Myanmar’s Pharmaceutical Industry – Promising Growth
Visit any physician’s clinic or hospital in Myanmar and the bag of medicines handed over at the pharmacy is inevitably full of tablets and capsules that have been imported. A closer look at the label will reveal the name of an Indian, Thai, Bangladeshi or Chinese pharmaceutical company. This is not surprising in a country where domestic industrial production is in its nascent stages and even more so in the pharma sector which has only 4 local pharmaceutical production units. In sharp contrast, are the hundred odd distributors of foreign drug companies, importing over 5000 types of western allopathic drugs. Inevitably local demand for medicines and health supplements is fed by imports.
Medicines are lifesaving, lifestyle-changing, health improving magical potions taken to cure illnesses and maladies, alleviate moods, and generally set right, all that is going wrong physiologically and psychologically in our system. The aim is a longer, improved quality of life, reduced pain and suffering, and of course, a huge monetary loss, since medicines are not cheap. The key to health and wellness in Myanmar lies in access to medicines manufactured in one of the neighboring ASEAN nations or far off European countries.
The healthcare industry is one of the fast growing, high potential sectors that needs reform, extension, and improvement to ensure better healthcare facilities so as to prevent the outflow of patients to other countries. The pharma sector is one part of the larger healthcare sector which incorporates all the drugs, medicines, tonics and injections needed for treatment and health improvement.
For the country’s population of 57 million, per capita expenditure on medical needs is low and access to medical care is difficult in rural areas where people have to travel long distances to get treatment and medicines. According to the World Health Organization, 93% of all medical expenses are borne by patients themselves since government cover and health insurance have yet to be initiated.
Unlike other countries where pharmacies, drug stores and medicine shops are seen around every corner, the number of such medicine outlets in Myanmar is very small. It is customary for all doctors’ clinics, polyclinics and hospitals to provide medicines, and they have their own sources of procurement from a network of preferred distributors. Over 60% of drug sales take place in the two big cities, Yangon and Mandalay.
According to market research agencies the total pharmaceutical expenditure in Myanmar has been growing at 11-12% per annum, and has increased from USD 390 million in 2014 to USD 440 million in 2015. However, these values are lower than most ASEAN nations including Singapore whose population is one tenth that of Myanmar. Growth prospects with governmental initiatives are high and the market is expected to touch USD 1.12 billion by 2023.
However, most of the pharmaceutical products sold come from countries like India, Bangladesh, China, Indonesia, Pakistan, Thailand and Vietnam. Research figures indicate that total pharmaceutical imports accounted for 85% of the drug market and India takes the lead with a strong 40-45% market share.
All imported drugs have to be registered and authorized by the FDA that inspects pharmaceutical plants and importers and also tests the quality of drugs. At present, approximately 5000 drug varieties are imported into Myanmar.
There is a vast market for generic drugs and all types of prescription drugs including steroids and antibiotics can be purchased over the counter. This is responsible for big Indian companies like Sun Pharmaceuticals, Dr. Reddy’s and Cipla capturing a significant market share of the local market. Another reason for the success of Indian companies is the lower price levels they can be procured at, compared to bigger international brands. When funding is not available and the patient has to pay out of his pocket, cheapest options are sought – and this comes from Indian manufacturers. India also happens to be a neighboring country and trade across the border also takes place. Additionally, doctors and physicians are comfortable prescribing affordable Indian medicines since they are trusted for quality.
The role of traditional medicine
The belief in turning to nature to heal and cure, is strong in Myanmar. Traditional medicine treatments have been followed for generations and continue to be popular, more in remote rural areas, not least due to non availability of western (allopathic) medicines. Herbs and medicinal plants are found in abundance and serve as highly affordable remedies for diseases. According to statistics provided by the World Health Organization, nearly 75% of Myanmar’s population still uses traditional medicines for healing and wellness.
However, there is increasingly a distinct preference for western medicines subject to affordability and availability. This is because they feel the quality is better and they also have a higher efficacy than local herbal products. Traditional medicine cannot also be used for life threatening diseases, where western medication and treatment becomes imperative at least for those who can afford it.
Domestic production and the distributor network
The country’s own pharmaceutical industry is grossly underdeveloped with most of the local supplies, accounting for only 20% of the demand, come from the state owned Myanmar Pharmaceutical Factory that comes under the purview of the Ministry of Industry. The factory has been set up to manufacture tablets, capsules, injections, powders and lotions to initiate the import substitution process. A single private play er named Fame Pharmaceutical has a GMP certified facility but produces herbal and organic medicines used to treat serious diseases like cancer and tuberculosis. Its product range includes 45 different kinds of herbal medicines that are exported to countries like Japan, Thailand, Singapore, Taiwan and South Korea.
There are over 100 pharmaceutical distributors operating in Myanmar, whose sales force manage to reach even the most remote corners of the country. Significant among these are distributors like the Swiss owned DKSH and Maxxcare which distribute both prescription and over the counter drugs. DKSH has a strong presence in many Asian countries and in addition to drugs, is also a distributor for medical devices. The company has been operating in Myanmar for 15 years, having established a network of 60 sub-distributors through whom its products reach 19000 retail outlets, has 7 warehouses, including 2 with cold chain capabilities. This reach of DKSH makes it the preferred choice for multinationals like Roche, Bayer and Sanofi to expand their sales without having to be concerned about compliance issues. Maxxcare has also created a towering presence in the pharmaceutical world and is the first distribution company that has received ISO 9001:2000 certification, and its sales force has access to the most remote parts of Myanmar. Some of the pharmaceutical brands under the company include Lupin, Novartis, Pfizer, GSK, MSD and Kalbe.
Pharmaceuticals-promise of growth
Awareness about health is increasing among the Myanmar people and the growing middle class is veering away from traditional medicines towards western drugs, due to their conviction about their quality and efficacy. This demand is being met through imports and the biggest volume of imports is of vitamin C tablets and antibiotics. Price remains an issue but manufacturers know the limited paying capacity of local customers, and therefore keep their prices at lowest possible levels. Additionally, drugs that reach the market through cross border trade come at cheaper prices.
International pharmaceutical companies are flocking into Myanmar since they see a barely tapped market of over 57 million people. Official figures indicate a USD 100- 120 million, but pharma specialists put the figure at USD 400 million since data available is based on customs value and not on the actual sales volume, and figures not incorporated are the illegal cross border trade and the under reporting of goods actually brought into the Myanmar market.
New hospitals with foreign private participation are coming up. Under the new rules formulated by the government the healthcare sector will permit 70% foreign ownership in clinics and hospitals. This has attracted private hospitals like Bumrungrad and Bangkok Hospital to set up representative offices and Samitivej Hospital has tied up with Parami Hospital to set up an international clinic which promises services that match international standards. Efforts are on to improve medical college education as well. The healthcare industry is getting an impetus from the government as well through increased allocations in the budget, and relaxation of rules for foreign investment.
The market is expanding in terms of the quality and range of drugs available, to include supplements and some of the newer, safer drugs. For the first time perhaps, the residents of Myanmar have the luxury of choice. It is only a matter of time before we see local manufacturing begin and people of Myanmar getting the entire range of the latest drugs in local markets, no longer needing to travel overseas for treatment, or having to carry back packages of medicines from trips abroad.
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