively impact the sector, although

the discussions

remain in preliminary stages.

Meanwhile, according to recent research, patients in Asian countries such as Singapore

are increasingly

seeking sources other than doctors for information on health disorders and treatments.

There is also

evidence to suggest patients are being influenced by outlets such as the internet and

the mass media.

Although doctors are still the preferred source of information, broadcast, print and

online media are also

seen as generally being reliable.

This trend could change the way prescription drugs are promoted, with companies

focusing less on

traditional doctor detailing and looking into areas such as the internet. Having said this,

such a change

may fall foul of the country’s strict rules on direct-to-consumer advertising. In

Singapore, companies can

run disease awareness campaigns (DACs), but are obliged to provide only non-biased

information with no

emphasis on particular medicines.


Page 40


The leading therapeutic segments – cardiovascular, alimentary tract and nervous

system drugs – are set to

retain their dominance, accounting for around one-third of the prescription market. The

fourth-best

performing area, antibiotics, will continue to grow due to the rising need for such

medication, although

the government may wish to address the rising resistance to antibiotics by restricting

their prescription

levels.


Page 41


Patented Drug Market Forecast

Like many Asian countries, the

Patented Product Market Forecast

importance of branding is very

2005-2019

significant in Singapore, with consumers

ascribing quality to a trusted

70

60

50

40

30

20

10

0

0.6

0.5

manufacturer. In fact, in Singapore,

0.4

branded medicines continue to be more

0.3

popular than generics, in contrast to

0.2

consumers prefer generic drugs over

branded versions. Moreover, the vast

majority of people prefer older

medications over the latest innovation.

2018f

2019f

2014f

2015f

2016f

2017f

2011f

2012f

2013f

report published in April 2009, global

0.0

2007

2008

2009

2010f

According to a Health is the New Wealth

0.1

2005

2006

many other developed markets.

Patented product market (US$bn), LHS

Patented product sales as % of total market, RHS



Market research firm DDB Health Group interviewed 1,831 consumers and physicians in

11 developed

and developing countries, with a focus being on access to and utilisation of healthcare.

A total of 36

questions were asked, including if they ‘prefer to take a generic version of medicine

over a branded one

when it is available’. Somewhat surprisingly in BMI’s opinion, 54% of responses were

affirmative, while

the remainder said they ‘prefer a known brand name of a medication over a generic

version of the same

medicine’.

As such, patented medicines (even those that have no IP protection) are frequently

requested by patients,

despite the cost disparity. For example, a year’s supply of US-based Pfizer’s Norvasc

(amlodipine) costs

SGD720 (US$527), while a generic equivalent – Indian firm Dr Reddy’s Stamlo

(amlodipine) – is priced

at SGD140 (US$102). According to a local pharmacist, some patients prescribed generic

drugs by

hospitals ask to switch back to the branded product they received previously. Safety is

frequently the

cited reason for the reversion.

In the forecast period, patented medicines will benefit from the transfer of some

financial responsibilities

from the public to the private sector. Additionally, an increase in local R&D activity is

likely to result in

some additional new launches in the country over the coming five years, with several

medicines emerging

from the lucrative biotechnology sector. These factors should drive the growth of the

segment (forecast at

a CAGR of 3.95% and 3.12% in local currency terms, over the next five and ten years,

respectively),

despite the counter-pressures brought about by the need for cost-containment and the

fact that patented

drugs are expected to lose some share of the total market to generics.


Page 42


Epidemiological factors will also be responsible for driving growth of individual

therapeutic areas. For

example, according to Channel NewsAsia, Swiss drug company Roche recently indicated

that sales of

Tamiflu (oseltamivir), an anti-viral drug, increased significantly following the rise in flu

cases in

Singapore in 2008. Stockpiling Tamiflu is not only meant to fight against avian flu but it

is also

prescribed for the treatment of severe flu.


Page 43


Generic Drug Market Forecast

Sales of generic drugs are modest in

Generic Drug Market Forecast

affluent Singapore. BMI calculated the

2005-2019

value of the sector to be just SGD84mn

(US$58mn) at the end of 2009,

representing 10.3% of the total

pharmaceutical market (generic drugs +

OTC medicines + patented preparations).

0.14

14

12

10

8

6

4

2

0

0.12

0.10

0.08

0.06

0.04

0.02

countries, the city-state is increasingly

0.00

becoming more cost conscious when it

comes to healthcare. Accordingly, we

expect the value of the generic drug

segment to reach SGD116mn (US$89mn)

in 2014. Its growth (at a CAGR of 6.82%

2005

2006

2007

2008

2009

2010f

2011f

2012f

2013f

2014f

2015f

2016f

2017f

2018f

2019f

However, as with most other developed

Generic drug market (US$bn), LHS

Generic drug sales as % of total market, RHS



and 6.14% in local currency terms over five and ten years, respectively) will

significantly outpace that of

both the patented and the overall market.

A survey conducted by the Straits Times found that demand for generic drugs has not

gone up

significantly in recent times, though there are some reports of a slow shift towards the

cheaper

alternatives. It is BMI’s view that acceleration in the uptake of generic medicines will

take place after

2010, when the patents for Advair (fluticasone + salmeterol) and Lipitor (atorvastatin) –

the bestselling

drugs for asthma and high cholesterol, respectively – expire.

The signing of the FTA with the US in 2003 has had a positive impact on the generic

drug sector, given

that the country already had relatively comprehensive IP laws. The number of generics

on the market has

risen from 784 in 2003 to 847 in 2004 and 910 in 2005, totalling a 21% increase in

generics between

2003 and 2005. No data are available for 2006, but the HAS approved 40 additional

generic drugs in

2007.


Page 44


OTC Medicine Market Forecast

The OTC sector will post more modest

OTC Medicine Market Forecast

growth over the forecast period than

2005-2019

other market segments, at a CAGR of

3.58% and 2.83% in local currency

terms over the coming five and ten

years, respectively. OTC manufacturers

are expected to continue focusing mostly

on established items, with some, but

little, promotional support. Recent

research indicated that over 80% of

consumers in Singapore purchase an

OTC product because it is their usual

brand.

Nevertheless, the increased use of and

f = forecast. Source:ACNielsen, Association of the European SelfMedication Industry,

BMI

reliance on information available online will facilitate the promotion of OTCs as a class,

creating new

demand. Private labels (such as products by retail chains Raffles, Watson and Guardian)

have been

gaining prominence in recent years, given that their quality is equal to that of branded

products, while

their price is lower. Competition in the OTC sector is intensifying, potentially leading to

lower prices,

although no manufacturers are expected to gain dominance. Raffles Medical Group is

targeting 15-20%

revenue growth in 2010 and is expecting revenue growth from other Asian countires, for

example Hong

Kong where it is planning to open two more clinics in 2010.

The potential for OTC switching as a cost-containment measure will boost volumes of

non-prescription

drugs, although patient attitudes and purchasing power will be key determinants of

value increases.

However, prescription drugs are not expected to lose any ground to OTCs over the

forecast period, with

the market share of consumer health products actually falling slightly from 22.0% of the

market in 2009

to 21.4% in 2014 and to 20.8% in 2019.

The best-performing OTC segment, analgesics, is expected to record annual growth

similar to OTCs

overall, while sales of cough and cold medicines are likely to be positively affected by

fears over an avian

and swine flu pandemic. The rest of the OTC market will continue to be boosted by

patient demand, as

well as regulatory and advertising factors. Strong purchasing power and general

affluence of the

population will also benefit OTC growth, provided the economy continues to perform

well.

Vitamins and dietary supplements are mainly supplied through health food stores, with

the two largest

ones being General Nutrition Centres (GNC) and Nature Farm. Their popularity is rising,

as people


Page 45


show increasing preference towards specialist stores, although direct sellers also remain

an important

source of vitamins and dietary supplements, amid the relaxation on multi-level

marketing rules.


Page 46


Medical Device Market Forecast

It is BMI’s view that Singapore’s

Medical Device Market Forecast

SGD432mn (US$298mn) medical device

2005-2014

market is set for a period of modest

growth. The main drivers will be

increased spending on healthcare and a

growing medical tourism sector, but the

8

7

6

5

4

3

2

1

0

0.4

0.3

0.2

downward pressure on prices in the

forecasting CAGR of 2.69% in local

2014f

2013f

2012f

2011f

2009

2008

2007

M edical device market (US$ bn), LHS

research initiative will also boost the

sector. Through to 2014, we are

2010f

expansion of the city-state’s biomedical

2006

0.0

adversity. However, in the longer-run,

2005

especially in the times of economic

2004

0.1

2003

public sector will have a major impact,

M edical device sales as % o f to tal healthcare market, RHS

f = forecast. Source:Centre for Medical Device Regulation (CMDR),

BMI. For data, see Forecast Tables section below.

currency terms.

Over BMI’s five-year forecast period, demand for medical devices will predominantly

come from public

and private hospitals and clinics. The Ministry of Health is the largest consumer and

accounted for 70%

of sales in 2008 (US$213mn). As owner of the three main private hospitals on the

island, Parkway Health

is the next largest customer for medical devices. Expansion of its facilities will therefore

have a positive

impact on market demand.

More recently, residents of Vietnam have increasingly began looking abroad for quality

healthcare

services, with Singapore (alongside the US and Europe) being the preferred destination.

Rising numbers

of medical tourists will, therefore, also serve to prop up longer-term growth of the

Singapore’s market for

medical devices, wider economic conditions permitting.

It is important to note that BMI’s valuation of Singapore’s medical device market is

significantly less

than other sources. The US Department of Commerce estimates that sales of medical

devices in the citystate were US$535mn in 2004. This is more than medicines sales and

equates to over 10% of healthcare

spending, which is excessive. For the same year, the US Commercial Service quotes a

figure of

US$559mn, which, in our opinion, is also too high.


Page 47


Pharmaceutical Trade Forecast

Singapore had increasingly turned to

Pharmaceutical Trade Forecast (US$mn)

pharmaceuticals as a key trade

2005-2014

commodity, given the waning importance

8,000

of technological exports; however, the

economy still remains dependent on

6,000

electronic goods exports. The drawback

4,000

of pharmaceutical exports is that

2,000

pharmaceutical manufacturing output

0

fluctuates on a monthly basis, as factories

different medicines. Moreover, given the

unpredictable nature of the industry, a

drug can be withdrawn at short notice,

Exports

Imports

2014f

2013f

2012f

2011f

2010f

2008

2009f

2007

2006

2005

2004

between the manufacture of batches of

- 2,000

2003

often lie dormant for weeks to be cleaned

Balance

f = forecast. Source:United Nations Comtrade Database,

DESA/UNSD, BMI. Note: HS2002 - 3004 classification. For data,

see Forecast Tables section below.

leaving an acute capacity vacuum.

Additionally, the global economic crisis is likely to affect the exports from Singapore,

due to flagging

demand abroad.

Non-oil exports rose 21% year-on-year in January 2010. Pharmaceutical output dropped

by 30% in

January after a 76% rise in December 2009; however, on a seasonally-adjusted basis

pharmaceutical

manufacturing rose by 11.8% from December to January. Biomedical manufacturing

rose by 48.4% from

December 2009 to January 2010. Exports to all major markets other than the EU rose,

but exports to the

EU dropped by 31.4%. Non-oil domestic exports rose by 26% y-o-y in December 2009 –

the sharpest rise

since December 2005. Non-electronic exports rose by 27%, led by pharmaceuticals and

petrochemicals.

Another sharp surge for pharmaceuticals is expected to be evidenced when Q1 figures

are available,

because two plants were due to start production. However, it is also expected that the

volatile nature of

the sector will come into play in Q2.

In fact, in February 2009, pharmaceutical exports fell by 23.4% to US$1.3bn. In the

previous month,

exports of pharmaceuticals, chemicals and petrochemicals decreased by 32.4%,

according to International

Enterprise Singapore (IE Singapore). Pharmaceuticals fell 4.5%, following two months of

declines of

around 50%, as Singapore experiences its worst overall export performance on record.

Still, Singapore has identified biomedical research (in particular) and pharmaceuticals

(in general) as the

cornerstones of its future prosperity. Manufacture of medicines is particularly sensible

given the citystate’s proximity to the major shipping lanes of South East Asia.

Possessing a high-volume regional


Page 48


airline hub also enables Singapore to transport high-value medical products – for

example cold-chain

vaccines – at lower cost than other manufacturing bases, such as Ireland and Puerto

Rico.

In March 2007, pharmaceutical exports – followed by exports of ships and boats,

petrochemicals and

printing bookbinding machinery – increased dramatically, driven by rising global

demand for medicines.

According to IE Singapore, non-oil domestic exports were valued at SGD15.2bn

(US$10.1bn), up 1.6%

y-o-y. However, this was tempered by reduced output of Singapore’s traditional export

produce

(including integrated circuits, disk drives, telecommunications equipment and consumer

electronics),

which have continued to fall.

By the end of 2006, Malaysia, Singapore, Thailand, Indonesia and Vietnam succeeded in

harmonising

their pharmaceutical exports as part of the ASEAN Common Technical Dossiers (ACTD)

programme.

The decision to harmonise dossiers eliminated some of the cumbersome bureaucracy

that had previously

been responsible for delays in pharmaceutical trade. Other ASEAN members were due

to adopt common

standards by the end of 2008.

BMI expects more drugmakers in South East Asia to get GMP accreditation after a major

regional trade

agreement was signed in April 2009. Upgrading facilities and processes will require

considerable

investment in the short term, but producers of pharmaceuticals will eventually see a

significant upside,

both domestically and abroad. This is because consumers, especially those on those low

incomes, will

increasingly appreciate the quality of medicines made in the region.

The Sectoral Mutual Recognition Arrangement for GMP Inspection of Manufacturers of

Medicinal

Products is designed to remove barriers that impede the trade of pharmaceuticals

between ASEAN

member states. A country’s drug regulator will approve a drugmaker’s plant and this

certification will be

accepted by fellow ASEAN states, thereby reducing a duplication of effort. Full

implementation is

expected by January 2011.

In addition to adhering to GMP standards, the agreement states that medicine

producers must also meet

Pharmaceutical Inspection Cooperation Scheme (PIC/S) guidelines. Conceived by the EU

authorities,

PIC/S is proving increasingly popular as it seeks to encourage dialogue between

regulatory authorities. As

of August 2009, there were 37 participating agencies.

In the meantime, imports are likely to increase as the indigenous sector remains small

and the demand for

more advanced, foreign-produced medicines continues to increase. Nevertheless, the

establishment and

expansion of manufacturing facilities by an increasing number of multinationals may

see growth levels

decline, as more hi-tech medicines are produced locally. Overall, the trade balance will

remain dominated

in final value terms by exports, reaching a surplus of US$5.67bn in 2014.


Page 49


Other Healthcare Data Forecasts

Singapore is set to be the world’s third-fastest ageing country, as the proportion of

those aged 65 and

above will double to 20% by 2020. The two main causes of this are a low birth rate and

high quality

healthcare. A greying population will mean that there are fewer people contributing to

the economy,

which constrains GDP projections. According to UBS Bank, the sharp reduction in labour

growth

because of the ageing population will cause average GDP expansion to slow to 3.9%

between 2006 and

2030, down from 6.9% in the period between 1981 and 2005, which will translate into

more constrained

opportunities for public health financing.

The rising demand for quality care, coupled with the government’s efforts to attract

foreign patients, is

expected to particularly boost the number of private hospitals in Singapore. The number

of hospital

admissions will consequently increase, although population increase will also be

partially responsible for

the trend. However, in the short-term, adverse economic conditions will be an issue

hampering higher

uptake of – especially – more expensive healthcare services.

Additionally, staffing levels are becoming an issue. The shortages will be driven by a

growing and ageing

population, and increasing demand for quality care, which requires a higher staff to

patient ratio. Over the

next five years, an extra 7,000 doctors, nurses and pharmacists will need to be

recruited in Singapore. As

there are not enough locals to fill the posts, foreigners will be employed in the short

term, although

incentives such as training scholarships will eventually end this practice.

According to human resources consultancy firm Robert Walters, there is also a lack of

candidates with

suitable cost-controlling and R&D experiences to fill the posts created by the expansion

of manufacturing

facilities by foreign companies. Similarly, a noticeable trend observed in recent months

is one of sales

representatives moving from pharmaceutical to medical devices companies.

To this end, in early 2010, the former director of Life Sciences Practice at Sterling

Human Resources

launched a new biomedical executive search firm – Resource Scientific International –

which will aim

to match skills and demand with clinical trials and related industries. Around the same

time, another

international life sciences executive search firm – RSA – expanded its operations in

Singapore, which

serves as a regional headquarters. RSA has offices in the UK, the US, Germany and

China, among a

number of other markets.


Page 50


Key Risks to BMI’s Forecast Scenario

The pharmaceutical industry could potentially benefit from the increased use of

preventative medicines,

and the possible discovery of more effective medical treatments for viral diseases

prevalent in Asia

Pacific. However, if the government proceeds with the presently discussed intentions to

reduce drug

prices as a means of cost-containment, the forecast drug industry revenues would not

be achieved.

Similarly, a larger population would strengthen Singapore’s domestic demand and help

balance

fluctuations in external demand. Encouragingly, the government is continuing its efforts

to boost

population numbers, and is targeting a rise of nearly two million over the coming

decades, to 6.5mn,

which would boost demand for domestically-manufactured goods (including

pharmaceuticals). However,

while there are policies in place to boost the birth rate, this substantial increase in the

population is

predominantly reliant on immigrants (often of lower incomes), which may further

promote the use of

generic drugs.

On a positive note, the expansion of local manufacturing facilities by foreign companies

bodes well for

exports from Singapore. Depending on the product mix and the completion dates of

production plants, our

forecasts may be amended in the coming years, reflecting factors such as the higher

price achieved by

biotechnology-based products.


Page 51


Competitive Landscape

Pharmaceutical Industry

The local manufacturing industry is small, at around 20 producers, concentrating mainly

on the

manufacture of medicaments in retail form, although the government aims to create a

stronger

biotechnology and pharmaceutical base in the country. Traditional preference for

branded products will

hamper stronger growth of the domestic industry, but local companies are strong

contenders in the global

biotechnology sector.

On the contrary, most major pharmaceutical companies have a presence in Singapore,

with imports

comprising some 80% of medicines used within the healthcare sector. A number

operate manufacturing

facilities, including Sanofi-Aventis, GlaxoSmithKline (GSK), Merck & Co, Novartis and

ScheringPlough, while also being increasingly active in the Singapore-based R&D field.

The number of multinationals with a direct manufacturing presence has risen

considerably in recent years,

as the government has openly sought investment from foreign pharmaceutical

companies. In fact, the

country’s Economic Development Board (EDB) is targeting a 25% increase in the

number of

pharmaceutical industry jobs (to 15,000) through to 2015 and hoping to increase the

number of

production plants from the current 30 to 50. Biomedical manufacturing has been

identified as a key area

of investment, with production already helping Singapore to weather the recession. In

2008, biomedical

exports accounted for 4% of GDP, or around US$7bn.

Pharmaceutical majors, including Pfizer, Novartis and GSK, have invested a total of

US$1bn in

Singapore between 2004 and 2008. Investments from multinational pharmaceutical

companies such as

Schering-Plough are assisting Singapore’s plans to expand its biomedical industry and

increase

production to SGD$20bn (US$12bn) by 2010, with domestic companies playing their

part through

investment and alliance co-operation with foreign partners.

Overall, the growth in research-based sector activity should lead to a greater

multinational market

presence in both Singapore and across Asia, as multinationals use their Singapore

facilities to develop

their regional trade. The increase in foreign manufacturing capacity is likely to bring

down imports,

especially of finished pharmaceutical products. On the other hand, the level of exports

is expected to rise,

as Singapore’s position as a regional operations hub develops, potentially leading to a

more favourable

balance of trade in pharmaceuticals for Singapore. The selection of the city-state as the

Tamiflu

(oseltamivir) stockpile further underlines Singapore’s status as the regional hub.


Page 52


Domestic Pharmaceutical Sector

The drug industry has been growing rapidly in recent years, amid a surge in demand

from European and

US markets. This trend is likely to continue following the global economic recovery, as

domestic firms

increasingly form alliances with foreign companies. Government initiatives such as the

US$293mn

Biopolis research park are also boosting investment in the sector, although the project

has not yet reached

its full potential. As pharmaceuticals account for over 16% of the total value of

manufacturing in

Singapore, any negative changes will be significant.

The domestic pharmaceutical industry is represented by the Singapore Association of

Pharmaceutical

Industries (SAPI). The organisation has strong links with the authorities, providing

feedback on

healthcare policies and allowing for exchange of information. According to SAPI, the

pharmaceutical

industry presently has around 700 new vaccines and drugs in various stages of

development, targeting a

number of infectious and chronic conditions. To date, the pharmaceutical industry has

invested over

SGD5bn in local manufacturing operations, with most of this sum spent on upstream

manufacturing

activities. However, the authorities continue to be more focused on attracting foreign

multinationals to the

sector rather than developing local manufacturers.

Nevertheless, local pharmaceutical manufacturing output continues to defy the wider

economic trends. In

November 2008, while total manufacturing output in Singapore fell 7.5% due to an

economic slowdown

that impacted exports, pharmaceutical output rose 17.5%. Overall, biomedical output

grew 14.9%.

However, pharmaceutical exports continued to fall in the first few months of 2009.

While official figures indicate that the output of the biomedical manufacturing cluster

shrank by 30.6% in

October 2008 in relation to the same month of 2007, the reduction was mostly due to

the different mix of

APIs in the pharmaceutical segment (down by 31.2%). In the meantime, medical

devices output was

22.6% lower, due to fewer exports. Overall, for the first 10 months of 2008, the

biomedical

manufacturing cluster was 11.5% down on the same period of 2007.

September 2008 figures were more positive, with the output expanding by 38.2%. The

pharmaceutical

sector was, however, most responsible for the development, recording a 44.4%

increase, while the

medical technology segment shrank by 12.0%. In the first nine months of the year,

cumulative output was

9.8% lower than in the same period of 2007.

At the end of 2007, biomedical sciences manufacturing output was worth around

US$16.5bn, up from

US$4.4bn in 2000. Value-added business accounted for 24.4% of the total

manufacturing value-add. At

the same time, over 11,500 people in Singapore were employed in the biomedical

science sector,

primarily in one of the 100 core life sciences companies, including 20 within the

contract research

organisation (CRO) sector.


Page 53


In April 2009, official figures released by the Singapore Economic Development Board

(EDB) showed

that manufacturing output rose by 24.7% on a seasonally-adjusted month-on-month (m-

o-m) basis. On a

y-o-y basis, the output fell by just 0.5%, due to recovering demand for biomedical and

transport

engineering products that offset the falling production of electronic goods. Biomedical

output rose by

68.4% y-o-y, with pharmaceuticals also posting a 77.9% increase in production,

supported by a wider

variety of APIs manufactured and a rise in the volume of currently produced medicines.

In March 2009,

biomedical output fell by 54.8%, dragged down by a 57.3% fall in pharmaceutical

production. EDB

explained this performance as a result of the change in the API mix.

In November 2009, Singapore’s EDB reported that overall production fell by 8.2% y-o-y

and 3.6% m-om. The EDB’s monthly report indicates that a 52.5% drop in

pharmaceutical production was the primary

reason for the overall decline. The data also show that industrial production, excluding

the biomedicals

industry, was up 7.4% y-o-y. Previously, in October 2009, the country registered a 3.6%

y-o-y increase in

manufacturing output. However, the output is lower than economists’ expectations (of a

6.3% y-o-y

increase), due to a slowdown in the pharmaceutical sector. In the same period, the

country recorded a

mere 0.8% y-o-y increase in biomedical manufacturing output, although closures for

cleaning between

production cycles were partly to blame. Pharmaceutical production, which makes up

about 20% of the

manufacturing industry, registered a 15.2% drop in September 2009, compared with

107.8% growth in

August 2009.

Foreign Industry

Multinationals with a manufacturing presence in Singapore, including Sanofi-Aventis,

GSK, Merck &

Co, Novartis, Pfizer and Schering-Plough, are active in the production of APIs. The

companies have

benefited from and been encouraged by an educated and relatively low-paid skilled

workforce (boosted

by government support for the training of clinical research personnel), tax incentives

(such as the

lowering of the corporate tax rate from 22%, to 20%, in 2005, and the more recent

reduction from 18% to

17%), and a well-established framework for IP.

In the 2002-2005 period, major pharmaceutical companies spent over US$500mn on

building

manufacturing facilities in Singapore. Moreover, the government aims to have at least

10 multinationals

with local production capabilities by 2010. Apart from multinational investment and

other collaborative

research activity, smaller foreign drug companies also continue to invest in the

country’s pharmaceutical

sector, boosting its longer-term potential. Others are using Singapore as a clinical trials

base, indicating

the strength of the country’s regulatory and operational environments.


Page 54


Foreign Company Activities

!

In February 2010, Swiss global healthcare company Roche announced plans to spend

CHF100mn

(US$95.2mn) on the establishment of a new research facility in Singapore as part of a

public-private

partnership programme. The research facility, which will initially appoint 30 scientists, is

to be used

to research disease biology and develop new, personalised treatments. In November

2009, Roche

officially opened its US$500mn biologics manufacturing plant in Singapore’s Tuas

industrial zone.

Of the two manufacturing plants in Tuas, the company has dedicated one plant to the

development of

two cancer drugs, Avastin (bevacizumab) and Herceptin (trastuzumab), while the other

will develop

Lucentis (ranibizumab), used for the treatment of patients with age-related macular

degeneration. The

company is planning to induct another 100 skilled workers to its existing 330 employees

in the

Singapore facility by end-2010.

!

In the same month, Singapore health authorities authorised the use of avian influenza

vaccine,

Panvax, to treat H1N1 swine flu virus in youths aged between 10 and 18. The vaccine is

developed by

Australia-based CSL and was earlier approved only for those above the age of 18, after

a two-yearold boy lost his life to the virus. The authorities recommended that a single-

dose 0.5ml (15mcg)

vaccine, effective in two weeks, be used.

!

In November 2009, Singapore became the first country outside North America and

Europe to approve

a new biologic treatment for psoriasis. President of the Psoriasis Association of

Singapore and

Consultant Dermatologist at the National Skin Center welcomed the news, stating that

the product,

ustekinumab, provides an additional option for those affected by the condition.

According to official

figures, psoriasis affects around 2,000 people in Singapore, on an annual basis.

!

In September 2009, Lonza sold its Singapore manufacturing facility to Genentech for

US$360mn. A

total of US$290mn was paid up-front, while the remainder will be given in the form of

milestone

payments. Approximately 230 employees will be transferred from Lonza to Genentech.

The plant will

produce the anticancer agent Avastin (bevacizumab).

!

In June 2009, GSK inaugurated its new SGD600mn manufacturing plant in Singapore, as

part of its

10-year strategic programme for the country. The factory, which is due to become fully

operational in

2011, will produce pneumococcal vaccines. Other components of the programme

include the

SGD30mn scholarships in the area of green chemistry and public health policy.

Previously, GSK

provided some SGD50mn in endowment funding.

!

In January 2009, US-based Tragara Pharmaceuticals announced that it was granted an

exclusive

worldwide licence for the development and commercialisation of Singapore’s S*BIO’s

novel multikinase inhibitor. The SB1317 drug candidate is originally to be focused on

the treatment of

haematologic malignancies.


Page 55


!

In January 2009, US drug major Abbott Laboratories announced the opening of a new

pharmaceutical analytical research laboratory in Singapore’s Biopolis research park. The

research

laboratory will conduct studies on APIs and novel formulations in order to support global

regulatory

requirements for new pharmaceutical products. Around the same time, Abbott also

opened a new

52,000m2 nutrition facility – costing US$300mn – at Tuas Biomedical Park 2 in

Singapore. Abbott is,

in the meantime, planning to make Singapore its regional development centre for

pharmaceuticals,

diagnostics and nutrition operations, planning to invest an additional US$20mn into its

Biopolis

operations.

Traditional Chinese Medicine

Sales of powdered, single-drug traditional Chinese medicines (TCMs) in Singapore are

set for a boost

after many firms based in China – the main source of liquid, combined-drug TCMs –

decided in January

2008 that the Singaporean market was too small for continued exports. Patients are

unhappy with the

situation, but practitioners of the ancient art believe it gives them more flexibility. Due

to the extra effort

put into assembling preparations, costs of individual treatments will now rise, boosting

the value of the

overall market. BMI believes that this in turn may attract Chinese manufacturers back to

the city-state.

In order to sell Chinese-made TCMs in Singapore, a product must be accompanied by a

free sale

certificate from China’s State Food and Drug Administration (SFDA). A free sale

certificate is issued by

a national health authority for a specific product, stating that the product is for ‘free

sale’ within the

country of origin. This does not necessarily mean that the product is licensed for

placement on the market

in the country of origin, but that the product is of a quality suitable for being placed on

the market. In

other words, a free sale certificate does not guarantee that the product in question is

marketed in the

country of origin.

While this extra bureaucracy is not inordinately expensive, many Chinese TCM

manufacturers cannot

recoup the cost from Singapore’s affluent, but extremely limited market. Local and

Malaysian producers

are attempting to cover the shortfall in supply, but alternative preparations – such as

powdered, singledrug TCMs – are being used instead. Some consumers are not keen on

the replacements, claiming that

they need to ingest much more water to ‘push’ the mixture down.

Chung Hwa Medical Institution is one of the leading players in the Singaporean TCM

market. It is set

to benefit from the recent shortage of Chinese liquid, combined-drug TCMs and is

ramping up production

of its powdered, single-drug preparations. BMI notes that this tactic is paying off. As a

result of increased

demand, the price of a typical Chung Hwa Medical Institution product has increased

50%, from SGD2

(US$1.40) to SGD3 (US$2.09). We forecast the firm to post sales of approximately

US$1.2mn this

financial year, which is an impressive rise from just a few years ago.


Page 56


Company Profiles

Indigenous Manufacturers

Haw Par

One of the fastest-growing global pharmaceutical companies.

!

Lack of original drugs in its portfolio.

No presence in the generics sector.

!

The Singaporean government aims to increase the country’s market share in the Asian

healthcare market from less than 1% to 3% by 2012.

!

Tax breaks offered to drug makers in exchange for the increase in manufacturing

capacity.

!

Expected launch of several new drugs, including cholesterol-lowering medication

Vytorin, anti-cancer and HIV/AIDS drugs, would enable it to capture more market share

in the region

!

Strong competition in Singapore from a number of leading multinational companies that

are expanding their local presence.

!

Recent government proposals to reduce price levels in the country and to encourage

parallel imports.

!

Overview

One of the leading global pharmaceutical companies.

!

Threats

Presence in the OTC, TCM and vaccine sectors.

!

Opportunities

Strong product portfolio.

!

Weaknesses

!

!

Strengths

Economic uncertainty negatively impacting sales of consumer healthcare and OTC

products.

Haw Par Corporation, which was established in 1969, produces a variety of products,

including

dietary supplements and pharmaceuticals. The group’s healthcare products are

manufactured

and marketed under the Tiger, Kwan Loong and Drug Houses of Australia brands. In

2007, the

group divested of its generic business.

In 2005, a Haw Par subsidiary acquired a 20.5% interest in Hong Kong-based Hua Han

BioPharmaceuticals. The purchase price is estimated at SGD35mn, or US$21.08mn,

allowing the

Singapore company to access a strong export potential of the Hong Kong market. Hua

Han Bio

manufactures traditional Chinese medicines, and is focussed on products for women

and the

elderly.

Recent Activities

In September 2006, Indian generics firm Strides Arcolab announced that it was to

acquire Haw

Par unit Drug Houses of Australia (DHA). The value of the deal – which will see local

conglomerate Haw Par exit the generics sector – is valued at US$13mn. DHA operates a

manufacturing unit in Jurong, and also markets its products in Malaysia, Hong Kong and

Australia.

Haw Par’s decision to offload its generics arm is part of a new strategy for the

healthcare

business. In common with the government’s objective of creating a major global biotech

hub, Haw

Par has acquired interests in the nascent sector in an attempt to move up the value

chain.



Drug Houses of Australia (Asia) was a wholly owned subsidiary of Haw Par Healthcare.

The

company is one of the leading generic manufacturers in Singapore. It also works in the

field of

agency representation for OTC and prescription pharmaceuticals. Drug Houses of

Australia’s

facility in Jurong manufactures tablets (plain and coated), capsules, creams, granules

and

powders, as well as liquid preparations including syrups, suspensions, emulsions and

solutions.

In 2004, the majority of its revenue was generated in the domestic sector, similar to the

2003

figures of 65%, while exports accounted for about 23% of total trade. The unit presently

exports to

leading Asian economic centres such as Malaysia, Hong Kong and Australia, as well as

to

smaller, developing global markets.

Product Portfolio

The company’s ethical pharmaceuticals are present in a large number of therapeutic

areas,

including anti-virals, anti-fungals, diuretics and anti-hypertensives. Haw Par’s main

strength lies in

the generic segment, although this was divested in 2007, as well as OTC products.

Haw Par is expecting to launch several new drugs, including cholesterol-lowering

medication

Vytorin (ezetimibe/simvastatin), anticancer and HIV/AIDS drugs. The products would

enable the

company to capture higher market shares in the region.

In 2005, Haw Par Healthcare introduced Tiger Balm Neck & Shoulder Rub on the

domestic

market. The rub, which is formulated from the proven blend of Tiger Balm ingredients, is

offered

as an aqueous-based cream in its new format. The product is exported to a number of

markets

globally, including the US.

Financial

In 2005, the company posted sales of SGD120.0mn (US$75.96mn). Healthcare

operations

Performance

accounted for SGD76.2mn. Sales for 2006 fell to SGD119.6mn.

For FY07, the company reported SGD119.3mn (US$75.0mn) in group turnover, despite

the

strengthening of local currency and the divestment of generic operations. Healthcare

accounted

for 59.1% of the total turnover, down from 63.7% in 2006. In terms of profit, healthcare

represented just under 12% of the total profit for the year, down from 21.5% in 2006.

Leading Products

Cardopar

Tipidin

Dhacopan (hyocine)

Tiger Balm

!

Haw Par Corporation

401 Commonwealth Drive 03-03

Haw Par Technocentre

Singapore 149598

!

Address

Tel: +65 6337 9102

!

Fax: +65 6336 9232

!

www.hawpar.com


Page 58


SciGen

!

Lack of innovative R&D.

Focus on few product areas.

Traditional preference for branded drugs.

!

Rising regional demand for biotechnology.

!

Government support for the biotech sector.

!

Continued encouragement of the generics sector.

!

Strong to reduce price levels in the country and to encourage parallel imports.

!

Rising regional competition in the biotechnology field.

!

Overview

Expansion of manufacturing facilities.

!

Threats

Focus on biogenerics and biotechnology.

!

Opportunities

Global licensing agreements.

!

Weaknesses

!

!

Strengths

Government encouragement of foreign industry.

Singapore-based SciGen was established in 1988 and is listed on the Australian stock

exchange.

The company, which has expanded in recent months, specialises in co-developing and

marketing

biopharmaceutical products for human health. SciGen has a number of licence

agreements

across the Asia Pacific region as well as sales and representative offices in Australia, the

US,

South Korea, Vietnam, Hong Kong and the Philippines.

The company maintains partnerships with firms in China (a joint venture manufacturing

facility for

biopharmaceuticals), India, Indonesia, Israel, Poland, Austria and the Netherlands. The

partners

in the Chinese joint venture are China’s Hefei Life Science & Technology Park (25%) and

Polish

drugmaker Bioton (originally 24%, which was increased to 45% in 2005). Bioton also

owns over

90% of SciGen.

Recent Activities

In July 2009, SciGen and Bioton signed an exclusive distribution deal with Bayer

Schering AG, to

market insulin. SciGen and Bioton also concluded a profit-sharing agreement regarding

this

insulin franchise, which is expected to be more favourable for the former than the China

insulin

distribution agreement.

In June 2006, SciGen revealed its plans to build a US$30mn R&D facility in Israel, which

will also

manufacture biotech products utilising knowledge acquired from Israeli drugmaker

Savient

Pharmaceuticals. SciGen has also recently agreed to acquire Indian drugmaker Shreya

Biotech.

Also in June 2006, SciGen secured the rights to manufacture, distribute and market

GCSF, used

to treat the symptoms of chemotherapy, and EPO, used to treat kidney disease, through

a

technology transfer agreement with Intas Pharmaceutical. A month before, the

company signed

an exclusive global agreement with ACL Biopharm, Intas R&D partner, for the bulk

supply of

GCSF and EPO.

Product Portfolio

SciGen focuses on endocrinology and immunology, with products including vaccines and

therapeutics. Most of its portfolio is comprised of biogenerics and products derived

through

biotechnology. Currently, four of its products are made with the technology derived

from genetic


Page 59


engineering of E. coli bacteria (i.e. mammalian cell CHO cells), and one drug-delivery

device

(SciTojet2). Sci-B-Vac and SciFeron are sold globally through licence agreements.

In May 2008, the company secured the first of three approvals of different formulation

of its

Recombinant Human Insulin in China. The insulin, manufactured by Bioton, is presently

distributed by Hefei Life Sciences (HSLT), SciGen’s Chinese distributor. SciGen is

targeting the

US$500mn insulin market in China, which is growing at an annual rate of over 25%.

In March 2009, the company secured the final marketing authorisation for the sales and

distribution of its recombinant human insulin (SciLin) in China. The distribution – on a

seven-year

basis - will be undertaken by SciGen’s local distributor Shenzhen Meheco and Hefei Life

Sciences

Technology (HLST). SciGen is targeting a growing market for diabetes treatment in

China, which

is expected to be worth around US$1bn by 2010. The company is expecting to generate

US$17mn in SciLin’s sales over the 2009-2012 period.

Financial

In H109, revenue was US$4.5bn, down by 25% on the same period of 2008. Net loss

rose by

Performance

66% in relation to H108.

In 2008, revenues topped US$13.9mn, up by 67% y-o-y. Net loss was US$8.5mn (up

from

US$4mn in 2007), incurred due to infrastructure expansion. In Q408, R&D expenditure

totalled

US$0.158mn.

In 2007, revenues were US$8.4mn, up from US$6.1mn in 2006. Australia represents the

largest

single market, generating revenues of US$3.7mn, followed by India (US$1.5mn) and

Singapore

(US$1.3mn).

Leading Products

SciFeron (interferon)

SciTropin (recombinant human growth hormone)

Sci-B-Vac (third-generation recombinant hep B vaccine)

SciLin (second-generation recombinant human insulin)

!

SciGen

Gateway East

152 Beach Road # 26-05/08

Singapore 189721

!

Tel: +65 6779 6638

!

Address

www.scigenltd.com


Page 60


MerLion Pharmaceuticals

!

Strong regional competition.

Limited product portfolio.

Small domestic market size, which is also limited in growth potential.

!


!


!

Increased awareness of new disease strains.

!


!

Rising prominence of India and China as FDI destinations.

!

Overview

Strategic partnerships with multinational companies.

!

Threats

International presence.

!

Opportunities

Focus on pipeline development.

!

Weaknesses

!

!

Strengths

Adverse economic conditions having a negative impact on pharma exports and usage of

healthcare services.

MerLion Pharmaceuticals is a privately held international drug-discovery and

development

company focused on the clinical development of its portfolio of novel antibiotics and the

discovery

of new drug candidates from the world’s most diverse natural products sample

collection. The

company boasts two novel drug candidates approaching clinical development, in

addition to a

substantial preclinical range of candidates.

MerLion has partnerships with a number of international companies, including US Abbott

Laboratories, Japanese Astellas Pharma and Sankyo, German Boehringer Ingelheim, and

Swiss

Novartis Institute for Tropical Diseases, among others.

By the end of 2006, MerLion raised the targeted US$30mn of financing, with investors

including

SBI Bio Life Science Investment, Commerce Technology Ventures, Zurcher

Kantonalbank and

Lacuna SICAV Lacuna Apo Biotech Fund.

Recent Activities

In 2006, MerLion Pharmaceuticals acquired two European biotech companies,

Germany’s

Combinature and Switzerland’s Athelas, with the aim of boosting its early stage pipeline

and

innovative drug-discovery technology respectively. Combinature has a stable of anti-

infectives in

preclinical development. MerLion has chosen to base its pipeline on anti-infectives –

antibacterials and anti-fungals.

In March 2007, the company signed a two-year drug discovery and licensing agreement

with

Japanese subsidiary of US Merck & Co, Banyu. MerLion and Banyu are to work on

identifying

new drug candidates from the Singapore company’s natural product sample collection

in the

areas of oncology and metabolic disease. In addition, MerLion also extended its four-

year

infectious disease targets agreement with Merck.

In July 2008, MerLion’s specific gene based industrial biotech assets in Germany were

acquired

by German BRAIN AG. The assets include microbial strains, a substantial gene collection

(ToolBox) encoding modifying enzymes and a collection of cosmid libraries. The deal

signifies the

extent of MerLion’s expertise in the field.


Page 61


In November 2009, MerLion’s IND application to the FDA was approved, with the

company to

initiate Phase I clinical trials of finafloxacin in the US. The product candidate has

antibacterial

activity in acidic conditions, which sets it apart from other marketed finafloxacins.

In December 2009, MerLion and US Chaperon Technologies Inc reported that their joint

evaluation of a new treatment for resistant bacterial infections is underway, using a

novel

approach developed by the latter. The collaboration is also focusing on finafloxacin.

!

MerLion

1 Science Park Road

05-01 The Capricorn

Singapore Science Park II

Singapore 117528

!

Address

Tel: +65 6829 5600

!

Fax: +65 6829 5601

!

www.merlionpharma.com


Page 62


Veredus Laboratories

!

Strong regional competition.

Limited product portfolio.

!



!

Increased awareness of new disease strains.

!

Rising demand for diagnostics detecting presence of various flu viruses.

!


!

Adverse economic conditions having a negative impact on pharma exports and usage of

healthcare services.

!

Overview

International presence and local collaborations.

!

Threats

Pipeline containing a number of DNA-based tests for infectious diseases.

!

Opportunities

Focus on diagnostic tools.

!

Weaknesses

!

!

Strengths

Rising prominence of India and China as FDI destinations.

Veredus is a privately-owned life sciences (molecular diagnostics) company based in

Singapore,

established in 2003. The firm is engaged in the development, commercialisation and

manufacture

of diagnostic assays for diseases, which are marketed globally. Its products comply with

international standards.

In July 2006, Veredus and the US Navy’s Seventh Fleet jointly created the world’s first

ship-based

avian influenza testing laboratory. The laboratory will use Veredus’ avian flu H5N1 kit,

which

detects the pathogen in humans or animals. The tool was tested over the last few years

in

Indonesia, Malaysia and Vietnam, recording excellent results.

Recent Activities

In April 2009, the company updated its VereFlu diagnostics test, which can now detect

the variant

strain of swine flu (H1N1 virus) in as little as two hours. The outbreak of swine flu that

began in

Mexico has quickly led to public health alerts around the world. Veredus launched its

VereFlu and

VereID Biosystem tests, which are based on the STMicroelectronics lab-on-chip

platforms in

2008.

Product Portfolio

Veredus is focused on the field of diagnostic kits and tools. Its most prominent product

is the

avian flu testing kit, developed in co-operation with STMicroeletronics. The kit uses

proprietary

nucleic acid diagnostic primers developed by A*STAR’s Genome Institute of Singapore

(GIS).

Two other tools developed by Veredus are a dengue fever diagnostic kit available since

2003 and

a malaria testing kit. In 2006, the firm was hoping to sell 0.5mn malaria testing kits,

which would

generate US$3.5mn in revenues. The company is exploiting the lucrative market, with

dengue

fever and malaria annually affecting some 50mn and 300-500mn people respectively in

over 100

countries.

Address

!

Veredus Laboratories

Science Park Drive

03-02A The Curie

Singapore Science Park 1


Page 63


Singapore 118258

!

Tel: +65 6776 3633

!

Fax: +65 6776 6636

!

www.vereduslabs.com


Page 64


Leading Multinationals

Pfizer

!

Mandatory use of generic drug in public hospitals restricts products without a generic

equivalent to the private sector.

Strong multinational competition from a number of leading global companies that are

expanding their presence in Singapore.

!

Strong intellectual property protection laws and highly skilled labour.

Strong government support, designed to encourage foreign manufacturers to invest in

the pharmaceutical sector.

!

A presence in local discovery work drawing on skilled, low-cost expertise.

!

Government policies favouring both local market positioning and export-orientated

research and manufacturing activity.

!

Recent government proposals to reduce price levels and encourage parallel imports.

!

Pending patent expirations exposing some of Pfizer’s products to generic competition.

!

Overview

Strong product portfolio, with core product groups including cardiovascular,

neuroscience, infectious diseases, arthritis/pain, urology, ophthalmology and oncology.

!

Threats

One of leading investors in the country’s pharmaceutical sector.

!

Opportunities

Strong market presence in Singapore.

!

Weaknesses

!

!

Strengths

Increasing local and regional competition.

Pfizer Singapore was incorporated as a private limited company in June 1964. The

company has

a strong local presence, with over 300 personnel and a strong portfolio covering

therapeutic areas

including cardiovascular, neuroscience, infectious diseases, urology, ophthalmology and

oncology. To date, the company has invested approximately US$700mn in the country’s

pharmaceutical sector. In 2008, the company inaugurated its local clinical research unit,

which

doubled its capacity to conduct Phase I trials in the country.

In 2004, Pfizer Asia Pacific, a wholly owned subsidiary of Pfizer, established a

SGD600mn

(US$350mn) multi-purpose manufacturing facility in Singapore. This investment was

Pfizer’s first

major API plant in Asia. Pfizer also set up another US$600mn plant designed to produce

compounds for epilepsy and pain. The US FDA has certified both of Pfizer’s facilities in

Singapore. The company also operates a clinical trials unit in the country, in addition to

sales and

marketing arms.

Product Portfolio

Pfizer Singapore markets a number of leading prescription medicines (including the

leading

erectile dysfunction (ED) remedy Viagra) and many of the world’s best-known consumer

brands.

The company’s key products include Celebrex, Detrol (detrusitol), Dalacin C (dalacin),

Diflucan

(fluconazole), Lipitor, Listerine (mouth wash), Neurontin (gabapentin), Norvasc

(amlodipine),

Unasyn (ampicillin/sulbactam), Viagra, Xalatan (latanoprost ohthalmic), Zithromax

(azythromycin)

and Zoloft. In 2004, Pfizer discontinued sales and marketing of COX-2 inhibitor Bextra

(valdecoxib), due to safety concerns.

Key Competitors

Given its current size, local experience and financial capabilities, Pfizer is extremely well

placed to

capitalise on the opportunities presented by Singapore’s pharmaceutical and healthcare

markets.


Page 65


The main threat to its future performance will come from other multinationals, rather

than from

government policies regarding pricing and reimbursement.

Regional Operations

Being the largest global pharmaceutical company, Pfizer is strongly present in the Asian

market,

especially Japan. The company operates both production and sales and marketing

operations

across the region. The company is also highly visible in both manufacturing and R&D

fields. Pfizer

announced in April 2010 that it is planning to increase the number of its clinical trials in

Singapore

by 10% in 2010 from 23 trials conducted in 2009. Pfizer conducts its clinical trials in

Singapore’s

Raffles hospital.

Leading Products

Celebrex (celecoxib)

Lipitor (atorvastatin)

Viagra (sildenafil)

Zoloft (sertraline)

Stutent (sunitinib)

!

Pfizer (Singapore) Pte Limited.

152 Beach Road

29 Gateway East

Singapore 189721

!

Tel: +65 6311 3688

!

Fax: +65 6311 3699

!

Address

www.pfizer.com.sg


Page 66


Novartis

Has a developed generics arm, thus being well placed to take advantage of future

generic-sector growth.

!

Mandatory use of generics in public hospitals restricts products without a generic


Strong multinational competition from a number of leading global companies that are

expanding their presence in Singapore.

!


!



!

A presence in local discovery work drawing on skilled, low-cost expertise.

!

Government policies favouring both local market positioning and export-orientated

research and manufacturing activity.

!

Involvement in the development of avian flu preventative medicines.

!

Rising demand for treatment of viral diseases, such as dengue fever.

!

Recent government proposals to reduce price levels and to encourage parallel imports.

!

Overview

One of the fastest-growing global pharmaceutical companies, ranked fifth-largest in the

world.

!

Threats

A strong product portfolio, including transplantation and immunology, oncology,

cardiovascular diseases, central nervous system (CNS) disorders, endocrine,

gastrointestinal, dermatology and ophthalmic treatments.

!

Opportunities

Well-established market presence in Singapore.

!

Weaknesses

!

!

Strengths

Increasing local and regional competition.

Novartis Singapore was created in 1997 from the merger of Sandoz Singapore, entering

in 1986,

and Ciba-Geigy Singapore, established in 1971. Novartis has invested heavily in

Singapore in

recent years and has already built an R&D centre in the country, making it the first such

company

to do so in the Asia-Pacific region outside of Japan. The company has also invested in

two more

units in the country, a tropical diseases centre (the Novartis Institute specialises in

dengue fever

research, and other life-threatening diseases), and a branch of its eye-care business,

illustrating

its commitment not only to Singapore, but to the region as a whole.

Recent Activities

In March 2009, Novartis announced that it was hoping to start testing dengue fever

therapeutics

on humans by 2011. The Novartis Institute for Tropical Diseases, created in partnership

with the

government of Singapore, had originally been hoping to start human trials in 2008, but

the

programme was discontinued due to safety concerns. In the meantime, Singapore’s

authorities

continue to meet with the WHO in order to discuss measures to detect and combat

dengue.

During Q307, the company revealed that it would build a US$700mn cell culture plant in

Singapore to support its growing biopharmaceutical business. Completion of

construction is

expected in 2012. Simultaneously, Novartis announced that construction of its

SGD310mn

(US$180mn) tablet production facility in Singapore was completed. The facility is

designed to

produce tablets for the global market, and is expected to employ more than 150

workers. The

plant will focus on the production of bulk active ingredients of the company’s new and

existing

products, including the anti-cancer agent Gleevec (imatinib), the anti-hypertensive

Diovan

(valsartan), and the irritable bowel syndrome drug Zelnorm (tegaserod).


Page 67


Product Portfolio

The company’s pharmaceutical products cover a broad range of diseases, including

transplantation and immunology, oncology, cardiovascular diseases, CNS disorders,

endocrine,

gastrointestinal, dermatology and ophthalmic conditions. The company’s core products

and

services include pharmaceuticals, nutrition, eye care and animal health.

Novartis has recently entered the first stage of human trials for what could be the

world’s first

vaccine for Alzheimer’s disease. The condition affects about 14mn people each year,

with about

7,000 cases diagnosed annually in Singapore. Current drugs can only slow the

progression of the

disease, but depending on the success of the trials, the new vaccine could hit the

market in the

next five to seven years.

Regional Operations

The company will continue to capitalise on its solid base, supported by strong

encouragement

from the government’s initiatives and favourable economic and infrastructural

conditions in the

country. Novartis has a particular commercial opportunity in the generics sector, which

will be

boosted by cost-containment measures in the medium to longer term. Additionally,

Novartis

remains strongly committed to the South East Asian market.

Financial

In 2004, Novartis reported sales of US$23mn in Singapore, representing a 15% y-o-y

increase on

Performance

2003 sales of US$20mn. In 2005, sales rose to US$31mn, with Novartis retaining its

position in

th

the top 10 companies in the country (7 place as of Q406). Novatis’ global sales topped

US$44bn

in 2009, up by 7% y-o-y, as measured in US dollars.

Leading Products

Glivec (imatinib)

Lamisil (terbinafine)

Zelmac (tegaserod)

!

Novartis (Singapore) Pte Ltd

Pharmaceutical Sector

10 Hoe Chiang Road

09-05/06 Keppel Towers

Singapore 089315

!

Address

Tel: +65 6323 3750

!

Fax: +65 6323 4335

!

www.novartis.com


Page 68


GlaxoSmithKline

Production of the influenza drug Relenza (zanamivir) which is also used as a

preventative measure against avian flu.

!



Strong multinational competition from a number of companies that are expanding their

presence in Singapore.

!


!



!

Development of new vaccine plant in Singapore.

!


parallel imports.

!

Government not supportive of a national programme of cervical cancer vaccinations.

!

Increasing competition from other multinational companies establishing operations in

Singapore.

!

Overview

Long-established local manufacturing presence.

!

Threats


!

Opportunities

Strong OTC product portfolio.

!

Weaknesses

!

!

Strengths

Loss of patent protection on some of its leading medicines.

GlaxoSmithKline (GSK) has been present in Singapore longer than any other

multinational, with

predecessor firms operating locally since 1919. The company employs around 1,000

staff, with

some two-thirds of them in manufacturing. GSK produces nine active ingredients in the

country.

To June 2009, the company invested around SGD1.5bn into Singapore.

Since the 1970s, the company’s investment in the country has topped SGD$1bn

(US$628mn),

largely at the production site in the Tuas region. The plant was first used for the

production of

ranitidine (the active ingredient in the ulcer drug Zantac), with the manufacture since

extended to

APIs for other medicines, including asthma medicines Seretide and Flixotide (fluticasone

propionate), and allergic rhinitis drug Flixonase (fluticasone propionate). The facility

may also

soon produce the active ingredient for Relenza.

Activities

In September 2009, Singapore’s Ministry of Health obtained 1mn doses of H1N1 vaccine

from

GSK. The ministry said it would distribute the vaccines on a voluntary basis before the

end of

2009. The ministry added that the vaccinations would be provided at a price of between

SGD22

(US$15.60) and SGD38 (US$26.90).

In June 2009, GSK inaugurated its new SGD600mn manufacturing plant in Singapore, as

part of

its 10-year strategic programme for the country. The site is charged with the production

of

vaccines, and will employ some 200 staff. Around the same time, the company reported

that its

swine flu vaccine should be available from September 2009, having already received

orders for

150mn doses. GSK is also increasing production of swine flu treatment Relenza, using a

simplified manufacturing process that paves the way for a capacity expansion of

another 100mn

packs.


Page 69


In March 2009, GSK reduced the price of its cervical cancer vaccine Cervarix by nearly

30% in

Singapore, to around US$450 for a regime of three injections. It is expected that the

clinics will –

in turn – lower the patient price they charge for injections. A 2008 survey published

around the

same time showed that most women were not getting vaccinated due to high price of

the

treatment, although official comments – which have recently thrown doubt over the

vaccine’s

effectiveness – will also slow the uptake.

In November 2005, GSK revealed the creation of a SGD115mn (US$67.5mn) pilot R&D

facility in

Singapore. The centre is designed to improve drug manufacturing technologies, as well

as

develop products for clinical research trials. GSK is one of the largest pharmaceutical

investors in

Singapore, with more than SGD1bn (US$586.93mn) in fixed-asset investments, as well

as some

600 staff employed in manufacturing. The facility opened in March 2008. At the

inauguration, the

company hoped the facility could reduce the time it takes to commercialise a compound

from 10

years to eight years.

In 2004, GSK invested SGD190mn (US$122mn) at Singapore’s state-of-the-art

biomedical centre

Biopolis, where it would focus on neurodegenerative diseases. In March 2007, GSK

doubled the

size of its presence at Biopolis by completing the construction of a US$20mn laboratory.

Product Portfolio

GSK deals in both ethical and consumer healthcare pharmaceuticals. GSK’s main OTC

brands

include Horlicks, Ribena, Panadol, Scotts Emulsion, Menara Lien Hoe Eye-Mo, Eno, Oxy

and

Aquafresh. Its leading prescription medicines include ED remedy Levitra, which

competes with

Pfizer’s Viagra (sildenafil citrate).

Key Competitors

GSK will experience strong competition from other local and regional players, including

multinationals set on expanding their presence in Singapore. However, the company is

well

placed to remain one of the leaders in the field, given its strong manufacturing base, as

well as its

R&D commitment to Singapore.

Regional Operations

As one of the most prominent global pharmaceutical companies, GSK is highly visible in

the Asian

region, especially in the Japanese market. GSK is involved in both direct manufacturing

and

importing of pharmaceutical and related products, exploiting the rising demand for

healthcare and

healthcare services in the region. GSK has offices and various production facilities in

Australia,

New Zealand, China, Malaysia, Taiwan, Thailand, the Philippines, Singapore and

Indonesia.

Regionally, GSK is particularly active in the field of consumer healthcare and vaccines.

The

company also sells a range of other ethical pharmaceutical products, such as

antibiotics, antiasthmatics, anti-diabetics, antivirals, anti-migraine treatments, and

vaccines for hepatitis A and B,

varicella, meningitis, polio and diphtheria.

Leading Products

Panadol (paracetamol)

Seretide (salmeterol)

Levitra (vardenafil)

Relenza (zanamivir)

Address

!

GlaxoSmithKline

150 Beach Road

22-00 Gateway West


Page 70


189720 Singapore

!

Tel: +65 6232 8338

!

Fax: +65 6291 6815

!

www.gsk.com/worldwide


Page 71


Sanofi-Aventis

One of the fastest-growing global pharmaceutical companies.

!

Brand names affected by mandatory use of generics in public hospitals.



!


!



!

Rising regional demand for biotech products.

!

Rising demand for treatment of viral diseases, such as dengue fever, across the whole

of Asia Pacific.

!


parallel imports.

!

Overview


!

Threats

Presence in the generics and vaccine sectors.

!

Opportunities


!

Weaknesses

!

!

Strengths

Competition from other multinationals with operations in Singapore.

Sanofi-Aventis operates in Singapore through its local subsidiary (Sanofi-Synthelabo

Singapore

Pte). The French major is present through local manufacturing and distribution

businesses, as

well as through its vaccines arm. Sanofi’s local clinical trials unit, staffed by around 30

employees,

is engaged in studies throughout the region.

Recent Activities

In Q109, the vaccines arm of French drugmaker Sanofi-Aventis, Sanofi Pasteur,

commenced

clinical trials of its investigational dengue vaccine in Singapore, as well as Vietnam. The

drug

(tetraelent) is already being tested in Thailand and the Philippines. In Singapore, the

company is

collaborating with the Communicable Disease Center. The vaccine is targeting an

increasing

number of dengue cases across the whole of Asia Pacific.

Product Portfolio

Sanofi-Aventis’s core therapeutic areas include cardiovascular/thrombosis, oncology,

diabetes,

CNS, internal medicines products, as well as vaccines. It is active in the generics

market, through

its Winthrop business. In OTCs, Sanofi-Aventis is active in analgesics, gastro-

enterological,

respiratory, dermo-pharmaceutical and oral/dental health products. Overall, Sanofi-

Aventis’s

portfolio in Singapore numbers around 70 products.

Key Competitors

Sanofi-Aventis’s branded market revenues will increasingly be challenged by other

multinational

companies vying to expand their presence in Singapore. On a positive note, the

continued

encouragement of the generics sector will provide Sanofi-Aventis with a significant

commercial

opportunity.

Regional Operations

Sanofi-Aventis boasts a considerable regional market presence. Its Japanese operations

include

a number of licensing deals with local companies. Given the epidemiological profile of

the region,

Sanofi-Aventis is also highly present through vaccines.


Page 72


Leading Products

Plavix (clopidogrel)

Taxotere (docetaxel)

Stilnox (zolpidem)

!

Sanofi-Synthelabo Singapore Pte Ltd

6, Raffles Quay 18-00

Singapore 048580

!

Tel: +65 6226 3836

!

Fax: +65 6334 2539

!

Address

www.sanofi-aventis.com.sg


Page 73


Merck & Co

!





Negative press following the Vioxx (rofecoxib) withdrawal.

!


!

Strong government support designed to encourage foreign manufacturers to invest in

the

pharmaceutical sector.

!

Expansion of production portfolio in Singapore through a second collaboration with

Schering-Plough, as well as their recent reverse merger.

!

Favourable government policies, encouraging both local market positioning and

exportorientated research and manufacturing activity.

!


parallel imports.

!

Increasing competition from other multinational companies establishing operations in

Singapore.

!

Overview


!

Threats

One of leading investors in the country’s pharmaceutical sector.

!

Opportunities

Well-established market presence in Singapore, with two local manufacturing units.

!

Weaknesses

!

!

Strengths

Pending patent expirations exposing some of the company’s products to generic

competition.

Merck Sharp & Dohme (MSD Singapore) is a wholly-owned subsidiary of US drug major

Merck &

Co. Merck & Co is active in the Asian market, mostly through its local Merck Sharp &

Dohme

subsidiaries. The company is one of the main pharmaceutical investors in Singapore,

having so

far ploughed around US$500mn into local operations.

The company’s plant at Singapore Tuas Biomedical Park opened in 2001, and

manufactures APIs

used for the treatment of asthma and arthritis. The facility is a multi-product operation

capable of

producing various APIs such as etoricoxib and montelukast sodium. The company’s

pharmaceutical formulation plant, which started operations in 2004 and employs around

100 staff,

produces tablets with a planned product combination of simvastatin and ezetimibe.

In Q109, Merck & Co purchased compatriot Schering-Plough, with the latter to take on

the

former’s name. The stock and cash reverse merger was finalised in November 2009,

and is likely

to bring significant synergies both in terms of sales and product portfolio enhancement.

Combined

2008 sales were in excess of US$47bn.

Schering Plough, the first multinational to establish local manufacturing plant in

Singapore,

current has seven such facilities, which are capable of producing APIs, tablets, dry

powder

inhales and nasal sprays. The company also has sales and marketing offices there (SOL

Ltd),

incorporating distribution and clinical trials business. To date, Schering-Plough invested

some

US$1bn in the country, with the most recent move being to open its Translational

Medicine

Research Centre (TMRC), as part of its research institute. The centre is focused on

finding a

match between biomedical advances and patient benefits.


Page 74


Recent Activities

Merck & Co opened a new US$100mn formulation facility in Singapore during Q406,

which is

used for the production of drugs currently in late-stage development. The new facility is

primarily

handling cholesterol-lowering statins. Merck has invested over SGD1bn (US$635.25mn)

in

manufacturing in Singapore, which offers a number of tax incentives to foreign

companies

operating on the island.

Product Portfolio

The company’s product portfolio includes analgesic, anti-inflammatory, anti-fungal,

cardiovascular, dermatological, endocrinology, gastrointestinal, infection, neurological,

ophthalmic

and respiratory treatments, as well as vaccines. During 2004, the company withdrew

Vioxx from

all the 80 markets in which it was sold, due to reports regarding negative side effects.

The company is expanding its local production portfolio through a second collaboration

with

Schering-Plough, which will focus on a once-daily hay-fever and asthma treatment that

combines

Schering-Plough’s allergy and cold medicine, Claritin (loratadine), with Merck’s asthma

medicine,

Singulair (montelukast).

In December 2009, US generics specialist Mylan confirmed that MSD Singapore and

ScheringPlough are suing it over the filing of an Abbreviated New Drug Application

(ANDA) with the US’s

Food and Drug Administration (FDA) for a generic version of Merck’s Vytorin (ezetimibe

and

simvastatin) tablets. It is alleged that Mylan’s filing infringes the patent on the product,

which is

used as a cholesterol treatment. The case has been brought to the attention of the US

District

Court for the District of New Jersey. According to IMS Health, sales of Vitoryn tablets – in

the

similar strengths to Mylan’s application - reached US$1.6bn for the 12 months to the

end of

September 2009.

Regional Operations

Merck Sharpe & Dohme (MSD) Asia Pacific division is a considerable commercial force in

the

region. Apart from South Korea, the company is also particularly active in the Japanese

pharmaceutical market.

Leading Products

Zocor (simvastatin)

Ezeterol (ezetimibe)

Glucovance (glyburide + metformin)

!

Merck Sharp & Dohme (Singapore) Limited

21 Tuas South Avenue 6

637766 Singapore

!

Address

Tel: +65 6880 9000

!

Fax: +65 6880 9010

!

www.msd-singapore.com


Page 75


Baxter

Cost-containment in the public sector.

Negative changes in terms of patient purchasing power.

!

Rising patient sophistication and demands, boosted by population ageing and expansion

of private healthcare facilities.

Government’s efforts to develop the country as the regional medical hub.

Rising regional demand for medical devices, with Singapore providing a solid base in the

Asia Pacific area.

!

Continued encouragement of FDI.

!

Strong competition in Singapore from a number of leading multinational companies that

are expanding their local presence.

!


parallel imports.

!

Overview

!

!

Threats

Good position to follow the anticipated economic upturn in the Asia-Pacific region.

!

Opportunities

Significant commitment to the local and regional markets (through co-operative

commercialisation agreements).

!

Weaknesses

!

!

Strengths

Nascent medical devices industries of regional markets such as Malaysia.

Baxter Healthcare SA (BHSA), which was established in 1978, is the Singapore branch of

the

Swiss medical devices company Baxter Healthcare SA. The company is a leading

manufacturer

of healthcare products, including medication delivery sets, electronic infusion pumps

and solution

bags. It has two divisions in Singapore: Baxter Woodlands and Baxter Singapore. The

company

employs some 1,700 people in Singapore.

2

BHSA is located in a 1mn ft facility in Woodlands. BHSA has invested in excess of

US$300mn in

Singapore since establishing its operations there more than 25 years ago. Its regional

sales office

in Singapore covers Asia and has 90 employees and estimated annual sales of

US$90mn.

Recent Activities

In April 2009, Baxter Biosciences announced the construction of a new plant in

Singapore for the

manufacture of an API used in haemophilic treatment Advate (rAHF PFM). Production of

the

ingredient is expected to start within the next three to five years, with the site

eventually to employ

up to 230 staff. Baxter, which already operates three similar sites in the country, has

not disclosed

the details of the latest investment, although estimates suggests that it could be as

much as

US$1bn, given the high costs of biologics manufacture.

Product Portfolio

Baxter is involved in the following areas: anaesthesia, biopharmaceuticals, blood

collection and

transfusion, medication management, oncology and renal.

Leading Products

Advate Antihemophilic Factor (recombinant)

Plasma/Albumin Free Method (rAHF-PFM) haemophilia treatment

Address

!

!

!

!

Baxter Healthcare SA

2 Woodlands Industrial Park D, Singapore 738750

Tel: +65 6368 5555

Fax: +65 6368 4129

www.baxter.com.sg


Page 76


Country Snapshot: Singapore Demographic Data

Section 1: Population

Population By Age, 2005 and 2030 (mn, total)

Population By Age, 2005 (mn)

70-74

70-74

6 0-64

60-64

50-54

50-54

4 0-44

40-44

3 0-34

30-34

2 0-24

20-24

10-14

14

0-1

0-4

- 0.2

0-4

-0.1

0.0

Male

0.1

0.2

0.3

-0.6

-0.4

-0.2

Female

0.0

2030

0.2

0.4

0.6

2005

Source: UN Population Division

Table: Demographic Indicators, 2005-2030

2005

2010f

2020f

2030f

Dependent population, % of total

27.8

25.6

29.8

40.3

Dependent population, total, ‘000

1,229

1,198

1,482

2,099

Active population, % of total

72.2

74.2

70.1

59.6

Active population, total, ‘000

3,191

3,464

3,485

3,104

Youth population*, % of total

19.9

16.7

12.0

12.9

Youth population*, total, ‘000

881

781

599

674

Pensionable population, % of total

7.8

8.9

17.7

27.3

Pensionable population, total, ‘000

348

417

883

1425

f = forecast. * Youth = under 15. Source: UN Population Division

Table: Rural/Urban Breakdown, 2000-2030

2000

Urban population, % of total

Total population, ‘000

2005

2020f

2030f

100

100

100

100

4,017

4,326

4965

5202

f = forecast. Source: UN Population Division


Page 77


Section 2: Education and Healthcare

Table: Education, 2000-2004

Adult literacy, male, %

96.6

Adult literacy, female, %

88.6

Source: UNESCO

Table: Vital Statistics, 2005-2030

2005e

2010f

2020f

2030f

Life expectancy at birth, males (years)

76.7

77.6

79.2

80.4

Life expectancy at birth, females (years)

80.5

81.3

83.2

84.4

e/f = estimate/forecast. Source: UNESCO

Section 3: Labour Market and Spending Power

Table: Employment Indicators, 2001-2006

2001

2002

2003

2004

2005

2006

2,120

2,129

2,150

na

2,367

1,881

– % change y-o-y

-3.3

0.4

1.0

na

na

-20.5

– % of total population

51.7

51.1

50.9

na

54.7

42.9

Employment, ‘000

2,047

2,017

2,034

1,632

na

1,797

– % change y-o-y

-2.3

-1.4

0.8

-19.7

na

na

1,149

1,137

1,123

961

na

1,037

– female

898

880

911

671

na

760

— female, % of total

43.8

43.6

44.8

41.1

na

42.3

Total employment, % of labour force

96.5

94.7

94.5

na

na

95.5

Unemployment, ‘000

73

111

116

101

na

84

– male

42

65

66

57

na

45

– female

31

46

51

45

na

40

– unemployment rate, %

3.4

5.2

5.4

5.8

na

4.5

Economically active population, ‘000

– male

na = not available. Source: ILO


Page 78


Table: Consumer Expenditure, 2000-2012 (US$)

2000

2007e

2008e

2009f

2010f

2012f

Consumer expenditure per capita

9,751

13,559

15,369

16,731

17,644

19,589

Poorest 20%, expenditure per capita

2,438

3,390

3,842

4,183

4,411

4,897

Richest 20%, expenditure per capita

23,890

33,221

37,654

40,991

43,229

47,993


31,983

44,475

50,410

54,878

57,874

64,251

Middle 60%, expenditure per capita

7,476

10,396

11,783

12,827

13,527

15,018

10,170

14,213

15,315

na

na

na

Poorest 20%, expenditure per capita

2,542

3,553

3,829

na

na

na


24,915

34,822

37,522

na

na

na


33,356

46,619

50,233

na

na

na

Middle 60%, expenditure per capita

7,797

10,897

11,741

na

na

na

Purchasing power parity

Consumer expenditure per capita

e/f = BMI estimate/forecast. na = not available. Source: World Bank, Country data; BMI

calculation


Page 79


BMI Methodology

How We Generate Our Pharmaceutical Industry Forecasts

Pharmaceutical sub-sector forecasts are generated using a top-down approach from

BMI’s Drug

Expenditure Forecast Model. The semi-automated tool incorporates historic trends,

macroeconomic

variables, epidemiological forecasts and analyst input, which are weighted by relevance

to each market.

The following elements are fed into the model:

! BMI’s historic pharmaceutical market data, which have been collected from a range of

sources

including:

– regulatory agencies;

– pharmaceutical trade associations;

– company press releases and annual reports;

– subscription information providers;

– local news sources; and,

– information from market research firms that is in the public domain.

! Data that have been validated by BMI’s pharmaceutical and healthcare analysts using

a composite

approach, which scores data sources by reliability in order to ensure accuracy and

consistency of

historic data.

! Five key macroeconomic and demographic variables, which have been demonstrated,

through

regression analysis, to have the greatest influence on the pharmaceutical market.

These have been

forecast by BMI’s Country Risk analysts using an in-house econometric model.

! The burden of disease in a country. This is forecast in disability-adjusted life years

(DALYs) using

BMI’s Burden of Disease Database, which is based on the World Health Organization’s

burden of

disease projections and incorporates World Bank and IMF data.

! Subjective input and validation by BMI’s pharmaceutical and healthcare analysts to

take into account

key events that have affected the pharmaceutical market in the recent past or that are

expected to have

an impact on the country’s pharmaceutical market over the next five years. These may

include

policy/reimbursement decisions, new product launches or increased competition from

generics.


Page 80


Pharmaceutical Business Environment Ratings Methodology

Our approach in assessing the Pharmaceutical Business Environment Ratings is

threefold. First, we have

defined the risks rated to capture the operational dangers to companies operating in

this industry. Second,

we attempt where possible to identify objective indicators that may serve as proxies for

issues/trends.

Finally, we use BMI’s proprietary Country Risk Ratings (CRR) to ensure only the aspects

most relevant

to the industry are included. Overall, the system, which is integrated with all the

industries covered by

BMI, offers an industry-leading insight into the prospects/risks for companies across the

globe.

Ratings Overview

Ratings System

Conceptually, the new ratings system divides into two distinct areas:

Limits of potential returns: Evaluation of sector’s size and growth potential in each

state, and also broader

industry/state characteristics that may inhibit its development.

Risks to realisation of those returns: Evaluation of industry-specific dangers and those

emanating from

the state’s political/economic profile that call into question the likelihood of anticipated

returns being

realised over the assessed time period.

Indicators

The following indicators have been used. Overall, the rating uses three subjectively

measured indicators,

and 41 separate indicators/datasets.


Page 81


Table: Pharmaceutical Business Environment Indicators

Indicator

Rationale

Limits to potential returns

Market structure

Market expenditure, US$bn

Market expenditure per capita, US$

Sector value growth, % y-o-y

Denotes breadth of pharmaceutical market. Large markets score higher than

smaller ones

Denotes depth of pharmaceutical market. High value markets score better than

low value ones

Denotes sector dynamism. Scores based on annual average growth over five-year

forecast period

Country structure

Urban-rural split

Pensionable population, % of total

Population growth, 2003-2015

Urbanisation is used as a proxy for development of medical facilities.

Predominantly rural therefore states score lower

Proportion of the population over 65 years of age. States with aging populations

tend to have higher per-capita expenditure

Fast-growing states suggest better long-term trend growth for all industries

Overall score for country structure is also affected by the coverage of the power

transmission network across the state

Risks to potential returns

Market risks

Intellectual property (IP) laws

Markets with fair and enforced IP regulations score higher than those with

endemic counterfeiting

Policy/reimbursements

Markets with full and equitable access to modern medicines score higher than

those with minimal state support for healthcare

Approvals process

High scores awarded to markets with a swift appraisal system. Those that are

weighted in favour of local industry or are corrupt score lower

Country risk

Economic structure

Policy continuity

Bureaucracy

Legal framework

Corruption

Rating from CRR evaluates the structural balance of the economy, noting issues

such as reliance on single sectors for exports/growth, and past economic volatility

Rating from CRR evaluates the risk of a sharp change in the broad direction of

government policy

Rating from CRR denotes ease of conducting business in the state

Rating from CRR denotes the strength of legal institutions in each state. Security

of investment can be a key risk in some emerging markets

Rating from CRR denotes the risk of additional illegal costs/possibility of opacity in

tendering/business operations affecting companies’ ability to compete

Source: BMI


Page 82


Weighting

Given the number of indicators/datasets used, it would be wholly inappropriate to give

all subcomponents equal weight. Consequently, the following weight has been adopted.

Table: Weighting Of Components

Component

Weighting

Limits of potential returns

60%

– Pharmaceutical market

– 75%

– Country structure

– 25%

Risks to realisation of potential returns

40%

– Market risks

– 60%

– Country risk

– 40%

Source: BMI

Sources

Sources used include national industry associations, government ministries, global

health organisations,

officially released pharmaceutical company results and international and national news

agencies.


Page 83

0.36

0.35

111.00

0.78

0.49

2006

0.31

113.59

0.79

0.52

2007

0.32

115.89

0.80

0.56

2008

0.34

114.29

0.81

0.56

2009


3.31

Health expenditure (% GDP)

32.26

1.29

33.14

1.51

1,036.28

3.26

7.25

4.56

2006

32.64

1.75

1,166.25

3.19

8.10

5.36

2007

32.91

1.76

1,115.81

3.13

7.71

5.36

0.96

0.71

2014f

1.83

33.27

33.12

1,102.74

3.07

7.66

5.51

3.05

7.98

5.78

2011f

0.32

139.65

0.99

0.73

2015f

33.36

1.93

1,156.56

0.32

135.60

2010f

0.32

132.30

0.92

0.67

2013f

1.68

1,033.76

3.10

7.34

5.07

2009

0.33

127.73

0.89

0.65

2012f

f = forecast. Source: World Health Organization (WHO), Ministry of Health, Singapore

Department of Statistics, BMI

Public sector health expenditure (%)

Public sector health expenditure (US$bn)

931.44

6.65

Health expenditure (SGDbn)

Health expenditure per capita (US$)

4.01

Health expenditure (US$bn)

2005

Table: Singapore Healthcare Expenditure Indicators, Historical data and forecasts

0.33

125.21

0.86

0.63

2011f

2008

0.34

121.33

0.84

0.61

2010f

f = forecast. Source: IMS Health Asia, United Nations Comtrade Database, DESA/UNSD,

BMI

Drug market expenditure as % GDP

101.40

0.72

Drug market expenditure (SGDbn)

Per-capita drug market expenditure (US$)

0.44

Drug market expenditure (US$bn)

2005

Table: Singapore Pharmaceutical Market Indicators, Historical Data and Forecasts

1.05

0.78

2017f

33.38

2.01

1,180.51

3.03

8.25

6.02

3.01

8.61

6.29

2013f

0.31

150.70

1.09

0.81

2018f

33.34

2.10

1,232.92

0.31

147.17

2012f

0.31

142.68

1.02

0.76

2016f

33.24

2.17

1,258.10

2.99

8.90

6.54

2014f

0.31

152.81

1.13

0.84

2019f


Page 84

31.28

64.86

Blood and blood forming organ drug sales

Cardiovascular system drug sales


5.41

4.87

Sensory organ drug sales

Various drug sales

5.57

6.19

29.89

0.46

52.97

18.66

36.36

40.94

9.98

14.85

9.23

74.26

35.82

43.81

77.60

0.60

0.38

2006

5.85

6.50

31.39

0.49

55.62

19.60

38.18

42.98

10.48

15.59

9.69

77.97

37.61

46.00

76.16

0.60

0.40

2007

6.37

7.08

34.17

0.53

60.57

21.34

41.57

46.80

11.41

16.98

10.56

84.90

40.95

50.09

77.90

0.62

0.43

2008

6.97

6.42

68.00

0.53

0.33

2006

68.40

0.54

0.36

2007

67.90

0.54

0.38

2008

67.70

0.55

0.38

2009

67.58

0.57

0.41

2010f


BMI

66.51

0.48

Patented products (SGDbn)

Patented market as % total market

0.29

Patented products (US$bn)

2005

Table: Singapore Patented Drug Market Indicators, Historical Data and Forecasts

67.45

0.58

0.42

2011f

7.75

37.38

0.58

66.25

23.34

45.47

51.19

12.48

18.57

11.55

92.87

44.79

54.79

78.13

0.66

0.47

2010f

7.14

34.45

0.53

61.05

21.51

41.90

47.18

11.50

17.12

10.64

85.59

41.28

50.49

78.00

0.63

0.44

2009


BMI

26.11

46.27

Nervous system drug sales

Respiratory system drug sales

16.30

Musculoskeletal system drug sales

0.40

31.75

Antiparasitic product, insecticide and repellent

sales

35.75

Antineoplastic and immunomodulating agent sales

8.71

Systemic hormonal preparation, excluding sex

hormones and insulins, sales

Anti-infective for systemic use sales

12.97

Genito-urinary system and sex hormone sales

8.06

38.26

Alimentary tract and metabolism drug sales

Dermatological drug sales

75.91

0.55

Prescription drug market (SGDbn)

Prescription drug market as % total market

0.33

Prescription drug market (US$bn)

2005

48.26

59.03

78.38

0.70

0.51

2012f

50.06

61.23

78.51

0.73

0.53

2013f

52.40

64.09

78.63

0.75

0.55

2014f

67.30

0.60

0.44

2012f

7.20

8.01

38.64

0.60

68.48

24.13

47.00

52.92

12.90

19.20

11.94

67.14

0.62

0.45

2013f

7.51

8.34

40.27

0.62

71.37

25.15

48.99

55.15

13.44

20.01

12.44

66.96

0.64

0.47

2014f

7.79

8.66

41.78

0.65

74.04

26.09

50.82

57.21

13.94

20.76

12.90

66.77

0.66

0.48

66.56

0.68

0.50

-

-

-

-

-

-

-

-

-

-

-

-

-

-

78.87

0.81

0.60

2016f

2016f

-

-

-

-

-

-

-

-

-

-

-

-

-

-

78.75

0.78

0.57

2015f

2015f

8.15

9.06

43.73

0.68

77.49

27.30

53.19

59.88

14.59

21.72

13.51

96.00 100.05 103.79 108.63

46.30

56.63

78.26

0.68

0.49

2011f

Table: Singapore Prescription Drug Market Indicators, Historical Data and Forecasts

(US$mn unless stated)

66.33

0.70

0.52

2017f

-

-

-

-

-

-

-

-

-

-

-

-

-

-

78.98

0.83

0.62

2017f

66.09

0.72

0.54

2018f

-

-

-

-

-

-

-

-

-

-

-

-

-

-

79.09

0.86

0.64

2018f

65.83

0.74

0.55

2019f

-

-

-

-

-

-

-

-

-

-

-

-

-

-

79.20

0.89

0.67

2019f


Page 85

0.07

9.40

Generic drug market (SGDbn)

Generic drug market as % total market

9.60

0.07

0.05

2006

9.80

0.08

0.05

2007

10.00

0.08

0.06

2008

10.30

0.08

0.06

2009

10.55

0.09

0.06

2010f

10.81

0.09

0.07

2011f


5.47

19.07

5.70

19.86

16.81

22.13

21.26

28.17

21.80

0.17

0.11

2007

5.65

22.13

18.07

23.36

23.36

30.40

22.10

0.18

0.12

2008

5.67

22.18

18.11

23.41

23.41

30.46

22.00

0.18

0.12

2009

0.44

6.55

Medical device market (SGDbn)

Medical device market as % of total healthcare market

f = forecast. Source: Centre for Medical Device Regulation (CMDR), BMI

0.26

Medical device market (US$bn)

2005

0.44

5.39

6.04

0.29

2007

0.44

0.28

2006

Table: Singapore Medical Device Market Indicators, Historical Data and Forecasts

6.10

23.88

19.50

25.21

25.21

32.80

21.87

0.18

0.13

2010f

f = forecast. Source: ACNielsen, Association of the European Self-Medication Industry,

BMI

5.25

16.14

15.50

18.31

Skin treatments

Vitamins and minerals

Other OTC sales

21.25

20.40

Digestives

20.42

25.97

19.60

Analgesics

27.05

0.17

22.40

0.17

24.09

0.11

0.11

2006

Cough & cold drugs

OTC market as % total market

OTC market (SGDbn)

OTC market (US$bn)

2005

5.67

0.44

0.30

2008

6.26

24.50

20.01

25.86

25.86

33.66

21.74

0.19

0.14

2011f

Table: Singapore OTC Drug Market Indicators, Historical Data and Forecasts (US$mn

unless stated)


BMI

0.04

Generic drug market (US$bn)

2005

Table: Singapore Generic Drug Market Indicators, Historical Data and Forecasts

5.88

0.43

0.30

2009

6.48

25.35

20.70

26.75

26.75

34.82

21.62

0.19

0.14

2012f

11.09

0.10

0.07

2012f

5.59

0.43

0.31

6.93

27.12

22.15

28.63

28.63

37.26

21.37

0.20

0.15

2014f

11.67

0.11

0.08

2014f

2010f

6.67

26.10

21.32

27.55

27.55

35.86

21.49

0.20

0.15

2013f

11.37

0.11

0.08

2013f

5.59

0.45

0.32

2011f

-

-

-

-

-

-

21.25

0.21

0.15

2015f

11.98

0.12

0.09

2015f

5.90

0.49

0.36

2012f

-

-

-

-

-

-

21.13

0.22

0.16

2016f

12.31

0.13

0.09

2016f

5.84

0.50

0.37

-

-

-

-

-

-

20.91

0.23

0.17

2018f

13.00

0.14

0.11

2018f

2013f

-

-

-

-

-

-

21.02

0.22

0.16

2017f

12.65

0.13

0.10

2017f

5.80

0.52

0.38

2014f

-

-

-

-

-

-

20.80

0.23

0.17

2019f

13.37

0.15

0.11

2019f


Page 86

577.00

1,224.00

Imports

Balance

2006

2,971.00

825.00

3,796.00

2007

4,016.00

850.00

4,866.00

2008

2,435.00

992.00

3,427.00

2009

3,296.55

1,012.20

4,308.75

2010f


2005

10.20

4.40

Births per 1,000 population

Deaths per 1,000 population

f = forecast. Source: Singapore Department of Statistics, BMI

1.57

96.36

2.76

29.00

Doctors per 1,000 population

Hospital admissions per 1,000 population

Beds per 1,000 population

Hospitals

2007

10.30

4.50

4.40

1.61

93.42

2.51

30.00

10.30

1.58

94.51

2.62

30.00

2006

Table: Singapore Healthcare Indicators, Historical Data and Forecasts

2008

4.40

10.20

1.63

90.78

2.41

29.00

2011f

4,864.29

4,121.10

2009

4.40

10.19

1.66

88.95

2.30

29.00

4.38

10.16

1.68

87.10

2.20

29.00

2010f

1,163.19

6,027.48

1,082.88

5,203.98

f = forecast. Source: United Nations Comtrade Database, DESA/UNSD, BMI. Note:

harmonised system code 3004.

1,801.00

Exports

2005

Table: Singapore Pharmaceuticals Market Trade Indicators, Historical Data and

Forecasts (US$mn)

2012f

4.37

10.13

1.71

85.24

2.11

28.00

2011f

5,428.26

1,254.51

6,682.77

4.34

10.10

1.73

83.35

2.02

28.00

2012f

2013f

4.31

10.05

1.76

81.46

1.93

28.00

2013f

5,719.89

1,358.44

7,078.33

2014f

4.27

10.00

1.79

79.56

1.85

27.00

2014f

5,669.85

1,476.89

7,146.74


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