The document discusses the market potential for asthma drugs in Southeast Asian countries including Malaysia, Taiwan, Indonesia, Vietnam, and the Philippines. It notes that approximately 7-10% of the world population suffers from asthma. Indonesia has the largest potential market with over 2.6 million asthma sufferers and the highest number of asthma-related deaths annually. The respiratory drug market is still small compared to the total pharmaceutical market in Southeast Asian countries. However, factors like increasing demand for Western medicines, economic development, and reliance on drug imports indicate potential for growth in the respiratory drug market in these countries.

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Market Potential For Asthma Drugs in South East Asia Market- Malaysia, Taiwan, Indonesia, Vietnam and
Philippines
Author: Udaya Gupta
Asthma is a chronic lung disease that inflames and narrows the airway which leads to respiratory disorderness.
Approximately 7 to 10% of the world population is suffering from asthma. Prevalence of this non communicable disease
is very high ever since 1970. As of 2010 there were 300 million people diagnosed from asthma and is expected to rise
by 100 million by the end of the decade. According to WHO regions like South East Asian, African and USA have high
asthma mortality rates compared to rest of rest of the countries. These mortality cases are likely to be high in countries
where accesses to essential medicines are low. This is due to the fact that pharmaceutical market in many countries is
still at nascent stage. Lacks of manufacturing facilities, technologies, high rely on imports are the common barriers for
this industry. Low per capita income of (80 – 200$USD) many countries made health care prohibitively expensive.
Regions like south East Asia are far in reach of primary health care facilities (30% of suffers are being treated with
traditional medicines). Around 12 million people are being suffered from asthma. Strong appetite towards western
medicines, moderately strong score of HDI (0.6 – 0.8) and high rely on imports of API (75% of raw materials are
imported) had created enough room for investors to concentrate upon. Some of the countries which have huge potential
in terms of respiratory drug market are Malaysia, Taiwan, Indonesia, Vietnam and Philippines.
ASTHMA:
The chronic inflammatory disease is associated with airway hyper responsive that leads to recurrent episodes of
wheezing, breathless, chest tightness and coughing, particularly at night or in the early morning. Irrespective of age
group, asthma was observed among vast population. This chronic respiratory disease was observed mainly due to
working environments (occupational asthma), living standards (environmental asthma) or through genetic transfer
(childhood asthma). It is the 3rd
leading cause for hospitalization among children’s. 15 – 23% of asthma cases are
observed in adults due to working environments. According to WHO, countries with more western civilization have
higher prevalence rates of Asthma.
CAUSES AND RISK FACTORS:
Atopic asthma is the most commonly prevailing problem, nearly 80 % of people who are suffering from asthma
have allergies to airborne pollutants such as tree, grass, and weed pollens, mold, animal dander, dust mites, and
cockroach particles. Chemical compounds like Di Ethylhexyl Phthalates (DEPH) have strong risk associated symptoms
of asthma. It can be transferred to next generations as a genetic disease. Over 100 genes have been associated with
asthma in at least one genetic association study. 25 genes had been associated with asthma in 6 or more separate
population. Low birth weight, exposure to tobacco smoke before / after birth, family history of asthma or allergies and
being raised in a low/ unhygienic environment are some of the major risk factors associated in developing childhood
asthma.
TREATMENT:
There are two main types of asthma medications which reduce inflammation and mucus production in airways.
1). Anti-Inflammatories: Anti-inflammatory medications, such as inhaled steroids, reduce swelling and mucus
production in the airways. 2). Bronchodilators: These medications relax the muscle bands that tighten around the
airways.
INHALATION THERAPY:
Different inhaler devices suit different people. Inhaler devices can be divided into four main groups:
1). Pressurized metered dose inhalers (MDIs) 2). Breath-activated inhalers - MDIs and dry powder inhalers, 3). Inhalers
with spacer devices, 4). Nebulizers.
Depending upon age group different inhalers are prescribed like 1). Babies (Pressurized aerosol inhaler with spacer and
mask nebulizer) 2). Children under 4 years old (Pressurized aerosol inhaler with spacer and mask nebulizer), 3). Children
4-8 years old (Pressurized aerosol inhaler with spacer, Dry powder inhaler, Breath activated inhaler), 4).Children older
than 8 years (Pressurized aerosol inhaler, Pressurized aerosol inhaler with spacer, Breath activator inhaler, Dry powder
inhaler).

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15600 16000 16800
19000
10000 10200 11000
14000
0
5000
10000
15000
20000
2008 2009 2011 2015
(expected)asthma drug market
12.5 14.4
29.8
6.6 7.5
13.4
0.5 0.7 0.9
0
10
20
30
40
2010 2011 2016
MDIs DPIs Nebulizers
LITERATURE REVIEW:
Globalization had created potential opportunities for companies to explore new markets, understand consumer
behaviors and localize products. An emergent market provides huge potential opportunity for business to grow.
Multinational companies need to decide whether to enter or not and then decide the entry mode in to the country. Entry
mode decisions are analyzed in the context of transactional cost, it is observed that MNC’s entry mode is depended on
minimization of transaction cost. (Sarkar and cavusgil, 1996; Rindfleisch and Heide, 1997; Meyer,2001; Nakos and
brouthers,2002; Herrmann and Datta, 2002; Meyer, 2004 and Decker, 2006).
It is also observed that companies measure potential financial reward if they enter the emerging markets. They
invest in the country if only the risk associated with can be properly compensated with financial return or reward on
investment. The return on investment is depended on resource markup, size of the investment and risk associated with
the return on investment (Anthony 2010).
Consumer involvement in purchase of non prescription medicines seems to decrease with increase in
educational and income level. According to a study conducted by Prasanna gore (1994) educated people feel they have
already high awareness about nonprescription drugs and their ability to understand label instructions. With respective to
income, consumers with low income may assign importance on every purchase and hence become more involved in
purchasing of nonprescription drug than people with high income levels.
According to Pieter Dylst and Steven simonies (2011) market share of generic drugs will have effect on pricing.
The research lead to conclusion that price reductions appears to vary across the countries according to market share of
generic medicines. High generic market share countries have larger pressure on pricing than low generic market share
countries. In order to stipulate price competition many marketers introduce demand side policies that creating incentives
for physicians, pharmacists and patients.
Chantal M.Morel (2011) observed that their does not exist relation between pricing strategy of pharmaceutical
products and country GDP. But it was determined by number of health care polices. Even though pricing differs in
developed and under developed there doesn’t exists any pattern with respective to GDP. If countries are forced to follow
patent rights in agreement to trade related aspects of intellectual property rights developing countries could have even
difficulty in accessing branded drugs because of delaying in generic drugs to enter the market which lead manufacturers
of branded drugs to follow pricing strategies that can be more of skimming. Human development index (HDI) also an
competitive tools in analyzing the consumer markets. HDI gives us an composite score of life expectancy, education and
income index of a country. It states that more the HDI index more prospers is the country to invest. The HDI for
emerging countries lies in the range of 0.4 to 0.6.
INHALATION MARKET:
According to world health statistics non communicable diseases accounts for majority of deaths as of April
2011. According to WHO reports almost 90% of COPD deaths occur in low and middle income countries. The overall
asthma and COPD market is estimated to be at $ 29 billion as of 2011. Asthma market was valued at $ 17 billion in
2011 and is projected to reach $ 18 billion in 2014 growing at a CAGR of 1.2 %.
Global market for asthma and COPD drugs 2008-2015 (US $mn). Global market for pulmonary drug delivery Inhalers2010 – 2016 (US$mn)
The global pulmonary drug delivery technologies market which is around $22.5 billion by 2011 is projected at $ 44
billion by 2016 growing at a compound annual growth rate of 14.3%.The market for metered dose inhalers (MDIs) was
$12.5 billion in 2010 and will reach $14.4 billion by the end of 2011. BCC forecasts this market will grow to $29.8
billion by 2016 at a CAGR of 15.7%. The market for dry powder inhalers (DPIs) was $6.6 billion in 2010. This market is
expected to increase to $7.5 billion in 2011 and reach $13.4 billion by 2016 at a CAGR of 12.3%.

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SOUTH EAST ASIAN MARKET SCENARIO:
Globalization and liberalization policies in practice had created huge opportunities for trade and investment
across world nations. With easing the trade norms and investment policies many countries have witnessed robust
developments in the fields of technology, infrastructure, increased share of exports and imports and creating employment
opportunities across all sectors of economy. Pharmaceutical industry holds a distinct image admits many successful
industries. The demand for pharmaceutical drugs has created growing opportunities among Asian countries. Especially
countries like Malaysia, Indonesia, Philippines, Vietnam and Taiwan etc are showing development scores in this arena.
Rise in need of sophisticated technology, growing number of causalities and less exposed markets have created potential
investment opportunities in these countries. Indonesia, Taiwan and Philippines are fairly emergent pharmaceutical
markets with huge demand and wide accessibility of pharmaceutical drugs. Despite grievances over intellectual property
rights and strong presence of counterfeiting drugs, manufacturing standards are improving with the entry of foreign
manufacturers through FDI’s and strategic alliances with domestic players. Asthma is one of the leading mortality
causing disease across south East Asia. Around 15 million people were being diagnosed and nearly 0.5 million people
dies every year due to lack of proper treatment
Asthma statistics among South East Asian countries:
Country Disease (Rank) Population in mn Market size Total no. of
deaths
Asthma as % of total
deaths
Indonesia Asthma (21) 245 2.6 million 14,624 1.03
Philippines Asthma (10) 101 6 million 10,471 2.48
Vietnam Asthma (11) 91 1 million 8,084 1.50
Malaysia Asthma (22) 28 1.4 million 988 0.97
The share of respiratory drug market is very low when compared to total market size across all countries. Indonesia and
Taiwan are the major market in South East Asia where as Malaysia has the lowest share of respiratory market with
respective to total pharmaceutical industry size. The highest asthma prevalence cases are registered in Philippines
followed by Indonesia and Malaysia.
Indonesia(221,
4400)
Malaysia
(91,2430)
Philippines (336,
2800)
Taiwan (446,
4400)
Vietnam
(115,2050)
0
2000
4000
6000
0 100 200 300 400 500
Pharmamarketsize
millions$
Repiratory market size $ millions
Respiratory market Vs total market
Irrespective of large pharma market and reasonably established domestic market Indonesia recorded maximum number
of mortality cases due to Asthma. It is the 21st leading mortality disease with 2.6 million populations being diagnosed
every year. Asthma accounts for nearly 14,600 deaths at a rate of 8/100,000 population and high prevalence cases are
observed in males aged 15 and above.

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38
%
24
%
38
%
Pharmaceutical
market-Indonesia
Patented drugs
Generic drugs
OTC medicines
KEY INDICATORS:
Indicators Indonesia Philippines Malaysia Vietnam
Economic Indicators (2011)
GDP (US $ billion nominal) 822.63 202 247 118
% Real Growth 6.6 6.4 5.2 5.8
Population million 245 101 28 91
% Inflation 4.2 5.4 2.10 13.50
Pharmaceutical market (US $ mn) 4400 2800 2430 2050
Respiratory market (US$ mn) 221 336 91 115
Human development index 0.62 0.64 0.76 0.59
Health Financing (2008)
Total health expenditure as % of GDP 2.3 3.7 3.2 7.2
General govt expenditure on health as % total health care exp 54.4 34.7 44.1 38.5
Private expenditure on health as % of total health care exp 45.6 65.3 55.9 61.5
Out-of-pocket expenditure as % of private expenditure on
health
70.3 82.5 73.2 90.2
Per capita(US$) health expenditure 51 68 353 76
Health Systems (2008)
Hospital beds (per 10,000 population) 6 5 18 29
Physician density (per 100,000 population) 30 30 90 120
Nursing density (per 100,000 population) 200 600 270 100
INDONESIA:
The Republic of Indonesia (RI), is the world’s largest archipelago and fourth most populous country in the
world. Indonesia accompanies 240 million people across half of its 17,508 islands located in south eastern region. With
large manpower in hand country there is always huge scope for development in terms of foreign direct investment.
Indonesian government has geared up its reforms to transform the economy from a primary producer to a value added
exporter as well as knowledge based economy.
PHARMACEUTICAL INDUSTRY:
The health care sector in Indonesia is still at the nascent stage, where a significant proportion of the population
does not have access to adequate healthcare which remained pharmaceuticals prohibitively expensive for many.
According to WHO only 1/3rd
of population has accessibility to basic health care facility. Nevertheless, the demand for
drugs will rise over the years, due to increased appetite for modern medicines, population growth and healthcare service
improvements, as well as developing macro economic conditions.
Indonesia has over 232 pharmaceutical manufacturers, distributors and traditional
chemical manufacturers, including 32 multinationals worth US$ 4.4 billion growing at a
rate of 14% y-o-y(2011). Despite the overhaul of Indonesia’s regulatory system, its
pharmaceutical sector remained in a plight situation. Inadequate patent laws, uncertain
government pricing policy and inadequate infrastructure are largely to blame. Many of the
multinationals have located their manufacturing plants, while others import through
distributors.
Country has relatively low share of generic drugs. Patented drugs have a total of
38% market share followed by generic drugs with 24%. The country has huge market
potential of 2.6 million. Wide availability of counterfeit drugs and selling through illegal
means makes pharma market at stagnant position. With increase in appetite towards
western medicines and preference for branded drugs had given enough room for new
comers to explore the market.

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COUNTRY SWOT ANALYSIS: (From Investor Perspective)
References:
1. Euro monitor International Ltd. (2012), World Consumer Income and Expenditure Patterns, vol, 60-61 Britton
Street, EC1M 5UX.
2. Indonesia. Ministry of industry republic of Indonesia (2011). Industry facts and figures. Indonesia. Government
printing office.
3. Business Monitor (Q3, 2010). Author: Indonesia pharmaceuticals and healthcare report includes 10 years
forecasts to 2019. ISSN 1748-1945.London: Business Monitor International.
4. International union against tuberculosis and lung disease (2011).ISAAC: The global asthma report 2011. Paris,
France: ISAAC.
5. World Health Organization (2011). Author: global surveillance, prevention and control of chronic respiratory
diseases a comprehensive approach. Switzerland: WHO.
6. American lung association (2010). Author: State of lung disease in diverse communities. USA: American Lung
Association.
7. Astrazeneca (2010). Author: How does health connects us all? Astrazeneca annual report and form20-f
information 2010.USA: AstraZeneca
8. World health organization.(2011). Author: Non-communicable disease country profile 2011. France: WHO
9. Indonesia. Ministry of industry republic of Indonesia (2011). Industry facts and figures. Indonesia. Government
printing office.
10. IMAP (2011). Author: Pharmaceuticals and biotech industry global report 2011. USA. IMAP.
11. Business Monitor (Q3, 2010). Author: Indonesia pharmaceuticals and healthcare report includes 10 years
forecasts to 2019. ISSN 1748-1945.London: Business Monitor International.
12. The World Bank (March, 2009). Author: Indonesia health care sector review.USA: The World Bank.
Strengths:
 Policy in dismantling monopoly and
liberalization regulation policies.
 Pharmaceutical industry has been recording
double digit growth rate over the years
 Wide distribution network of 11,000+
pharmacies.
 Well established local industry, with domestic
market accounts for 70% of production.
Opportunity:
 Privatization of state owned enterprises
 Relied on API imports. 90% of API’s are being
imported into the country
 Removal of pharmaceutical industry from
negative investment list.
 Trade liberalization among association of
ASEAN countries.
Threats:
 High currency fluctuations lead Indonesia as
Asia’s one of the riskier destination.
 China poses potential threat for FDI.
 Policy regulations of 75 % cap of investment
and should need local partners for manufacturing goods.
Weakness:
 Low annual disposable income $5,000-$15,000
of 60% of the population.
 No private insurance and No reimbursement
policy.
 Illegal trade of pharmaceutical drugs.
 Excessive bureaucracy, unqualified human
resource and poor infrastructure created unhealthy
environment for investments.
 Poor manufacturing facilities.