As PharmAsia News wraps up its second year of publishing, we look back to some of the top trends and stories of 2009, as well as developing stories to keep an eye on in 2010.

China's Anti-Monopoly Law Put To Test

China's 2008 Anti-Monopoly Law has dominated companies' concerns about M&A activity in China, especially after the government used the little-tested law to block an acquisition by Coca-Cola of a domestic Chinese juice company. But in 2009, the government cleared the Pfizer-Wyeth merger, sending a positive signal to global pharmaceutical players that China is willing to accept some major acquisitions.

China's Ministry of Commerce initially extended its 30-day review of the $68 billion Pfizer merger, raising concern about the future of the deal. While the merger approval was a cause for a collective industry sigh of relief, vaguely defined provisions in the law - no definition is provided for the phrase "abuse of market position" - leave a shadow of doubt for execs looking to M&A activity to speed up access to China's growing market (Also see "China Orders Pfizer And Wyeth To Divest Certain Operations As Condition To Merger Approval" - Scrip, 30 September, 2009.).

China's Healthcare Reform Expands Market, Tightens Regulations

While plans for U.S. healthcare reform continue to drag on, China began to implement its three-year, RMB 850 billion ($124 billion) healthcare system reform by expanding its national drug reimbursement catalog, rolling out a new Essential Drug List, and improving infrastructure.

The Chinese government was estimated to have paid $14.6 billion in 2009 for insurance premiums in China's rural areas - a 68 percent increase over 2008 - and allotted $2.4 billion in 2009 for infrastructure improvements and equipment purchases, also with an emphasis on rural facilities (Also see "China’s Central Government To Invest $17 Billion In Healthcare Reform In 2009" - Scrip, 26 April, 2009.). While big pharma is keeping its eyes on China's major markets in Shanghai and Beijing, expanded health insurance and updated medical devices and infrastructure are creating big opportunities for drug distributors and device firms in China's rural districts.

Government action like the addition of 250 products to the drug reimbursement catalog show a preference for domestic firms in the near-term, but analysts expect the multinational companies to increasingly benefit from reform. The recent expansion of the reimbursement list focussed mainly on domestically produced drugs on the Essential Drug List, but there is room for negotiation by regional insurance programs to provide coverage for innovative drugs (Also see "China Boosts Health System Reforms With Expanded National Drug Reimbursement List" - Scrip, 8 December, 2009.).

Multinationals Target India's Generic Firms

If 2008 is remembered for the Daiichi Sankyo clinch of India's largest drug maker Ranbaxy, 2009 will be remembered for the series of manufacturing tie-ups between multinational and Indian companies. Multinationals are eyeing emerging markets for growth, and partnering with India's generic firms for quick access to generic portfolios (Also see "Partnering Better Than Solo Play For Biosimilars, Says Dr. Reddy's CEO; Limited Growth In Generics Will Lead To Moves For Innovative Drugs" - Scrip, 3 November, 2009.).

Pfizer sourced more than 100 products, both injectables and orals, from India's Aurobindo and Claris to strengthen its Established Products Business unit and GSK sided with Dr. Reddy's for an equal number of products to be sold in emerging markets. Most recently, Hospira acquired the manufacturing and R&D unit of Orchid Chemicals for $400 million to gain access to Orchid's betalactum facility in Chennai in addition to a portfolio of more than a dozen injectable drugs.

Asian Governments Help Fill Research Funding Gap, Lure Business

No sector was immune to last year's global financial crisis, and funding for research programs was flat in 2009. Countries are luring companies with new research parks, tax breaks, and low start-up costs; Singapore has dropped billions of dollars since 2000 to build its Biopolis R&D campus and fund foreigners' research programs to kick-start the country's biotech industry (Also see "Singapore Offers Public Funds To Bridge Valley Of Death, But Can It Last? – BioMedical Asia" - Scrip, 23 March, 2009.).

Smaller Asian countries cannot compete with China and India when it comes to rapid clinical trial enrollment thanks to the two titans' massive patient populations, so South Korea, Singapore and Malaysia are trying to establish themselves as regional leaders for early-stage trials (Also see "Forget China And India, Clinical Trial Opportunities In Malaysia and South Korea" - Scrip, 4 September, 2009.).

South Korea Reaching For Global Standards

South Korea took a number of steps in 2009 to improve its regulatory framework. From issuing guidance on biosimilars to curbing the common practice of pharma kickbacks to doctors, South Korea is making big strides to establish itself as one of Asia's premier markets.

Korea's biosimilar guidelines are in line with EMEA's biosimilars regulatory framework, and the country's top firms, including Green Cross, Celltrion, Samsung and LG Group, are gearing up to meet guidelines and grab market share in the burgeoning sector (Also see "Korea FDA Gears Up To Release Biosimilar Guidelines Modeled After EU Rules" - Scrip, 21 May, 2009.).

For many years, the Korean healthcare industry had accepted a practice of "rebates" - or kickbacks - from drug companies to healthcare providers. The government took a stand in 2009 to curb this standard operating procedure. Korea's Ministry for Health, Welfare and Family Affairs announced plans to cut retail drug prices by up to 20 percent for companies found to provide kickbacks to doctors; Pfizer, Merck, Otsuka, GlaxoSmithKline, Eli Lilly and others were slammed with fines in 2009 by Korea's Fair Trade Commission for giving kickbacks to medical workers (Also see "Korean Ministry Plan To Order Penalty-based Price Cuts On Pharmaceuticals Faces Resistance From Global And Local Players" - Scrip, 24 July, 2009.). A number of these companies are appealing the FTC decision.

First PharmAsia Summit Highlights India and China

PharmAsia News ended the year with its inaugural PharmAsia Summit in San Francisco, where investors said China and India did not feel the financial pinch of the last year as much as the West. In fact, the market was overheating in China and forcing valuation way too high. One investor said the crisis has been a good thing for VCs because it will make them more careful. Still, corrections are predicted for all emerging economies this year, and China is still very difficult to forecast because the entire trajectory of China is unprecedented because there has never been a major economy that has developed as fast and in quite the same way, another VC said (Also see "Investment Outlook For China And India Too Hot? VCs Anticipate Market Corrections - PharmAsia Summit" - Scrip, 9 November, 2009.).

- PharmAsia News (pharmasia@elsevier.com)

PharmAsia News' Top Industry Trends Of 2009

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