Critical Success Factors for the Korean Generic and
API Industry in a post FTA Environment
DAVID HARDING
SEOUL
JUNE 28-29, 2007
AGENDA
• About Thomson Reuters
• Possible effect of KORUS Free Trade Agreement
on Korean generic and API industries
• The role of information in generic product
development
• Horizon Global™: an industry standard for generic
product selection
ABOUT API INTELLIGENCE (fmr Newport
Strategies)
• Founded in 1990
• A business of the $7bn Thomson Reuters Corporation
• A unique research focus: tracking global generic API development
and manufacturing activities
• High quality, “must have” information delivery to executives in
–
–
–
–
–
–
Strategy, Planning and Product Targeting
Business Development & Licensing
Competitive & Business Intelligence
R&D and Regulatory Affairs
API Sourcing
Patents & Intellectual Property
• Relied upon by the majority of the world’s generic pharmaceutical
companies and API manufacturers
• Headquartered in Portland, Maine, USA
GENERICS: A $90B GLOBAL
OPPORTUNITY
Western Europe
$17bn
US, Canada: $50bn
Eastern Europe &
Russia: $10bn
China: $3bn
Japan: $4bn
Rest of World: $4bn
Latin America: $2bn
Total World Pharmaceutical Sales: $600bn
Source: TS Research, IMS Health, VOI PharmaHandbook
KOREA & THE KORUS FREE TRADE
AGREEMENT
• Korean drug industry was $7.8 billion in 2005 of
which generic drugs accounted for 15% of the
market¹
• Korean population is aging more rapidly than any
other country with healthcare spending by those
over 65 years old growing by 10% to 20% annually¹
• KORUS FTA includes commitments to improve
access of US innovative and generic
pharmaceutical products to South Korean market²
• As of 2005, foreign company share of the Korean
market was at 26%¹ Source: ¹ VOI PharmaHandbook 2006,IMS Health; ² www.ustr.gov Trade Facts
HOW COULD THE FTA IMPACT KOREAN
GENERICS & API COMPANIES
• It will drive more branded sales as generics will see increased barriers to entry in
Korean market
• It will increase foreign company share of Korean market
• It will provide enhanced access to the US market for Korean API and dose
outsourcing supply
• It will have negative impact on Korean companies (both dose and API) given Indian
and Chinese competition
• It will increase competition for domestic company share of Korean market
Korea has the expertise to compete in other regulated markets and
should look to US and EU supply opportunities for growth!
WHAT CHALLENGES WILL KOREAN GENERIC &
API COMPANIES FACE IN THIS NEW
ENVIRONMENT?
• India is excellent at low-cost, high quality finished dose products
• China is known for low-cost, high quality API and intermediates
• In- and out-licensing will be as important as domestic in-house product
development
• A number of products worldwide coming off patent with a growing number of
competing generic companies
• Early access to API is still the key to speed to market and success
Number of Corporate Groups
AVAILABILITY OF HIGH-QUALITY API IN
INDIA, CHINA & KOREA
120
104
100
74
80
India
China
Korea
60
40
25
18
20
17
8
0
Established
Less Established Potential Future
Source: Newport Strategies Horizon Global ™
US DMF FILINGS BY INDIAN, CHINESE & KOREAN
API MANUFACTURERS
Number of Type II DMFs
350
319
300
283
250
150
138
100
83
61
50
17
32
0
India
China
Korea
202
200
4
59
43
37
46
9
14
2
27
2
14
2
36
45
53
0
3
3
96
104
3
3
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: Newport Strategies Horizon Global ™
COS FILINGS BY INDIAN, CHINESE & KOREAN AP
MANUFACTURERS
Number of COS Filings
70
60
60
56
53
50
40
40
37
35
27
30
18
20
10
5
3
0
0
16
2
1997 1998
16
11
8
3
2
21
19
0
6
4
2
1999 2000 2001
9
7
4
2
2002 2003 2004
5
8
2005 2006
India
China
Korea
TYPE I JAPANESE DMF FILINGS BY INDIA,
CHINESE & KOREAN API MANUFACTURERES,
2005-2007
57
India
China
Korea
111
100
Source: Newport Strategies Horizon Global ™
NUMBER OF API PLANTS INSPECTED BY THE
US FDA SINCE 1990 IN INDIA, CHINA & SOUTH
KOREA
80
70
68
60
60
51
45
50
Indian Ownership
Chinese Ownership
Korean Ownership
40
30
20
5
10
4
0
Sites
Groups
Source: Newport Strategies Horizon Global ™
ANDA APPROVALS BY INDIAN GENERICS
120
100
80
Tentative
Final
60
40
20
0
1997
1998 1999
2000 2001
2002 2003
2004 2005
2006
Source: Newport Strategies Horizon Global ™
GENERIC DRUG & API MANUFACTURERES
HAVE MANY QUESTIONS…
What is the patent
or exclusivity
situation?
Who is competing
with us?
What should I develop?
Where do I source
the API?
How big is the market?
Do I partner or
develop alone?
Where should I launch?
Should I focus
on regulated
markets?
THE GENERIC PRODUCT DEVELOPMENT
PROCESS
Targeting
L – 8 years
Evaluation
L – 7 years
Deal
Making
Formulation
Dev’t
Registration
& Review
Launch
L – 18 months
L – 6 years
Launch
Target possible candidates for development
Research product candidates in detail
Find the right partners
Make products quickly and safely
Get first approval
Deliver to the customer!
THE ROLE OF INFORMATION IN THE
GENERIC PROCESS
Targeting
Evaluation
Deal
Making
Formulation
Dev’t
Registration
& Review
Launch
Information Needs - Data
• Sales*
• Dose Form and Strength*
• Patents, Patent Challenges*
• Labeling
• Chemistry, Synthesis
• Data Exclusivity*
• Market Exclusivity*
• Approvals
• API Sources*
• Company Data*
• Manufacturing Capabilities*
• Bioequivalence
• Stability
• Pharmacodynamics
• Toxicity
• Country Regulations*
• Pack Pricing*
• Reimbursement
*Available from Thomson Scientific
KEY BUSINESS NEEDS IN THE GENERIC
PROCESS
Targeting
Evaluation
Deal
Making
Formulation
Dev’t
Registration
& Review
Launch
Business Needs - Functionality
• Access global market, intellectual property and product info*
• Predict key data in advance (e.g. competitiveness, generic launch date)*
• Flexible, fast searching across multiple, exacting criteria*
• Identify early, viable source of API supply and backup sources*
• Spot in- and out-licensing capabilities*
• Identify potential partner companies with multiple, exacting criteria*
• Keep a watchful eye on potential acquisition targets, track competitors*
*Available from Thomson Scientific
HORIZONS GLOBAL: A GENERIC
INDUSTRY STANDARD
• First launched in December 2002
– Version 3.5 released December 2006
– Version 4.0 targeted for summer 2007
• Used by at least 3 of the top 5 companies in every
generic market
– 100+ companies
– 2,500+ users
• Used by companies to strategically target products
for development, find partners, and attract
customers
HORIZONS GLOBAL: A GENERIC
INDUSTRY STANDARD (cont)
• Designed to meet key generic business needs:
–
–
–
–
–
Target products and companies
Evaluate products and companies
Find early API sources
Identify licensing opportunities
Track competitive developments
• Searchable content includes:
– 10,000 launched APIs
– 18,000 corporate groups and 3,500 API manufacturing
sites
– 92 patent countries
• Incorporates unique intelligence and analysis on
API development
Please Come and Visit Us at our Booth
David Harding
Newport Sales Support Specialist
Thomson Reuters
215 Commercial Street
Portland, Maine 04101
USA
+ 1 (207) 871-9700 x27
david.harding@thomsonreuters.com
James Noh
Sales Manager
Thomson Reuters Asia Pacific
Tel :+82 2 2076 8101
Fax:+82 2 2076 8122
Mobile:+82 18 210 6522
Email: james.noh@thomson.reuters.com