Biologics In Asia: From Manufacturing Hubs to Market Growth - What Pharma Must Do Next

What key trends are you observing in the Asian pharmaceutical market that signal a significant rise in biologics compared to traditional pharmaceuticals?

One key trend definitely is the emergence of manufacturing for biologics. Even though chemical manufacturing of Small Molecules has been concentrated on China, we see that countries in the Asia region are leap-frogging these technologies and directly establishing themselves as manufacturing hubs for Biologics, for example Korea and India, but increasingly also Singapore, Malaysia, Thailand, and Indonesia. Across the spectrum of biologics, for Monoclonal Antibodies, mRNA Vaccines, recombinant Proteins and Cell&Gene Therapy, companies are establishing development and commercial production capabilities, some with original products, and many as CDMO. Especially in the “upstream” part of biologics manufacturing, there are many similarities across all these classes of biologics, even for allogenic Cell& Gene Therapy, which should be very beneficial for technological development. I believe the region has a strong potential both for Innovative Products and for Biosimilars; for the latter, the cost advantage of local manufacturing should be a major driver. On the other hand, biologics are also reaching more patients in Asia, so the importance of the region as a market is growing, although unevenly across the countries. Reports show the healthcare spending on biologics across the region growing significantly, with over 10% - 15%. Finally, clinical trials have been expanding - while Korea is one of the leading countries worldwide for biologics clinical trials, countries such as Singapore, Malaysia or Vietnam are establishing themselves in this space, and I expect this will further contribute to technology development and to market demand as well. Clearly, Biologics are taking off across Asia!

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From your perspective, what unique characteristics of the Asian market will shape biologics supply chain strategies especially when it comes to regulatory diversity, infrastructure maturity, and economic variation across the region?

The diversity of the Asia region is significant, also compared to other regions. While in the countries already mentioned, the growth of biologics is helped by favorable regulatory environments and well-developed infrastructures, as well as highly trained professionals being available, other countries are lagging behind, and some countries are not living up to their potential. Infrastructure development is of course strongly linked to economic development and thus will continue to be country specific on the regulatory side, it should be much easier to develop as a region. While I have long trusted in regional initiatives, especially ASEAN, to achieve alignment of customs regulations, lowering tariffs and non-tariff trade barriers, and especially harmonizing pharmaceutical regulations, progress has been slower than I had expected. I still believe that, mid to long term, ASEAN will be much more closely integrated - the ASEAN Pharmaceutical Regulatory Framework could be a game changer in this area, and this has made me more optimistic again! In the meantime, regional strategies for Biologics will still be very much country by country. Having said that, I believe that Regional Distribution Centers with late-stage customization do have significant benefits in Biologics and can serve as cornerstones in a regional strategy. I would also hope that Korea, as one of the pharma and biologics powerhouses of the region, aligns with ASEAN to further strengthen the region.

Temperature sensitivity is a well-known hurdle for biologics. In your view, what are the most pressing cold chain challenges in Asia’s diverse climates and infrastructures — and what technologies or strategies can help overcome them?

Large parts of Asia are in the most challenging climatic zones IVa and IVb, and combined with uneven availability of GDP compliant infrastructure, this is a major challenge. Companies, and countries, must focus on developing distribution networks that are able to maintain the temperature conditions across the entire supply chain, up to the patient. Networks of temperature-controlled warehouses that meet global GDP standards, where necessary with independent power generation capabilities, and good access to transportation, are essential for this. Often, this is already the case for large urban areas, but many countries in the region need to further develop this infrastructure for smaller urban areas, rural areas and finally to remote areas, eg mountains and islands. In areas where it would not be economically viable for individual Logistics Service Providers to build those warehouses, innovative solutions such as shared warehouses should be pushed by industry associations and health authorities. The last mile is challenging, not only in hard-to-reach areas, but also for urban metacenters with major congestion issues. Active and passive controlled temperature, including cold chain, packaging and containers have seen a significant development of technologies, and have also become more affordable in many cases, which is an important improvement. However, the issue often remains that reaching patients and healthcare facilities might involve multiple transit steps, each introducing a potential risk for temperature fluctuations, so the transport network itself must be optimized. I do also expect that track and trace technologies, such as GPS enabled sensors with real time connection to cloud based monitoring solutions, coupled with 24/7 command and control towers, and Supply Chain digitalization and transparency, will play a key role here.

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What strategic priorities should pharma companies in Asia be focusing on now to future-proof their biologics supply chains? Whether that’s investments in digital tools, talent, or partnerships.

With a high adoption rate of digital mobile technology in the region, digital tools are promising, in many areas of application, and definitely should be used also to make the biologics supply chains more agile and more transparent. As mentioned, I believe that sensors that measure multiple parameters, such as Temperature, Humidity, Shock, location and transmit it real time to monitoring solutions are a key element for Biologics Supply Chains in the region. This should be further complemented by digital systems that span advanced planning and distribution planning and execution, making the Supply Chain more agile. Partnerships should also be high on the list of strategies, as it will remain challenging to cover the entire, diverse region every company on its own. In fact, partnerships along the supply chain, but also with other companies that are active in different indications, hold a high potential for synergies. I believe that industry associations can play a key role whenever there are investments needed that would not be sustainable for a single company, eg for building GDP compliant warehouses to be operated by a neutral third party serving multiple Logistics Service Providers, in rural areas. Talents will remain a key driver of development, and pharma companies should work together eg in establishing university chairs and institutes for applied technology or sponsoring specific education programs. The pharma industry requires highly specialized technical skills, and it makes sense to work together on this.

Some experts argue that Asia’s fragmented infrastructure and regulatory landscape could slow biologics adoption significantly compared to Western markets — do you think the region is at risk of falling behind, or could it leapfrog traditional models?

The importance of the right regulatory framework, providing unambiguous and state-of-the art guidance, cannot be overstated, when it comes to developing the biologics industry at a country and regional level. Since most individual countries are still relatively small players at a global level, the regulatory landscape indeed needs to be much more integrated to really drive the development of the entire region. It must be setting globally accepted standards such that the work done in the region is accepted and recognized globally, this is a pre-condition for commercial success in and beyond the region. Ideally the goal should be a single agency like the European Medical Agency; this is maybe too far off, but as a long-term objective, it would orient the development in the right direction. As mentioned, the ASEAN Pharmaceutical Regulatory Framework could be a game changer in this area. In absence of this, some pioneering countries like Singapore will have to maintain comparable standards on their own, which they certainly are able to, but this would leave other countries in the region behind, and even those pioneering countries would benefit from being part of a more powerful region.

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Is the pharma industry overly reliant on technology as the “fix” for biologics supply chain challenges, rather than addressing deeper structural weaknesses like infrastructure gaps or cross-border collaboration?

Technologies are always a shiny new tool, and over reliance on them is a risk. Having said that, the development in technologies, often digital such as cloud-based monitoring systems but also in other, complimentary areas (eg sensors, passive cooling solutions), has been so rapid that it really becomes a game changer and makes many things possible that were unviable in the past. In the end, many if not most technologies require widespread adoption to be really useful, so standardization and integration is very important. I would encourage companies to develop ambitious technology roadmaps, making sure that these technologies deliver benefits, but at the same time work with industry associations on standardizing and adopting common technologies. Also, as mentioned, I believe that for the Asia region, cross-border collaboration and alignment is an essential component of success, and companies should support this whenever they can; but on those topics, political and regulatory leadership across the countries has a decisive role to play. It’s therefore very important that the Pharma industry engages with governmental bodies, at the country and at the regional level, to shape development.

Looking ahead, what’s your overall outlook on the preparedness of the Asian pharmaceutical industry for the biologics era — and what’s the one key takeaway you’d offer to industry leaders preparing for this shift?

Both as a manufacturing region, and as a market for Biologics, Asia has a bright future ahead, but it requires countries and companies to work together, with the vision of establishing regional advantages rather than everybody trying to succeed on their own. Biologics pose new challenges in Manufacturing, Transportation, Distribution, compared to many small molecules therapies, and only by working together, with a common vision, across pharma industry, service providers, and regulators, at the country and at the region level, Asia can live up to its potential.

Our contributor:

Frank Binder,  Founder,  GSCA - Global Supply Chain Advisors