■ Zuellig Pharma patient solutions■ Asia’s oncology therapy market■ Singapore OTC prospects■ Views from the region

In the newsRecent events and peoplemaking news at Zuellig PharmaAsia Pacific

Closer trade tiesThe impact of the new free trade agreement between South Korea and the EU

The full treatmentFinding the cure for patients who fail to adhere to their medication

Roaring backSingapore's OTC market is faring well as the economy recovers

Tackling cancerHow should the rapidly growing oncology market meet the challenges of Asia Pacific?

in house Views from the regionOur country managers in AsiaPacific speak out on the issuesthat concern them the most

& CompanyInformation about Zuellig Pharma

Issue 51, December 2010. Entire contents © Copyright, 2010. Zuellig Pharma Asia Pacific.All rights reserved. Reproduction in whole or part without express written permission is prohibited.It is hereby expressly stated that neither Zuellig Pharma Asia Pacific nor any of its subsidiaries,affiliates or their respective directors, employees or representatives makes any representationsor warranties, expressed or implied, with respect to any information or materials contained in thispublication. No liability whatsoever, whether in contract, tort or otherwise and including liability fornegligent misstatement, is accepted by any member of Zuellig Pharma Asia Pacific for accuracy orcompleteness of any of the information provided or opinions expressed by or on behalf of ZuelligPharma Asia Pacific or for any errors, omissions or misstatements.

The Market Partner is published by Zuellig Pharma Asia Pacific Corporate Office.Editor: Mr. Joshua Leung, Tel: +86 (21) 5306 0001, jleung@zuelligpharma.comDesign: Blackstone Concepts Co., Hong Kong

Please address any comments to our office: Zuellig Pharma Asia Pacific, Corporate Office, 13th FloorShui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong, Tel: +852 2845 2677, Fax: +852 2877 5647www.zuelligpharma.com

As we draw to the end of another productive year, The Market Partner takes a look forward to new services and developing sectors of the healthcare market that can create fresh opportunities for principals in Asia.

One exciting prospect is a Zuellig Pharma move to step up initiatives on patient solutions, the subject of our Feature Story in this issue. The enterprising venture seeks to improve outcomes for patients and increase business for principals, among other benefits.

With outcomes rather than products likely to be a major driver in the years ahead, pharmaceutical companies will need to widen their collaborations in order to deliver packages of care to patients. As Asia’s leading distributor of healthcare and pharmaceutical products, Zuellig Pharma’s extensive regional network, state-of-the art systems, and local know-how in individual markets puts the company in a strong position to develop a comprehensive portfolio of patient solution services. These may include home nursing and alternate site healthcare as well as patient monitoring and self-management. In addition, collaborative partnerships have long been a part of our core strategy.

Oncology therapies are another area with good growth potential, as discussed in the article by IMS. The sector is building globally, with growth propelled by pharmerging markets. In Asia, containment measures have been appearing, particularly in relation to drug expenditure. Yet, prospects are still promising for those who adopt smart planning, take local conditions into account, and strive for product launch excellence to capitalize on the market.

OTC specialists Nicholas Hall & Company explore the bright prospects for the OTC sector in Singapore. Government promotions to educate and involve individuals in healthcare, a strong-performing economy, and a stable business environment for multinationals to set up a regional base are among the factors helping to create the positive outlook. On the economic front, the Economist Intelligence Unit examines the impact of the recently signed bilateral free

Roland BruhinCEO Healthcare Distribution and CommercializationRolf SteffenCEO Healthcare Services and Investments

trade agreement between South Korea and the European Union in light of fears of growing competition between exporting countries in the current global climate.

At Zuellig Pharma, we have launched our new group-wide Code of Conduct and Compliance Program. As a front-running company in Asia’s healthcare supply chain, we believe it is essential to adhere to the highest ethical business behavior throughout our operations. This move further enhances our established reputation for quality service and transparency.

After 19 successful years with the company, we also pay tribute to Mr. Fred Tsang, Chief Executive of Zuellig Pharma Hong Kong, who retires at the end of December.

In other Zuellig Pharma news, we announced on November 29 that we have sold all of our interest in Zuellig Pharma China to the US healthcare services company, Cardinal Health. As Mr. Bill Meany, Chief Executive Officer of The Zuellig Group, said in announcing this sale: “We are proud of the success of our pharmaceutical wholesaling business in China, but also very conscious of the extent of resources required to participate successfully in a market with significant growth in volumes and consolidation among industry participants. It is for this reason that we believe Cardinal Health has the resources, skills, and commitment to take this business to the next stage of its development.”

Zuellig Pharma remains very focused on the development of its operations throughout the Asia Pacific region and it is investing in growing its well-established healthcare-related business both through strong internal growth and through acquisitions. The leadership of the company will be shared between Mr. Roland Bruhin and Mr. Rolf Steffen.

Wishing you all a successful year in 2011.

The sixth anniversary of Zuellig Pharma Vietnam’s participation in the Fun Run in Ho Chi Minh City drew more than 530 participants from the company, a huge rise on the 22 staff members who initially took part in 2005. The healthy turnout on October 3 is indicative of the team spirit and willingness to assist the community among company employees and their family members.

“We are very happy to see so many of our staff joining the Fun Run,” said Mr. Stefan Heitmann, General, Director, Zuellig Pharma Vietnam. “It is a great event for us to sponsor and take part in given its emphasis on health and fitness.

VP Operations Mr. Suryadi Nagawiguna (left) and Customer Care Manager Mr. Tjatur Donny at the awards ceremony.

ZPV General Director Mr. Stefan Heitmann shares his thoughts on the race.

honor on behalf of the APL team at the award ceremony was Mr. Tjatur Donny, Customer Care Manager. Mr. Suryadi Nagawiguna, Vice President Operations also attended the event. The award indicates the leading position of the APLCare online team not only in Indonesia but throughout the region.

At the Asia Pacific event, held in Bali from October 20-21, APL also presented the concept, strategy roadmap, goals for improvement and achievements for the human resources program upgrade. The enhancement project covered all aspects of operations including

recovery, operations, and training

In February

2009, APLCare online became

a member of the Indonesia Contact Center

Association, providing the opportunity to benchmark

themselves against others in the field. In 2010, APLCare online

led the way at the national contact

center awards competition, winning top honors for Best Manager of a Contact Center below 100 seats and in the Best Human Resources category and a silver award for Best Teamwork.

This sterling performance gave the APL team the chance to represent Indonesia at the Asia Pacific championships which saw 10 countries and regions taking part. In the regional contest, teams competed in three categories: business contribution, technological innovation and human resources. Only one winner for each category was selected.

The Asia Pacific Contact Center Association Leaders (APCCAL) was set up in 2008 as an advisory institute for contact centers in the region. It fosters the exchange of best practice, knowledge and experience within Asia as well as networking opportunities with practitioners in Europe and the US.

In addition to the awards presentation, the APCCAL Expo 2010 included exhibitions from contact center technology vendors, outsourcing providers, and a conference featuring presentations from the leading contact centers in Asia.

As a company, it gives us a chance to contribute to the Vietnamese community in a different way from our daily work.”

Proceeds from the four-kilometer annual Fun Run, which is organized by the British Business Group Vietnam (BBGV), go to a number of different charities in the country. The 2010 race raised a total of US$50,000.

Zuellig Pharma Vietnam also participates in the Terry Fox Run in Hanoi, contributes to the Nguyen Van Huong scholarship fund, and has donated products such as Aquatabs to assist in providing clean water to remote regions and areas affected by flooding.

Zuellig Pharma Vietnam races forward

Award-winning recognition for APLCare online at Asia-Pacific expo

Congratulations to PT Anugerah Pharmindo Lestari (APL), Zuellig Pharma’s distribution company in Indonesia, for its Best Human Resources Program award at the Asia Pacific Contact Center Association Leaders Expo 2010.

The accolade is recognition of the

achievements of the APLCare online team following the initiation of an internal human resources development program to enhance customer care in 2009.

Receiving the

To enhance Zuellig Pharma’s reputation for top-quality service, trust and transparency, the company has successfully launched its first group-wide Code of Conduct and Compliance Program.

The launch was preceded by a comprehensive development process that included an initial risk assessment, developing a business-focused Code of Conduct, producing related compliance policies and procedures and creating targeted training and communication tools.

Over 30 compliance project managers and human resources managers attended the inaugural region-wide train-the-trainer conference led by the Corporate Office in Hong Kong. To date, 7,000 employees across 16 business units and over 10 countries and regions have received a copy of the Code either in English or an Asian language and have undergone training on the related compliance requirements.

“Zuellig Pharma’s leading role in Asia’s healthcare supply chain demands that we uphold the highest standards of ethical business behavior in all areas of operations,” Mr. Rolf Steffen, CEO Healthcare Services and Investments, said. “The launch of the Code and compliance program ensures that the company continues to preserve these values.”

Implementation will also enable Zuellig Pharma to meet the continual changes in the risk and compliance environment in which the company and its business partners operate.

Code Anti-Corruption Policy

Principal Response Protocol

Speaking Up Policy

Conflicts of Interest Policy

Selection, Due Diligence & Engagement of Third Parties Policy

Gifts, Entertainment& Other Benefits Policy

Group Compliance Program

Flexibility and adaptability that result in cost optimization in the Asian market were the key messages delivered by Mr. Georg Schulz, Business Development Director of Zuellig Pharma’s Specialty Solutions Group (SSG), at this year’s leading 8th Annual Clinical Trial Supply East Coast 2010 conference, held in the US city of Philadelphia.

The October event, sponsored by SSG and the premier conference of its kind, attracted more than 200 key decision-makers in clinical trial supply chain management who shared strategies that have resulted in cost savings and greater efficiency.

Mr. Schulz presented a case study illustrating clinical trial supply chain agility and innovation leading to cost optimization in Asia. He pointed out that supply chain tactics have to remain flexible and adaptive due to constantly evolving clinical study dynamics. Such adaptations may include shifting the supply chain strategy from a central depot model to a local depot model to suit the clinical site’s expectations on the lead time for supplies, timely patient dosing, or to adhere to local regulations.

Feedback to SSG showed that the address was greatly appreciated by delegates who applauded

In a significant move, SSG has been granted a zero goods and services tax (ZGST) license and Secure Trade Partnership certification (STP) by Singapore Customs.

ZGST improves cash flow for SSG’s principals by alleviating unnecessary goods and services tax pre-payments, which is especially useful when many of the imported goods are expected to be re-exported, as is often the case in a regional distribution center operation.

With a ZGST license, a warehouse such as SSG’s regional distribution center or central depot is treated as an extension of the Free Trade Zone. This means when goods are moved into a ZGST warehouse from Free Trade Zones such as air and sea ports or imported via land checkpoints, Singapore’s goods and services tax (currently at 7% of goods value) is suspended. The tax is similarly

the Group’s innovative approach. In addition, the organizers invited Mr. Schulz to share SSG’s view in a distinguished panel discussion focused on supplying clinical trial medications to China, India and other emerging markets. The dialogue sought to highlight pitfalls and provide deeper understanding of regulations and guidelines in these countries.

SSG is the leading provider of clinical supply chain solutions in Asia, offering storage and transportation services across its regional network of 14 depots in over 10 countries and regions. The Group has been the preferred partner for sponsors and clinical research organizations in more than 800 clinical trials to date.

suspended when goods are transferred from one ZGST warehouse to another. It only becomes payable when goods are moved from the ZGST warehouse into the local market for sale.

Secure Trade Partnership is a voluntary certification program consistent with the World Customs Organization Framework of Standards to secure and facilitate global trade. To be awarded a STP certificate, a company must be a leader in supply chain security management and related matters. Under STP guidelines, companies are required, among others, to have a security management system, conduct risk assessments of their business operations, and implement the security measures stipulated under the STP guidelines to secure their supply chain.

Certification provides an additional “quality mark” for SSG services. Another key benefit is that principals’ cargo is less likely be inspected or may qualify for reduced inspection or expedited clearance, where such certified status is recognized by countries importing the products. This is particularly advantageous if the cargo under inspection contains cold chain products.

As the leading provider of regional distribution center solutions in Asia, offering a range of value-added services, product customization and anti-counterfeit technology solutions to pharmaceutical and healthcare companies, SSG will seek to leverage these two milestones to further develop innovative services for principals and enhance operational excellence.

Hong KongEffective January 1, 2011,

Mr. Charles Tang will

take up the post of

Chief Executive for the

Zuellig Pharma Hong

Kong distribution business. Charles

replaces Mr. Fredrick Tsang who

has retired (see p.8). Charles joined

the company in September 2010

as Chief Operating Officer and has

been working with Fred on a smooth

transition of duties. Charles has

previously worked in the United

States, Taiwan, Philippines,

China, and Hong Kong for

Coca-Cola, Boeing, John

Deere and Caterpillar. During a

21-year career with The Coca-Cola

Company, his responsibilities included

general management, consumer

and customer marketing, sales and

distribution, wholesaler and distributor

management, and government affairs.

For the past 10 years, his focus has been

primarily on Greater China. He will

report to Mr. Mike Becker, Area Director.

IndonesiaWe are happy to report

that Mrs. Liryawati

has taken up the post

of Vice President New

Revenue Streams at PT

Anugerah Pharmindo Lestari (APL),

Zuellig Pharma’s distribution company

in Indonesia. She previously worked as

General Manager at Beverage Partners

Worldwide, a joint venture between

Coca Cola and . In her new role,

Liryawati will lead a group focused on

generating new revenue across business

segments (ethical, consumer MDD,

agency, market research information,

customer care) and support regional

strategies for patient solutions and retail

management solutions. She reports to

Mr. Santiago Garcia, President Director.

Mr. Ebo Widarisman

has been appointed

Quality and Compliance

Manager. Ebo leads the

team in the areas of quality

management, operations enhancement

and compliance management. He

joins APL from Danone Aqua (PT Tirta

Investama), where his last position was

Scientific Regulatory Senior Manager

responsible for product registration,

compliance and relationship

management with regulatory bodies.

Ebo reports to Mr. Suryadi Nagawiguna,

Vice President Operations.

MalaysiaMr. Nicolas Stadelmann

has joined Zuellig

Pharma Malaysia

as Medical Devices

Manager. He will be

responsible for the new Medical

Devices Business Unit comprising

medical devices warehouse

operations and logistics, technical

support services, and principal and

customer services. Nicolas joins

us from Zuellig Pharma Thailand

where he was previously Logistics

Manager (Outbound) at the Bangkok

Distribution Center. Nicolas has been

with the Zuellig Pharma Thailand since

2006. He reports to Mr Daryl Ong,

Director, Operations.

We are also delighted

to welcome Ms. Reine

Seow as Principal

& Customer Services

Manager (Medical

Devices). Reine has long experience in

customer services, focusing on order

processing, complaints management,

customer satisfaction/relationship

management and inventory

management. Her added

exposure to sales and marketing

for various industries will help

to support principals’ sales and

marketing teams. Reine reports to

Mr. Nicolas Stadelmann, Medical

Devices Manager.

Ms. Chin Pei

Ling has been

appointed Finance

Manager (Financial

Accounting). She will be

responsible for financial reporting for

Malaysia and Brunei. Pei Ling has 18

years’ experience in the field. Her last

appointment was with MOX-Linde and

prior to that she was with BASF Malaysia

for 13 years. Pei Ling reports to Ms. Lee

Kim Har, Financial Controller.

Our new Order

Fulfillment Manager is

Mr. Kenneth Pereira.

Kenneth has been

working in manufacturing

and warehousing for more than 15

years at various companies and his

experience with major ERP systems

such as Oracle 9i and SAP will be a

valuable addition. Prior to joining

Zuellig Pharma, Kenneth was employed

at GWIP in Port Klang as Planning

and Warehouse Manager in charge of

Procter & Gamble operations. Kenneth

reports to Mr. Pang Kim Sun, Associate

Director, Operations (Logistics).

The new Market Partner talents who are responding to the demands of our ever-expanding businesses

Philippines At Zuellig Pharma

Philippines,

Mr. Nilo P. Badiola

has been appointed

Vice President and Chief

Financial Officer. Prior to working

at Zuellig Pharma, Nilo was General

Manager of Transfarma. He was also

previously Finance Director for the

Pharmalink division of Zuellig Pharma

Corporation. Nilo reports to Mr. Mike

Becker, President and CEO, Zuellig

Pharma Philippines.

Mr. Gerardo (Gerry)

Hilario has become

Vice President for

Value Innovations in

the Philippines. He will

also support regional efforts on similar

initiatives. Gerry joined Zuellig Pharma

as Vice President for Modern Trade in

2005. He reports to Mr. Rolf Steffen, CEO

Healthcare Services and Investments and

Mr. Raymond Azurin, Chief Operating

Officer, Zuellig Pharma Philippines.

Also joining the Zuellig

Pharma team is

Mr. Manuel (Manny)

Concio III. Manny brings

19 years’ of diverse sales

and distribution experience

to his role as Assistant Vice President

– Sales Team 2. He has worked for

Johnson & Johnson, Del Monte, and

most recently held the position of Sales

Director at Beam Global Philippines.

Manny reports to Mr. Raymund Azurin,

Chief Operating Officer.

Mr. Rodrigo (Dei)

Bayna has been

appointed Commercial

Manager for the

GB Specialty Logistics

Business. Dei has over 20 years of

professional management experience in

healthcare and pharmaceuticals, with a

solid background in sales and marketing,

business development, strategic and

financial planning and customer

relations. He reports to Mr. Gerry Hilario,

Vice President for Value Innovations.

Metro Drug Inc (MDI) is pleased to

announce that Mr. Wilfredo (“Freddie”)

Madregallejo has become

Vice President for Sales

and Customer Service. In

this role, Freddie will look

after the overall direction,

supervision and control of the Sales and

Customer Service Division. Prior to MDI,

Freddie worked at Baxter, Sanofi-Aventis

and Asiafil Foods Corporation. He

reports to Mr. Christian Eberle, General

Manager, MDI.

SingaporeAt Zuellig Pharma

Specialty Solutions

Group (SSG), Mr. Lucas

Tan has been appointed

Business Development

Manager for Pharma-BioLogistics. Lucas

brings with him five years’ experience in

logistics and supply chain solutions. Prior

to joining SSG, he was Senior Business

Solutions Manager at TNT Express.

Lucas will search for opportunities

among pharmaceutical multinationals

and be responsible for overseeing the

Diagnostics accounts and Japan-based

pharmaceutical multinationals.

Ms. Mayrin Hong has

joined SSG as Business

Development Manager,

Clinical Reach. Mayrin

has extensive logistics and

customer service experience which she

gained over the past 10 years within

third-party logistics companies. Mayrin’s

previous role was Clinical Trial Program

Manager, Asia Pacific at DHL Express

(S) Pte Ltd. Mayrin will initially be

responsible for developing clinical trial

accounts (sponsors and clinical research

organizations) with central depot

potential and will support off-shore

local depot needs. She holds a Bachelor

degree in Marketing and Management.

Lucas and Mayrin will report directly to

Mr. Georg Schulz, Business Development

Director, SSG.

Mr. Terrence Tan has

take up the role of

Logistics Manager at SSG.

In this position, Terrence

is responsible for driving the

efficiency and effectiveness of warehouse

activities to ensure prompt, reliable and

professional service to our principals

and to prepare the warehouse for future

challenges. Terrence has nine years’

experience in warehousing, inventory

management and customer services.

Prior to joining SSG, Terrence was the

Operations Manager for DHL Global

Forwarding (S) Pte Ltd. He reports to

Ms. Yvonne Cheah, Operations Director.

Mr Dave Lai has been appointed

Business Development

Manager, responsible

for planning new

business streams and

value initiatives. Dave

graduated from Nanyang Technological

University of Singapore with a Bachelor

in Engineering with Honors and obtained

a Master of Science in Biomedical

Engineering from the same university in

2006. He reports to Ms. Tan Yan Ann,

Commercial Director.

Ms. Kuar Leong Ngor, previously

Regulatory Affairs

Manager, has moved

to become Customer

Service Manager.

Her new responsibilities

include customer key account

management and managing key drivers

of productivity in the call center to drive

service performance. In addition, she

will oversee tender management to

ensure prompt and accurate retrieval,

preparation and submission of tenders

and quotations. She reports to Ms. Lee

Hwee San, Operations Director.

ThailandWe are pleased to report that

Khun Pairat Saudom

has been appointed

Vice President, Human

Resources at Zuellig

Pharma Thailand. Khun

Pairat was previously Human Resources

Manager at Thailand. Khun

Pairat has 21 years’ experience in the

human resources field in several leading

companies operating in commercial

office and manufacturing environments.

He reports to Mr. Yves Hermes, Chief

Executive, Zuellig Pharma Thailand.

Khun Kongpak

Tatiyathavornkul

has taken on the

role of Credit Control

Manager in the Finance

Division. Prior to joining Zuellig Pharma,

he worked as Credit Control Manager

at JohnsonDiversey (Thailand) Ltd.

Khun Kongpak has a Master’s degree in

Finance from Dhurakijpundit University.

He reports to Khun Pucknalin Bulakul,

Vice-President, Finance.

Khun Sommai Wong-

isara has become

ERP System Services

Manager. He has

a Bachelor degree in

Computer Science from Rajabhat

Institute Uttaradit and more than

16 years’ experience with leading

organizations, such as NEC Corporation

(Thailand), BPB Thai Gypsum, and

ThaiNamthip. He reports to Khun

Somchai Phawanaphon, Vice President,

IT & Business Excellence.

VietnamMs. Dinh Thi Giang

Huong has joined

Zuellig Pharma Vietnam

as Customer Service

Manager. Huong has

previously held managerial positions in

companies such as the Mesa Group and

Colgate & Palmolive and has extensive

experience in supply chain management.

Promotions in the Inventory

Management Group of the Operations

Department have seen

Ms. Nguyen Thi Kim

Thoa step up to become

Inventory Manager.

Kim Thoa joined Zuellig

Pharma Vietnam in 2008 as Inventory

Supervisor. During the past two years,

she has proved her dedication to

delivering good services to internal

and external parties, and shown a

great attitude toward challenges and

solution-finding. In her new role, Kim

Thoa is responsible for overall inventory

management functions.

Both Huong and Kim Thoa report to

Ms. Ngo Hong Mai, Operations Manager.

“Health is wealth” is the maxim that has driven the professional and personal life of Mr. Frederick Tsang (Fred), Chief Executive, of the Hong Kong SAR distribution business of Zuellig Pharma. At the end of 2010, Fred completes an impressive 40-year career in the pharmaceutical industry, including 19 years with Zuellig Pharma. He has decided to retire on December 31.

Fred was born in Mainland China and moved to Hong Kong when he was two years old. He was educated at a school run by the Salesians, a Roman Catholic order. Part of the Salesians’ mission was to educate children from poorer families so Fred’s schoolmates came from diverse backgrounds. Fred was deeply influenced by his school and says that his pragmatic approach to life was formed during his schooldays. He recalls discovering that some of his fellow students came from wealthy backgrounds yet students at this school did not show off their wealth. Fred believes his reputation for being careful with spending and vigilant on cost control may have its roots in his schooldays!

Fred then went on to earn his Bachelor of Science in Biochemistry from the University of Hong Kong

and his MBA from the Chinese University of Hong Kong. With this combination of degrees and an abiding passion for working in a health-related field, it was an obvious choice to enter the pharmaceutical industry. His first job was with the US pharmaceutical company Warner-Lambert (now part of Pfizer) and later Fred worked for Roche and Servier.

In 1992, Fred was recruited to become the CEO for the Zuellig Pharma Hong Kong distribution business. At that time, Fred had moved to Canada where his extended family of four brothers, one sister and his mother lived. However, when the opportunity surfaced to return to Hong Kong, Fred decided to take it. He was already familiar with the company since Zuellig Pharma was the distributor for Servier.

Fred recalls his first year with Zuellig Pharma Hong Kong and the initial challenges to acquire his first new principal. Near the end of those 12 months, Fred achieved his goal, describing it as one of his most memorable moments. Fred’s excitement and pride are still evident today and his passion is a testament to his leadership. Zuellig Pharma Hong Kong has been signing up new principals every year since 1993 and sales are 12 times larger than when he arrived. Zuellig Pharma is now the leading distributor of pharmaceutical products in Hong Kong and has been recognized by Watsons as the “Best Distributor” for the past three consecutive years in the “Watsons Annual Health, Wellness and Beauty (HWB) Awards”.

Fred attributes the company’s success to the combined efforts of all Zuellig Pharma personnel. He speaks with great warmth about the team spirit and total dedication of his colleagues. Everyone, regardless of position, was always ready to go “that extra step”. Fred believes Zuellig Pharma personnel are the most important ingredient in propelling the company forward and he feels everyone has a sense of belonging. Over the years, Fred has worked to build trust and rapport with all industry stakeholders, including principals, customers, the medical community, and the Department of Health. Fred has also served on the Board of Directors of the Hong Kong Association of the Pharmaceutical Industry for many years.

So what does Fred plan to do in his retirement? He will definitely keep in close touch with Zuellig Pharma because he will continue to act as a Director and Executive Advisor to the company. Fred also has several leisure activities in mind including golfing, listening to music, learning to play the electronic keyboards, and photography.

Reflecting on his professional life, Fred notes that while working “it is often not possible to do what one would like to do and, equally, one often has to do things that one would rather not do”. Therefore, the bottom line during his retirement will be “to do what he likes to do and not to do what he does not want to do”!

Zuellig Pharma wishes Fred the best of luck in his retirement and thanks him for his many years of dedicated service. He will be succeeded in the role of Chief Executive for Zuellig Pharma Hong Kong by Mr. Charles Tang, previously with Coca-Cola.

Fred Tsang in 2010 and (right) at the same desk in 1992,

the year he joined Zuellig Pharma Hong Kong.

With rising global fears about mercantilism, a new free trade agreement between South Korea and the EU is a major initiative

After a year-long delay, a bilateral free-trade agreement (FTA) between South Korea and the European Union was finally signed in Brussels on October 6, 2010. South Korea has signed several FTAs, but the EU agreement is significant due to its size and potential. It is the biggest tariff-elimination deal yet for either side. At a time when international economic relations are tense, at least with regard to currencies, the new FTA is both substantively and symbolically important. Jose Manuel Barroso, the president of the European Commission, labelled it “by far the most important trade deal ever concluded by the EU with one country”.

South Korea, for its part, estimates that the FTA will boost its real GDP by 0.6% on an annual average basis over a 10-year period and add over a quarter of a million jobs to the economy. The signing of the FTA also marks the latest step in South Korea’s strategic push to cultivate export markets via agreements with many trading partners. The new FTA with the EU is supposed to come into effect on July 1, 2011. However, given past difficulties with other FTAs, such as those with Chile and the US, there must be some doubt as to whether the two sides will ratify it promptly.

The deal itself looks straightforward. According to the EU, the FTA is supposed to eliminate 98.7% of industrial and agricultural duties within five years. South Korea’s Yonhap news agency reported that the FTA will eliminate 96% of tariffs on EU goods and 99% on South Korean goods within three years.

A key sticking point during negotiations was the automotive sector. Some EU members (most notably Italy) worry about the European market being flooded with small Korean cars, and the new FTA will liberalize this sector more slowly. Tariffs on cars with engines over 1.5 litres will be eliminated after three years, and those on cars with smaller engines after five years.

Unsurprisingly given the sensitivities concerning agricultural trade (and the vocal farming lobbies) on both sides, the FTA also retains tariffs on some agricultural goods, most notably rice. South Korea will keep the right to impose safeguard measures on imported beef. The FTA also proposes some

South Korea’s GDP growth may have slowed

in Q3, to 0.7% quarter on quarter from 1.4%

previously, but this was better than had been

expected. Indeed, since the announcement

of the latest figures, Bank of Korea, the

central bank, announced that it has raised

its 2010 GDP growth forecast to 6% from

5.9% previously.

The domestic economy performed

strongly, with private consumption growth

accelerating to 1.3% quarter on quarter from

0.8% previously. Similarly, gross fixed-capital

formation growth climbed to 3.5% from 0.9%

in Q2. By contrast, government spending

fell by 0.6%, the first decline this year.

Meanwhile, exports of goods and services

rose by 1.8%, less than the 7.2% gain of the

second quarter. However, import growth also

weakened, to 2.3% from 7.4% previously.

Headline GDP was 4.5% higher than a year

earlier, easing from the 7.2% expansion of

the preceding quarter.

The strong economic recovery in South

Korea will be supported by improved business

and consumer confidence. The EIU estimates

real GDP growth in 2010 at 6.1%, boosted by

acceleration in private consumption growth,

Source: Economist Intelligence Unit forecasts

The recovery continues

Economic growth

liberalization of services trade. However, according to Yonhap, restrictions on foreign participation in the education and medical sectors in South Korea will remain in place.

Reaping the benefits?FTAs are invariably accompanied by estimates of how much the economies are likely to benefit as a result. This is an inexact science, but a widely cited South Korean estimate is that the FTA will boost South Korean GDP by around 0.6% a year for 10 years, creating 253,000 jobs in total. According to IMF data, merchandise trade between South Korea and the EU totalled about US$79 billion in 2009. South Korea runs a persistent trade surplus with the EU, which amounted to US$14 billion last year. In comparison, South Korea’s trade with China totalled US$141 billion in 2009, and its trade with the US was worth US$67 billion.

Exports of goods and services account for around one-half of South Korean GDP, so the government is understandably anxious to promote this sector. From a strategic point of view, many in South Korea are likely to regard FTAs as especially important given the increasing global prominence of large and ambitious Chinese exporters. South Korean policymakers also tend to feel that South Korea suffers competitively from being squeezed between high-end Japanese exports and low-end Chinese ones, increasing the motivation to establish and strengthen the country’s footprint in external markets.

Prolific activity on the part of South Korean trade negotiators would appear to reflect this. According to the Ministry of Foreign Affairs and Trade, the government has enacted FTAs with Chile, Singapore, ASEAN, India and the European Free Trade Association (comprising Switzerland, Norway, Iceland and Liechtenstein). In addition to the latest pact with the EU, it has concluded, but not yet ratified, FTAs with the US and Peru. FTAs are also in various stages of discussion with many other countries, including Canada, Mexico, Colombia, Australia and Turkey.

Yet there are many potential obstacles between signing a deal and seeing it implemented. The breakthrough with the EU highlights the long-running stalemate of South Korea’s FTA with the US, which was signed in June 2007. Protectionist lawmakers in the US are blocking the ratification of the FTA as they believe the current deal does not go far enough in terms of South Korea allowing in US automobiles and beef products.

Seeking market shareEfforts to boost exports take on a special resonance

% 2010 2011 2012 2013 2014 2015

GDP 6.1 3.9 4.0 4.0 3.8 4.0

Private consumption 4.2 3.1 3.6 3.8 3.7 3.6

Government consumption 4.0 2.9 3.7 3.7 3.5 3.5

Gross fixed investment 7.0 5.4 3.8 4.1 3.8 3.9

Exports of goods & services 13.6 5.5 5.9 6.4 5.9 6.1

Imports of goods & services 17.7 6.8 5.5 6.6 6.0 5.7

Domestic demand 7.6 4.5 3.7 3.9 3.7 3.7

Agriculture -2.5 2.4 2.0 2.0 2.0 2.0

Industry 12.3 4.6 4.8 5.5 5.5 5.5

Services 2.7 3.5 3.5 3.0 2.6 3.0

strong investment and a pick-up in demand

for South Korean exports. Real GDP growth

will decelerate to a more sustainable 3.9%

in 2011. Growth in 2011 will continue to

be driven by recovering consumption and

investment; the slower pace of expansion will

be largely owing to a negligible contribution

from stock-building, as the rate of restocking

will fall relative to 2010. The contribution to

GDP growth made by the foreign balance will

be negative in 2011, owing to strong growth

in imports on the back of restocking by firms.

Annual GDP growth will average 3.9%

in 2011-15 – a respectable rate, but below

the trend rate of growth of around 5%

in the years following the 1997-98 Asian

financial crisis, and far below the blistering

rates of expansion notched up in the years

immediately preceding the 2008-09 global

financial crisis. The relatively subdued

rate of economic growth from 2011 will

largely reflect the after-effects of the global

financial crisis and the wealth destruction

that occurred in 2008-09. This will prevent

a strong recovery in domestic demand in

other OECD markets, in turn damaging South

Korea’s export prospects.

© Th

e Ec

onom

ist In

telli

genc

e U

nit L

imite

d 20

10

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

20002001

20022003

20042005

100

90

80

70

60

50

40

30

20

10

0

EU-South Korea trade (US$bn)

Source: IMF/Haver Analytics

EU imports from South Korea (CIF) EU exports to South Korea Implied total trade

South Korea trade surplus

20062007

20082009

This article is excerpted from the Economist Intelligence Unit’s ViewsWire service, and from the EIU South Korea Country Report, November 2010. Queries may be sent to David Line, senior editor, at davidline@eiu.com. The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper. The Economist Intelligence Unit provides geopolitical, economic and business analysis on more than 200 countries, as well as strategic intelligence on key industries and management practices. With over 300 full-time professionals in 40 offices around the world, supported by a global network of more than 650 contributors, the Economist Intelligence Unit is widely known for its unparalleled coverage of major and emerging markets.

Unlike many other countries, South Korea has the luxury of relatively strong fundamentals

that may lessen the temptations of mercantilism

in the current global climate, given fears of heightened competition between exporting countries for international market share. In many countries the prospects of domestic demand driving economic growth in the next few years are poor. That the global downturn has largely been synchronized further raises the stakes for exporting countries, increasing the temptation to regard trade policy as a zero-sum game in which one country’s export success is another’s failure.

Unlike many other countries, though, South Korea has the luxury of relatively strong fundamentals that may lessen the temptations of mercantilism. The Economist Intelligence Unit forecasts that domestic demand will grow by an average of around 4% a year in real terms in the next four years (see table on previous page). Moreover, the fiscal position is far stronger than in much of the West. South Korea’s budget deficit this year is likely to be below 2% of GDP, and public debt is only about 24% of GDP, giving the government scope to provide further fiscal stimulus if needed.

Despite this, South Korean attitudes toward free trade remain mixed. Protectionist instincts are strong, especially among farmers and labor unions. So the government has to tread carefully. South Korea’s relatively high trade barriers compared with those of some of its partners further complicate the picture, as they mean that the country stands to give up more in FTA negotiations. For instance, according to the World Trade Organization, South Korea’s average applied tariff in 2008 was 12.2% in total, and a stunning 49% for agricultural goods. In contrast the EU’s average applied tariff was 5.6%, and 16% for agriculture.

F E A T U R E S T O R Y

Finding the cure for patients who fail to adhere to their medication could be a major new source of revenue for pharmaceutical companies

By Jeff Weisel, Program Leader - Patient Solutions, Healthcare Services and Investments ■ jweisel@zuelligpharma.com

The disease has been diagnosed, the drugs prescribed and the

regimen carefully explained to the patient. All that is required now is that the person keeps on taking their medicine. Yet research has found that within 12 months, as many as 50 per cent or more of patients with diabetes or many other serious medical conditions will have stopped taking their medicine as prescribed (see Chart 1).

Patient adherence is among the most difficult and expensive problems that face healthcare systems worldwide. Adherence covers both compliance – following the daily treatment regimen as prescribed – and persistence – staying on the medication as long as required. Today, healthcare providers, payers and pharmaceutical companies are all increasingly seeking ways to monitor patients and keep them fully on track with their medication. The results of not doing so are earlier death, greater morbidity and wasted money. In 2004, Datamonitor found that the annual cost of non-adherence to healthcare systems equated to US$380 billion worldwide.

Solutions to the age-old challenge could not only offer improved outcomes and patient safety but create more than US$30 billion of revenue a year in new sales for pharmaceutical companies, according to Pharma 2020: Which Path Will You Take? a research report by PricewaterhouseCoopers. Now, as part of Zuellig Pharma’s drive to collaborate with business partners across the healthcare value chain through innovative approaches to creating value, the

company is stepping up initiatives on patient solutions that can help principals and other stakeholders move ahead in Asia.

“Zuellig Pharma’s unparalleled presence and experience in the healthcare sector in the Asian region puts us in a leading position to develop new services and solutions in this area,” said Mr. Rolf Steffen, CEO Healthcare Services and Investments. “This exciting new venture seeks to improve outcomes for patients and provide cost-effective outcomes for payers, increase top-line business for principals and enhance service offerings for providers.”

Why patients fail to adherePoor adherence to treatment is caused by a number of factors, both unintentional and intentional. The former includes forgetfulness while the latter is usually driven by perceptions or beliefs about the disease and the medication held by the patients, caregivers and even the physician. To assist patients to be adherent, a variety of methods have been tried to provide support. Many of the solutions hitting the market in recent years have focused on unintentional non-adherence despite this only accounting for 20%-30% of

variance in adherence. With regard to intentional non-adherence, support programs should aim to

understand and change a patient’s beliefs so that they balance perceptions of disease and treatment and form the basis of personal health management by the patient. Patient reasons for non-adherence include:

• Beliefs about extent of personal control (e.g. patient self-efficacy)• Beliefs about timeline (e.g. length of treatment, chronic vs acute)• Beliefs about consequences• Beliefs about treatment effectiveness and controllability (e.g. other drugs may

interfere with effectiveness; some patients may not respond/develop resistance)• Lack of knowledge about disease and treatment • Side effects

In some Asian markets, affordability is also a significant factor in non-adherence as many patients with limited or no insurance coverage simply cannot afford to pay for the full treatment regimen and thus drop off or ration their dosage to sub-therapeutic levels.

Supportive careAs pharmaceutical companies wrestle with the way to secure their business in the era beyond the blockbuster drug, fresh attention is being paid to supporting patients throughout their treatment not only to supplying the medicines to tackle their condition. With strong competition among drug makers and the constant threat of generics, giving the patient added-value service that supports or enhances a particular treatment increasingly appears a positive way to increase brand loyalty.

Critically, more focus on long-term care and better patient understanding of why it is necessary to stay on treatment could help to boost outcomes. For example, a drop-off in adherence frequently occurs when patients do not feel symptoms of their disease, as is the case with hypertension or hyperlipidaemia, and the consequences of non-adherence are less immediate. When treatment appears to be going well, patients often stop feeling the need to continue their medication, a situation that may lead to more serious consequences. If solutions are in place to provide targeted messages and support throughout the course of treatment – and with new communication technologies this is now much more viable – such a situation could be improved.

Home nursing support is another area with great potential for development. Today in most markets such services are often provided by small agencies unable to ensure consistent quality standards or staff continuity with patients. Pharmaceutical companies and hospitals also provide home nursing support but often do not see this as core to their business and have expressed interest in outsourcing to a quality service partner. Patient support call centers staffed by nurses provide further support for programs ranging from home nursing to patient adherence.

Looking more broadly, “alternate-site” care can reach patients at employer sites, shopping centers and even as virtual support for GP clinics, as well in the home. Nursing support can provide sustained specialty care for patients with specific diseases, such as cancer or renal disease, or can deliver targeted health events for institutions.

An example of the latter is Zuellig Pharma’s Mass Vaccination Program introduced this year in the Philippines with expansion to other markets planned for 2011. This program is underpinned by a web platform providing information for patients and employers, payment facilities and scheduling of product delivery and vaccination services.

Patient solutions were the focus of the second RX Dialogue event held in

November 2010 by Zuellig Pharma Singapore. The successful event, entitled

“Patient Centered Healthcare”, brought together the pharmaceutical

industry and government to discuss the current and future trends in this

area of healthcare services, helping to foster dialogue and future links.

The RX Dialogue networking session featured presentations by

Mr. Murali Gangadharan, Director, Health Industries Advisory, from

PricewaterhouseCoopers and Dr Loke Wai Chiong, Program Director,

Health and Wellness Program Office, a joint initiative by the Singapore

government’s Economic Development Board and Ministry of Health.

Mr. Gangadharan gave a thought-provoking talk on trends in relation to

PwC’s Healthcast Program, an in-depth market research program involving

healthcare leaders, consumers and other stakeholders in the healthcare

system. Dr. Loke then provided useful insight into government initiatives

to improve healthcare standards and build more efficient allocation of

resources based on patient health outcomes.

The two speakers were later joined by Dr. Chow Weng Ho, Chairperson,

Marketing Practices Committee of the Singapore Association of

Pharmaceutical Industries (SAPI), for an interesting panel discussion

moderated by Mr. Jeff Weisel, Program Leader, Patient Solutions, at Zuellig

Pharma. The panelists covered a range of topics including the greater role

of IT in shaping healthcare systems of the future, Singapore’s efforts to

create a National Electronic Health Record system, and the potential for

customized services to improve the system.

In attendance were principals’ country heads, senior management in

sales and marketing and medical affairs, and representatives from SAPI,

Singapore’s Health Promotion Board, Economic Development Board, and

PricewaterhouseCoopers.

The RX Dialogue is part of Zuellig Pharma Singapore’s drive to pro-actively

engage in activities to add value for its business partners in line with its market

leading position. The event provided a platform to bring partners together to

talk about issues that are important to all and build understanding.

Overall, 40% of patients will have discontinued the prescribed drug after 12 months

Perc

enta

ge o

f pat

ient

s

Time to dropout (days)

PKC: N~20'000 patients

Patient healthcare in the spotlight

Chart 1 Patient adherence

1.0

0.8

.06

0.4

0.2

0.00 100 200 300

Osteoporosis

HIV

Diabetes

Gastro-intestinal disease

Hypertension

Central-nervous system

Source: Clinical Pharmacology and Therapeutics 2005

As many healthcare systems in Asia are still evolving, they are in a position to leapfrog past the models of

care already established in Western countries

By 2020, the pharmaceutical, payer and provider value chains will be

much more closely intertwined

Chart 2 Pharma 2020: challenging business models

Outcome-based healthcareIndeed, it is outcomes rather than products that are likely to drive healthcare policy and pharmaceutical revenue streams in the future, according to a 2009 report by PricewaterhouseCoopers (Pharma 2020: Challenging Business Models) that analyzed the latest sector trends.

Among the drivers are advances in technology that are opening up new opportunities in outcomes solutions. Personal health management can move online with software that can offer a patient platform and support other programs and devices. Connectivity is adding to the mix, linking up monitoring through communication devices such as smart phones. Providers and payers may also provide platforms for managing personal health data and decisions, with the emphasis shifting toward open platforms rather than proprietary systems.

Further developments have seen diagnostic devices becoming more consumer-friendly, encouraging personal self-management and monitoring. Devices that were traditionally based in the doctor’s clinic such as blood pressure monitors, for example, have been redesigned for patients to use at home and positioned as consumer products.

These trends are rapidly converging as can be seen, for example, with leading blood glucose monitors now able to transmit patient readings directly into a Microsoft Health Vault account or to an iPhone with diabetes management apps installed to enable self-management by the patient.

In line with these trends, pharmaceutical companies will need to seek wider collaborations with healthcare-based service providers to deliver such packages of care rather than working on an individual enterprise basis as is usually the case today.

Asia’s disease management challengeIn Asia, where health management systems are often still evolving when compared with those in Western countries, there is the opportunity to proactively introduce treatment support for patients as part of that evolution rather than through restructuring and add-ons. This would enable better integration of people, organizations and the technologies that will help to deliver patient solutions.

It is also expected that a growing number of people in the region will be in need of individual treatment plans as populations in Asia age, incidences of “Western lifestyle” diseases, such as hypertension, asthma and diabetes, grow, and healthcare costs escalate.

The management of chronic diseases and expensive specialty disease areas, such as cancer, represent one of the greatest strategic challenges for healthcare systems and stakeholders in Asia.

Specific challenges include: • Significant number of patients not adherent with the prescribed treatment

regimen for chronic diseases and cancer• Insurance that pays by episode or not at all, with a reimbursement model

designed primarily for acute conditions and low predictability of costs and little consideration of outcomes

• Fragmented patient and institution information, inhibiting analysis of intervention costs vs outcomes

• Low level of collaboration between providers, suppliers, payers and patients, including the highly unequal relationship between doctors and patients in Asia

• Concentration of healthcare delivery in hospitals which exacerbates cost pressures on disease management.

However, such challenges present openings for pharmaceutical companies ready to seek early-mover advantages. Source: PricewaterhouseCoopers

Payer

Provider

Pharma

Patient solutions service portfolio

For more details on Zuellig Pharma patient solution services, contact Mr. Jeff Weisel, Program Leader – Patient Solutions on jweisel@zuelligpharma.com or +65-6548-1896.

Zuellig Pharma Patient Solutions

Home DeliveryHome Nursing & Alternate Site

Healthcare

Patient Monitoring & Self-Management

Patient Adherence

� Home delivery from pharmacy or prescribing physician

� Scheduled home delivery of products for chronic care patients (e.g. dialysis solutions, nutritionals)

� Mail-in / drop-off diagnostics

� Consumer-oriented monitoring of diagnostic data for chronic disease management (e.g. blood pressure)

� Remote monitoring / alert response for invalid patients

� Integration of patient records with product data

� Mobile health management

� Basic treatment and counseling services in home for specialty care and chronic disease patients

� Patient education and screening at clinics, employer sites with call center follow-on support

� Health events management � Mass vaccination programs for institutional customers

� Health psychology-based solutions to measurably improve patient adherence to prescribed treatments

� Longer-term solutions to deliver sustained adherence support for patients, providers and payers

As many healthcare systems in Asia are still evolving, they are in a position to leapfrog past the models of care already established in Western countries. Just as mobile phones quickly surpassed landlines as the main platform in many Asian countries, it is expected that healthcare will see similar leaps of innovation in the region. There are already examples of “frugal” innovation coming out of India in areas ranging from eye surgery to ultrasound scanners that can radically change the cost structure and delivery model for patient care. Patient support can thus be built around the latest technology as well as innovative business models rather than having to wait for products or services to be proven first in Western markets before introduction in Asia.

With patient numbers set to expand, rising affluence and greater sophistication enabling people to start to “shop” for the treatment they feel will help them the most, there is a great opportunity to move patient-centric solutions forward in Asia.

Collaborative solution-buildingAs noted by the PricewaterhouseCoopers 2009 report, moving away from a product-centered strategy toward “healthcare packages” and outcomes should encourage pharmaceutical companies to see the value of collaborative working that can generate win-win situations for all the companies involved. The success that can result from this mode of working has already become apparent in other fields, led by companies such as Apple and Amazon. Shifts in the healthcare sector, along with the global economy and technological advances, point to the need for similar moves in the pharmaceutical market.

For Zuellig Pharma, collaborative partnerships have long been part of the company’s strategic outlook and this is particularly true in the developing market for patient solutions. With new strategic emphasis on patient solution services, the Zuellig Pharma platform delivers a dynamic operational base to explore opportunities in this area with specialized solution partners.

As Asia’s leading distributor of healthcare products, the company has an unparalleled network that connects manufacturers with more than 200,000 hospitals, clinics and retail pharmacies across the region. Zuellig Pharma’s growing presence in clinical trials services, retail pharmacy solutions and medical devices and diagnostics also facilitates the development of a comprehensive portfolio of patient solution services, ranging from home nursing and institutional health programs to patient monitoring and adherence support.

Working collaboratively on patient solutions can provide pharmaceutical companies with both a new business model and the potential to go beyond the creation and selling of products to capture a wider share of the healthcare market. It opens up significant new avenues for services, creates new opportunities for organizations across the healthcare spectrum and above all provides better support and improved outcomes for patients.

Outlook “Patient solutions are an integral part of Zuellig Pharma’s strategic outlook and are a natural fit for the company’s organizational presence,” Mr. Steffen noted. “World-class customer service and quality management standards, underpinned by state-of-the-art technology and a pool of professionals who combine local expertise with international insight create a very strong foundation on which to build an innovative raft of services. With 70 years’ experience in the healthcare sector in Asia, Zuellig Pharma’s strategic intent is to support better outcomes for patients, providers and payers as well as for our principals.”

While many countries are struggling to recover from the global recession, recent economic indicators have shown that Singapore appears to have done well in 2010. This article looks at how a soaring economic growth forecast and increased consumer confidence may help the Lion City improve on the OTC growth achieved in 2009.

Economy: booming• Consumer confidence up• Economy posts strong growth

Although Singapore is small, it is the epicenter of Asia and most top OTC players have based their regional headquarters there, taking advantage

of the pro-business policies of the Singapore government. In July 2010, the government nearly doubled its growth forecast for the city state’s economy to 13%-15% after it soared by 18% in the first half of 2010. This makes Singapore the front-runner for the fastest-growing economy in Asia, and potentially the world, in 2010. The growth was attributed to new manufacturing and construction projects as well as a good performance from the pharmaceutical industry.

Also in July, Nielsen published its Global Consumer Confidence Index, which recorded consumer confidence in Singapore for Q2 2010 at 112 index points, close to the all-time high of 114 in Q3 2007 and a sharp increase from the low of 80 points in Q1 2009. These positive economic indicators point to a potential boost for the OTC market, with a rise in consumer confidence linked to increased consumer spending.

Government: promotes self-care• Health Promotion Board involves consumers• Self-care encouraged

Singapore’s Ministry of Health has stated: “Good health is to a great extent the responsibility of the individual. But the Ministry plays a major role in educating and providing information to the public on how they can maintain a healthy lifestyle.” Singapore’s Health Promotion Board runs campaigns to raise public awareness of

By Catherine Blood ■ catherine.blood@nicholashall.com

Singapore's OTC market is faring well as the economy recovers from recession

Data in this report, full year 2009 (MSP): Nicholas Hall’s INSIGHT based on industry estimates and Nicholas Hall’s DB6 2010 OTC database, in partnership with Nielsen in specific countries. Based on exchange rate of US$1 = S$1.36 on September 1, 2010 (www.oanda.com).

� Area†: 697km2

� Population*: 5.1mn

� GDP per capita†: US$52,200

� Real GDP growth**: -2%

� Inflation rate**: 0.2%

Socio-economic indicators

Sources: †CIA World Factbook, *Population Reference Bureau, **IMF

health issues and encourages Singaporeans to manage their own health. In July 2009, the Board celebrated its 50th birthday by asking residents to send in videos and pictures that highlighted key milestones in public health over the past half-century. The agency also rewards citizens with prizes for getting involved in health campaigns and has a Facebook page to encourage greater interaction.

Health trends: TCM popularity grows• More TCM centers opened• Working with other countries to standardize

regulations

The OTC market is predominantly controlled by Western medicines, but traditional Chinese medicine (TCM) has been gaining popularity in Singapore. From 2004-07, seven hospitals in Singapore opened TCM centers, and according to a 2009 article in The Straits Times, they have been very well received. In August 2010, the newspaper also reported figures from the Singapore

social networking site Facebook. Consumers were encouraged to buy a pack of Ricola and upload a video, photo or journal entry on www.facebook.com recording their favorite “Ricola moment” for a chance to win prizes including a trip to Switzerland. Other sore throat brands include Strepsils (Reckitt Benckiser), which has been extended recently with Strepsils Cool, and Fisherman’s Friend (GBA Trading for Lofthouse). Free samples of Läkerol’s new ice mint, peppermint and lychee flavors (East Asiatic Company) were distributed to consumers in the central business district in July 2010.

In terms of systemic cold and flu treatments, Panadol (GlaxoSmithKline) comprises several stock keeping units including Cold Relief caplets, Flu Max caplets and Children’s Cold & Flu syrup. Some presentations, along with sister brand Actifed, are limited to pharmacy-only sale, depending on their formulation. This is also the case for certain Decolgen Forte (United Laboratories) stock keeping units while Lemsip (Reckitt Benckiser) products – the majority of which contain paracetamol and phenylephrine – can be sold in any outlet.

King To Nin Jiom Pei Pa Koa (Nin Jiom) is the leading cough remedy – an example of the popularity of TCM. The brand has been promoted with Mandarin television advertisements as well as contests offering consumers the chance to win prizes including tickets to Universal Studios in Singapore. Woods’ Peppermint Cough Syrup (Kalbe) is another strong contender while Breacol (Invida) also competes.

In terms of allergy medications, Zyrtec (licensed from UCB to GlaxoSmithKline) has been promoted with print advertisements and pharmacist detailing, while bilingual advertising for Clarityne (Schering-Plough/Merck) has featured on trains within the MRT transport system.

VMS: fragmented• Multinationals lead vitamins• Blackmores, Kordel’s and Ocean Health popular

ranges

VMS sales grew by 7% in 2009 to S$44 million (US$32 million). Bayer is a dominant player fielding leading vitamin C brand Redoxon, as well as multivitamin ranges Berocca, Nature’s Way, One-A-Day, Supradyn and pediatric ranges Flintstones and Bugs Bunny. The company supports its brands with advertising and promotion, including television and print

Traditional Chinese Medicine Organizations Committee, which stated imports of TCM, health supplements and related products such as ginseng, rose by 45% from 2007-09, increasing from S$1.5 billion (US$1.1 billion) to S$2.2 billion (US$1.6 billion).

The popularity of TCM is evident by its penetration of the mass market and pharmacies, with Watsons and Guardian stocking brands such as Eu Yan Sang, which also has its own retail outlets and clinics. Blackmores struck a deal with Eu Yan Sang in 2010, resulting in some of the Australian marketer’s products being stocked in the TCM specialist’s stores.

The government has recognized the growing importance of TCM and is working with other Asian countries to make sure such products are standardized and regulated appropriately. In November 2009, Singaporean and Chinese health authorities signed the Fourth Plan of Co-operation for the two countries to exchange TCM expertise. Furthermore, in July 2010, Singapore and the nine other member countries of the Association of Southeast Asian Nations established regulations to standardize the region’s traditional medicines and food supplements.

OTC overviewThe Singaporean OTC market grew by 5% to S$165.8 million (US$121.9 million) in 2009, with cough, cold and allergy (CCA) and vitamins, minerals and supplements (VMS) the leading categories. Multinationals remain dominant, namely GlaxoSmithKline, Reckitt Benckiser and Johnson & Johnson.

CCA: medicated confectionery popular• Sore throat remedies and medicated confectionery

benefit from advertising and promotion• TCM leads cough remedies

Cough, cold and allergy is Singapore’s largest OTC category, garnering sales of S$58 million (US$42.2 million) in 2009, with sore throat remedies and medicated confectionery taking the major share of S$37.3 million (US$26.5 million). Such products are marketed primarily as refreshment rather than for the relief of throat pain. They are often positioned by cash registers to encourage impulse purchases.

Ricola (distributed by Shriro) is the category leader, offering many flavors with different positionings, such as soothing or refreshing. The “I love Ricola” competition ran in mid-2009 on website www.ilovericola.com and

� OTC sales 2009: S$165.8mn (US$121.9mn)

� OTC index 09/08 (local currency): 105

� OTC per capita spend: US$23.90

� US$1.00 = S$1.36 (September 1 2010)

� Regulations: medicines must be

registered with the Health Sciences

Authority, a division of the Ministry of

Health

� Distribution: retail pharmacies and

chain drugstores dominate, e.g.

Watsons and Guardian

� Advertising: any advertisement or sales

promotion that relates to, or is likely

to cause any person to believe that

it relates to, any medicinal product

requires prior approval from the Health

Sciences Authority

� Price controls: none

� Reimbursement: none for OTCs

� POM: prescription-only medicine

� P: OTC in pharmacies only

� GSL: General sale list (OTC in any outlet)

Sector overview

Medicine classifications

leading category. The success of the category can be attributed to the advertising and promotion budgets of the multinationals, with Clearasil (Reckitt Benckiser) and Clean & Clear (Johnson & Johnson) two of the main brands. As in many Asian countries, Clean & Clear has been promoted in Singapore with the Best Friend modeling competition where winners from regional heats were entered into the Asian final to win the opportunity to star in a Clean & Clear advertisement.

Dettol (Reckitt Benckiser) is both the leading antiseptic and leading dermatological brand overall. In April 2010, Reckitt collaborated with the Health Promotion Board to teach school children about the importance of hand hygiene. Children received goodie bags holding posters, activity books and Dettol samples. Nizoral (Johnson & Johnson) is the leading scalp treatment, Canesten (Bayer) and Daktarin (Johnson & Johnson) are the main antifungal players while Lactacyd (Sanofi-Aventis) leads feminine washes.

Analgesics: Panaflex launched• Three brands switched• Patch segment spurred by launches

Key developments in the analgesic market are the reclassifications from Rx to OTC (pharmacy-only) of Voltaren Rapid tablets, Oracort E Dental Paste and Keno Oral Paste.

Panadol (GlaxoSmithKline) is the leading systemic analgesic, taking over 80% of category dollars. Presentations include Extend for joint pain, Actifast and Menstrual, although the most recent line extension has been in the topical analgesic category. Panaflex pain relief patch was rolled out in early 2010 and is formulated with camphor, menthol and vitamin E. It has been promoted with Panaflex branded buses, which have offered free rides across the city, plus Panaflex samples onboard.

Haw Par Healthcare, marketer of No.1 topical analgesic range Tigerbalm, reacted to the launch by extending its patch offerings with Tigerbalm Ultra Thin Patch, suitable for aches on smaller areas of the body such as the elbows, knees and shoulder blades. Print and radio advertisements feature the slogan “Feel the relief, not the patch”. Another significant entry is Salonpas, whose marketer Hisamitsu sponsored the Singapore Bay Run and Army Half Marathon in 2009 and 2010. Runners could receive sprays of Salonpas at aid stations throughout the courses.

advertisements in English and Mandarin, plus event promotion. For example, Berocca sponsored the Men’s Health Urbanathlon endurance race in Singapore in January 2010.

Following acquisition of Wyeth in 2009, Pfizer markets Centrum multivitamins and Caltrate calcium supplement. The company has used print advertisements and offers such as coupons and free trials at True Yoga health center to promote Centrum, while special packs of Caltrate come with a “flexercise” band and exercise DVD to help consumers build strong bones and prevent osteoporosis.

Popular longline vitamin and herbal ranges include Blackmores (Blackmores), Kordel’s

(Cambert) and Ocean Health (Ocean Health). The latter is the official supplement sponsor for the Standard Chartered Marathon, held in Singapore in early December 2010. In the run-up to the event, the company promoted its signature product, Joint-RX, as the recommended joint care formula to help participants protect against wear and tear.

Dermatologicals: sales of acne remedies shine• Acne remedies biggest category• Eye-catching advertising for Dettol

Dermatologicals generated around S$24 million (US$18 million) in 2009 with acne remedies the

OTC sales by major category 2009 OTC sales 2007-2009

Cough, cold and allergy

Vitamins, minerals and supplements

Dermatologicals

Analgesics

Lifestyle OTCs

Gastrointestinals

US$ million

120

115

110

105

1002007 2008 2009

109.9

116.6

121.9

35%

26%

15%

12%

7%6%

OTC specialist Nicholas Hall & Company provides business solutions for the worldwide consumer healthcare industry. It operates globally and provides data & analysis, competitive intelligence and strategic advice to multinational companies and local laboratories. The company recently opened an Asia-Pacific Regional Office in Singapore, headed by Veronita Rusli (veronita.rusli@nicholashall .com). Catherine Blood is a Researcher/Writer at Nicholas Hall. She can be contacted at catherine.blood@nicholashall.com. More company details are available at www.nicholashall.com.

on the dangers of obesity and smoking. Between August-October 2009, an obesity campaign included television and press advertisements alerting Singaporeans to health problems linked to obesity. The agency also ran the “Lose to Win” weight loss challenge in the workplace, rewarding participants with prizes worth up to S$3,000 (US$2,205). Another campaign planned for 2010 will incorporate community as well as the workplace. Although the initiatives encourage consumers to lose weight through exercise, increased awareness of the dangers of being overweight may have a positive effect on sales of obesity treatments such as Roche’s pharmacy-only Xenical (orlistat 120mg).

From June-August 2010, a smoking cessation programme to help smokers quit in the run-up to Ramadan. Between August-October 2010, the Health Promotion Board ran the “Come Together Quit Together” campaign to promote a smoke-free environment in the workplace. Quitters could also receive help by joining the Nicorette Quitters 12-week program between July-September organized by Johnson & Johnson, which offered free clinics on smoking cessation and information on Nicorette’s nicotine replacement therapy products. At the end of the program, participants were encouraged to join in a 7.5 kilometer run to show quitters the health benefits of stopping smoking.

ProspectsSingapore’s future looks bright. As many companies look to emerging markets for growth, Singapore’s stable economy attracts businesses wishing to establish an Asian trading base. This will continue to benefit the OTC market as multinationals bring with them innovation, experience and large advertising and promotion budgets. However, the increasing popularity of TCM is also likely to result in higher penetration of the mass market for local marketers. Increased consumer confidence within a society well educated about health issues will mean greater spending on OTCs.

competition for leading laxative Fybogel (Reckitt Benckiser), as the tangerine-flavored prebiotic is available in dissolvable powder format. Boehringer Ingelheim has advertised the line extension on tables in busy eateries with the tagline: “Give your digestive tract a daily massage.” In terms of antidiarrheals, Lomotil (Pfizer) holds the No.1 position, followed closely by Imodium (Johnson & Johnson) and Ultracarbon (Merck KGaA).

Lifestyle OTCs: public campaigns help• Health Promotion Board runs obesity campaign• Smoking campaign ties in with Ramadan

In 2009 and 2010, the Health Promotion Board launched two campaigns to educate Singaporeans

Gastrointestinals: Boehringer Ingelheim launches Dulcofibre • Omeprazole switched• Dulcolax extended

Gastrointentinals is the smallest OTC category, with sales flat at S$24 million (US$18 million). In September 2009, omeprazole in oral solid preparations containing no more than 20mg per dose was reclassified from Rx to pharmacy-only. The introduction of a proton pump inhibitor to the market will provide consumers with another option for treating heartburn. Current offerings include Mylanta, Gelusil (both Johnson & Johnson) and Eno (GlaxoSmithKline). The most recent addition to Boehringer Ingelheim’s Dulcolax range, Dulcofibre, will create greater

Rx to OTC (pharmacy-only) switches 2009/10

Brand/Marketer Ingredients Category Date

Oracort E dental paste/Apotheca for TaroTriamcinolone acetonide 0.1%

and lignocaine HCI 3%Oral pain 13/05/09

Keno Oral Paste/TO Chemicals Triamcinolone acetonide 0.1% Oral pain 01/12/09

Voltaren Rapid tablets/Novartis Diclofenac 12.5mgSystemic

analgesics06/01/10

Minoxidil Lotion/Sunward Minoxidil 3% Hair loss 15/09/09

N/a Omeprazole 20mg or less Antacids (PPI) 30/09/09

In the 2005 edition of Cancer and Its Management, Robert Souhami, a medical oncologist and professor at London’s University College, noted that cancer would soon affect an astonishing one out of every three individuals. It is a statistic that science has steadily challenged in relation to treatment in recent years, with medicines ranging from cytotoxics and targeted therapies to hormonal treatments. Today, therapies such as Gleevec (Novartis) for chronic myeloid leukemia, are measurably changing the prognosis for patients – contributing to a 90% five-year survival rate for those who take Gleevec compared to a 41% rate over the same period of time for those who do not.

While cancer is not a single disease and incidence rates vary worldwide, oncology is an area in which breakthroughs are still possible – and the oncology market maintains its status as an out-performer in a slowing global market. Those who wish to make headway, though, need to pay attention to new trends and possibilities.

What we knowOver the past five years, the global oncology market has more than doubled its rate of growth. In September 2004, according to IMS Health MIDAS, worldwide sales of oncology products totaled US$2.27 billion, a number that had reached US$4.99 billion just five years later.

Those sales are not entirely attributable to the predominant US, European, and Japanese markets. Indeed, pharmerging markets now account for 6% of the sales up from 4% previously. Today, as illustrated in Chart 1, the global oncology market is growing by 3.7%, driven by a 10%-11% growth in pharmerging markets.

Although targeted therapies such as Herceptin, Avastin and Erbitux account for the majority of global growth, standard cytotoxic therapies lead the way in pharmerging countries. And while many familiar multinational corporations continue to dominate the global oncology market,

By Claire Choquet, Product Manager, Oncology, Australia ■ claire.choquet@ au.imshealth.com and David Twinberrow, General Manager, Business Line Management, Asia Pacific ■ davidtwinberrow@cn.imshealth.com

How should the rapidly growing oncology market meet the challenges of Asia Pacific?

four major players have begun to experience a decline, making room for new strategic entrants (Chart 2).

Looking forward, the oncology market, driven by targeted therapeutics, earlier detection, longer treatment durations, and extended indications, will grow to approximately US$75 billion by 2013, according to IMS forecasts (Chart 3).

Of course, healthcare budget issues and patent expiry of important brands could impinge on that growth. So could increasing drug approval hurdles and the growing demand, from many quarters, for proof of substantial, incremental benefits.

Various containment measures are emerging throughout Asia-Pacific with a focus on control of drug expenditure. These include price cuts, international reference pricing, patient co-payment, generic substitution, hospital budget capping, selective reimbursement, prescription

restrictions and health technology assessment. These containment measures are a particular concern for companies bringing relatively high-cost oncology drugs to market.

Nonetheless, the oncology market deserves careful attention, especially in Japan, China, and Australia, which together represent more than 85% of the oncology market share in the Asia Pacific region. Some of the top players are detailed below.

China Fortified by healthy economic development and growing disposable income, China is home to an especially strong oncology market, with a three-year CAGR of 34.9%, according to IMS MIDAS figures (Chart 4). Although only an estimated 70 million can currently afford modern medicines in China, growing disposable income in both rural and urban regions is enabling higher out-of-pocket

for example, is set to lose its exclusivity within the next five years, with sales value estimated at US$32 million (US$19 million from Sanofi-Aventis as direct sales plus US$13 million through their partnership with Baxter Healthcare) at risk. In 2006, the Australian colorectal market was negatively impacted by the emergence of generics that challenged Eloxatin.

Korea The situation in Korea is one of flux, with high-cost oncology therapies set against a rapidly changing pricing and reimbursement landscape. Throughout the country there are ongoing pressures to apply tougher pricing standards. IMS has also seen repeated re-pricing efforts as well as an ongoing overhaul of the National Reimbursement Drug List.

In Korea, pharmoeconomic (PE) evaluation by the Health Insurance Review and Asessment Service (HIRA) is key for reimbursement, and pricing is decided by a system of reference pricing, with partial access allowed to private individuals for non-reimbursed products. The National Health Insurance Corporation sets prices for new drugs. Distribution is carried out via consolidated wholesalers, direct manufacturer distribution to 100-plus bed hospitals, and franchised pharmacy chains.

Taiwan In Taiwan, new Bureau of National Health Insurance (BNHI) reforms have resulted in a challenging environment for multinationals. With the BNHI threatening to fix the payment price for each disease requiring in-patient care, for example, hospitals grow ever keener to use more generic drugs. With the Bureau utilizing PE studies when setting reimbursement prices, the fate of branded drugs will rest on the strength of clinical data. And with a single reimbursement price for all off-patent drugs, multinationals face the possibility of rapid and substantial revenue losses.

OutlookClearly, new oncology products are launching in a complex market – one increasingly defined by generics competition, intensified by growing pressure on costs and pricing, focused on specialty products, inclined toward non-retail distribution, and characterized by better informed patients who seek compelling demonstrations of a product’s value. There is still headroom for growth. But multinationals will have to be very smart in their approach to the Asia Pacific oncology market.

Australia Throughout the Asia Pacific region, 50% of oncology sales are derived from just 10 top molecules – Leuprorelin, Tegafur, Imatinib, Trastuzumab, Paclitaxel, Oxaliplatin, Bicalutamide, Docetaxel, Rituximab and Bevacizumab – and a number of key products are now facing generic pressure.

Australia is among the countries to be impacted by this new generation of generics. Taxotere,

expenditures on healthcare and pharmaceuticals. The future of the oncology market in China will

depend on the evolving reimbursement scenario, as is true for markets around the world. However, it should be noted that in China, randomly selected key opinion leaders hold enormous sway over reimbursement decisions, with the influence of physicians, hospitals, patients, and others paling in comparison. In China, a growing number have also begun to advocate for differential pricing.

Chart 2 Major players in the global oncology market

Chart 1 Oncology market still on the rise

Source: IMS Market Prognosis International 2010

* BRICKMT: Brazil, Russia, China, South Korea, Mexico, Turkey

Source: IMS Health, MIDAS; MAT Dec 2009

The global market is growing by 3.7%, driven by the pharmerging markets (10% - 11%)

Novartis is the second largest oncology corporation globally

Roche leads with high growth on a high base; four in decline

% Growth Constant US$

USUS$ 287bn

CAGR 2009-2013: 0.1%

BRICKMT*Emerging markets

US$ 95bnCAGR 2009-2013: 10%-11% Australia

US$ 7bnCAGR 2009-2013: 1.1%

JapanUS$ 85bn

CAGR 2009-2013: 4.4%

Rest of the worldUS$ 143bn

CAGR 2009-2013: 4%-5%

Top 5EUUS$ 136bn

CAGR 2009-2013:

2.2%

RankUS$ bn

MAT Dec 2009% Market

ShareMAT Dec

20093-YearCAGR

Global Oncology Market 51 .5 100% 5.8 14.0

1 Roche 15.7 30.5% 10.9 19.9

2 Novartis 4.9 9.6% 10.5 17.7

3 Sanofi-Aventis 4.5 8.8% -10.5 3.4

4 AstraZeneca 4.1 8.0% -6.9 3.2

5 Lilly 3.5 6.8% 7.5 12.6

6 Pfizer 2.2 4.4% -11 .2 2.4

7 Takeda 1.4 2.7% 12.9 13.4

8 Merck & Co 1 .2 2.2% 3.6 13.5

9 BMS 1.0 2.0% -4.0 0.4

10 Johnson & Johnson 1.0 2.0% 3.4 27.3

Top 10 39.6 76.9% 3.5 12.6

IMS brings a team of multi-lingual, experienced, and innovative market research experts to the complex oncology market. Exclusive tools include our Oncology Analyzer™, a trademarked data source that features an extensive sample size, strong geographic coverage and dedicated service, and IMS’ proprietary Mapping and Modeling® multivariate analysis technique. Contact Claire Choquet at claire.choquet@au.imshealth.com or David Twinberrow at davidtwinberrow@cn.imshealth.com for more information.

also optimize and adjust throughout the launch by creating a performance-tracking system focused on forward-looking metrics that trigger appropriate contingency plans.

What we thinkThrough our work with pharmaceutical companies throughout the Asia Pacific region, IMS has identified a number of effective approaches for gaining a meaningful foothold in its oncology markets.

One approach involves the intelligent pursuit of extended indications for existing therapies. Such an approach demands the creation of a unique value proposition for the extended indications, the careful selection of comparators for clinical trials, the application of proven tactics to overcome market access and funding barriers, the appropriate delineation of treatment pathways, and collaboration with the right investigators and patients for clinical trials.

For those entering the Asia Pacific region with new therapies, the following success factors should be kept in mind:

• Clinical trial strategy and execution (What is the key opinion leader engagement model? What is the clinical strategy to accelerate approval of the new drug in the APAC region?)

• Regulatory strategy and execution (What is the registration strategy? How will additional indications be achieved?)

• Pricing and market access (What is the optimal price for the drug? What is the reimbursement strategy? What pricing options will broaden access?)

• Commercial readiness (How should the drug be launched? How will new opportunities be tapped? How will tracking and performance management systems be put in place? How will the right people be tasked with the right jobs at the right time?)

Affordability is key and multinationals must therefore be prepared to answer a number of questions by those who fit the bill in the Asia Pacific region. Often, “payer” is defined as the governmental agency. But patients and families are increasingly paying, too. All will seek answers to the following kinds of questions:

• What is the incremental value over the current therapy, especially as it pertains to survival?

• What are the total costs of treatment?• Can the governmental agency afford to pay for it

financially? Can it afford not to pay politically?• Can the patient afford to pay, even with a co-

payment?• Is there a cheaper alternative?

Lastly, whether launching a new indication or an entirely new therapy, multinationals must

commit themselves to launch excellence. This involves engaging with key decision-makers to gain a full understanding of market-value drivers and showcasing the right proof points. Companies must be prepared to adapt to local market conditions by developing and testing pricing/volume models and by instituting a comprehensive, locally optimized plan for key decision-makers. They must align the organization and bridge silos by conducting an evidence-based reconciliation of local launch resource needs, perform a local launch readiness audit, and link contingency plans to implementable solutions. Multinationals must

Chart 3 Oncology market drivers

Chart 4 Leading Asian oncology markets

The global oncology market forecast is ~ $75 billion by 2013

Driven by innovative targeted therapeutics

In Asia Pacific, the top two countries generate 80% of oncology sales

China high growth, Korea and Philippines declining

Source: IMS Health, Oncology Forecast, Jun 2009

Source: IMS Health, MIDAS; MAT Dec 2009

Other factors contributing to growth are earlier detection, increasing numbers of patients on chemotherapy, longer treatment durations and extended indications

Growth may be impeded by healthcare budget issues in the near to mid-term and patent expiry of important brands

RankUS$ bn

MAT Dec 2009% Market

ShareMAT Dec

20093-YearCAGR

APAC Oncology Market 9.77 100% 18.4 18.6

1 Japan 6.44 65.9% 22.2 17.7

2 China 1 .46 15.0% 28.3 34.9

3 Australia 0.58 6.1% 1.1 14.2

4 Korea 0.40 4.5% -4.1 4.5

5 Taiwan 0.36 3.7% 3.3 12.8

6 Thailand 0.15 1 .5% 7.0 20.2

7 Hong Kong 0.10 1 .0% 15.5 23.9

8 Singapore 0.06 0.6% 8.7 18.7

9 India 0.05 0.6% 18.5 33.0

10 Philippines 0.05 0.5% -7.5 15.1

Top 10 9.71 99.4% 18.6 18.7

% Growth Constant US$

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02003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Hormonals CytotoxicsTargeted Non-Biotech Targeted Biotech

A round-up of reports from our offices around the region outlining the news and events that are shaping their businesses and redefining the healthcare industry

The Chief Executive Mr. Donald Tsang

delivered his annual policy address in

October in which he pointed out that

Hong Kong faces the challenge of an

aging population. The proportion of

elderly people is set to rise rapidly over

the next two decades and at a much

faster rate than most other advanced

economies. This will have a far-reaching

impact on the economy, healthcare,

welfare and public finance. The

government has pledged to increase

public health expenditure and to enhance

healthcare services. Additional resources

allocated over the past few years have

reached HK$13.7 billion (US$1.7 billion).

The government will continue to work

toward its objective of increasing

healthcare spending to 17% of recurrent

government expenditure by 2012.

The public generally believes the

government needs to enhance the

sustainability of healthcare but has

reservations about a mandatory

supplementary healthcare financing

scheme. The Food and Health Bureau

has now put forward a proposal for a

voluntary health insurance scheme,

officially known as Health Protection

Scheme, which has been undergoing a

three-month consultation process.

The Health Protection Scheme will

provide the public with the choice

of government-regulated voluntary

private health insurance that offers

better consumer protection for those

who choose to subscribe and enables

them to have sustained access to

private healthcare services. Under the

Scheme, insurers must report annually

all costs, claims and expenses to an

independent monitoring body to keep

premium adjustments reasonable.

They cannot reject high-risk patients

and must guarantee renewal for life.

Policies are portable between insurers

and employers and the maximum

premium would be capped. It will cover

at least half the cost of basic in-patient

services at private hospitals. Out-patient

consultations and cosmetic surgery will

not be covered.

The aim is to encourage people to

switch from reliance on public hospitals

to private healthcare, with the

proposed insurance scheme subsidized

by a government start-up fund of HK$50

billion (US$6.4 billion). Currently, about

2.4 million Hong Kong people have

health insurance. The government

scheme would be sustainable if

300,000 to 500,000 people enrolled.

If the Scheme obtains public approval,

it will be tabled in the Legislative

Council in 2013 and go into effect by

2014.

Frederick Tsang

ftsang@zuelligpharma.com

Fast FactA voluntary government-regulated

health insurance scheme has been

proposed.

GDP growth slowed as exports slowed,

with growth in Asia’s fourth largest

economy halved to 0.7% in Q3 from Q2

but growing 4.5% in the July-September

quarter from a year earlier (Bank of

Korea). The pace of export growth

dropped to just 1.9% from the previous

quarter, when it reached 7%, led by slow

shipments to China. On an annual basis, it

grew 11.5 % compared with 14.9% in Q2.

The Bank of Korea raised interest rates

in November in a move widely forecast

by economists. The rates went up from

2.25% to 2.5%. The increase reflects the

growing concern about inflation.

Market-based Active Trading Partners

(M-ATP) and low-purchase incentives to

hospitals confirmed that cancellation

of the unification law in 2011 is creating

Hong KongCity faces rapidlyaging population

views from the region

KoreaGDP, export growth slows

confusion in the market. Unpredictable

behavior in hospital bidding has already

been observed, and delisting activities

by hospitals based on price is also being

challenged legally by manufacturers.

Given other important reforms to

eradicate illegal rebates through dual

punishment, electronic tax invoicing

and strong coordination between

different government agencies, there

are many changes that will affect the

pharmaceutical market going forward.

As a direct consequence, prices of OTC

drugs are on the rise to balance an

expected reduction of drug prices.

The Korean Food and Drug

Administration is simplifying processes

for clinical trials, reducing phase one

trial timing and allowing submission

of documentation in English only. It

is also creating a database for new

drugs for trials conducted in Korea

and abroad. Korea, China and Japan

are strengthening cooperation and

comparing their clinical trial systems

to seek mutual understanding and

regulatory harmony.

Building on the work done with

our strategic partner KDS, Zuellig

Pharma Korea has engaged other top

distributors to conduct regular business

and operational reviews to improve

efficiencies and reduce waste. As a start

we have focused on sales performance

and the management of peak days.

We are also delighted to welcome

GlaxoSmithKline Vaccine as a new

principal.

Tom Vanmolkot

tvanmolkot@zuelligpharma.com

Fast FactClinical trial processes are being

simplified by the Korean Food

and Drug Administration.

2010 GDP growth has been revised

to 8.15% from the previous forecast

of 6.94%, with the sharp upward

adjustment mainly due to better-than-

expected growth in private consumption,

domestic investment and exports earlier

this year.

According to government statistics,

private consumption grew 4.4% from a

year earlier while domestic investment

jumped 30.8% in Q2. It is estimated

that full-year domestic investment

will rise by 17.3%, a high over the

past two decades. Strong domestic

investment was largely attributed to

government efforts to attract foreign

and overseas Taiwanese investors back

to Taiwan and the possibility of more

Chinese tourists after the signing of

the Economic Cooperation Framework

Agreement in June. The agreement

signaled further liberalization of trade

between Taiwan and China.

GDP growth for 2011 was modestly

estimated at 4.59% in light of worrying

unemployment and a slowing global

economy. Although unemployment fell

from 5.16% in Q3 to an estimated 5.06%

in Q4, it was estimated to average

5.29% for the whole year, which would

fail to meet the administration’s

commitment to contain the rate below

5% this year. It is expected to drop to

4.86% in 2011.

On the healthcare front, the Bureau

of National Health Insurance (BNHI)

and Department of Health continued to

urge the legislature to pass the second-

generation National Health Insurance

bill by year end. The bill has been

postponed due to a failure to reach

a consensus between the ruling and

opposition parties.

BNHI warned that total healthcare

expenditure would exceed the

NT$500 billion (US$16.4 billion) threshold

for 2011 and register per capita

expenses at NT$21,943 (US$800). Total

expenditure has more than doubled

from under NT$200 billion (US$6.5

billion) in 1995, the first year that the

National Health Insurance scheme

was implemented. BNHI attributed

the fast growth of expenditure to an

aging society with increasing numbers

of chronic disease patients and

heavy medical resources for patients

with serious illnesses. The Bureau

emphasized the passage of the bill of

the second-generation insurance was a

critical step for the system to improve

its financing capability to sustain

current quality.

John Chou

jcchou@zuelligpharma.com

Fast FactSecond-generation insurance bill

remains a key issue.

Singapore’s GDP growth has been

revised upward to 13%-15% in 2010

based on strong first half expansion of

18%. The recovery is broad based across

all sectors, particularly manufacturing,

wholesale and retail, and financial

services. Retail growth has been

stimulated by high tourist arrivals. In the

first half of 2010, visitor numbers grew by

a strong 23% year on year assisted by the

global economic recovery and opening

of the integrated resorts. Consumer price

index inflation increased by 3.1% in Q2,

led by higher transportation, housing

and food prices.

The Biomedical Sciences (BMS)

Executive Committee has announced

that the government would invest

S$3.7 billion (US$2.9 billion) in

biomedical sciences research from

2011-15.

The 12% increase over government

investment for 2006-10 is a strong

signal that such R&D remains a priority

in Singapore’s long-term strategy to

boost its economic competitiveness,

achieve sustained growth and establish

the country as Asia’s innovation capital.

The BMS investment is part of the

Research, Innovation and Enterprise

2015 fund of S$16.1 billion (US$12.5

billion) committed to R&D over the

next five years. In line with the

fund’s strategies, BMS funding will

support better integration of research

performers across the BMS landscape;

greater emphasis on translational and

clinical research; and stronger focus on

economic outcomes.

In October 2010, Emergent

BioSolutions Inc., a US-based developer

and manufacturer of vaccines and

antibody therapies, launched its

Singapore operations.

EPIC Bio is a Singapore-based joint

venture with Temasek Life Sciences

Ventures Pte Ltd which seeks to develop,

manufacture and commercialize

pandemic influenza vaccines and

therapeutics.

Medtronic, the global medical

technology leader, has become the

first company to join the Singapore

Medtech IDEAS program. Medtronic,

in partnership with the Economic

Development Board, will establish

a training program at its facilities in

Singapore to provide business and

technical professionals with the skills

needed to assess and consider the

unmet clinical needs of customer

and patients in Asia to assist with the

design, development and manufacture

of medical devices.

Jessie Tang

jtang@zuelligpharma.com

Fast FactSingapore-US joint venture set to

develop pandemic flu vaccines and

therapeutics.

GDP rose by 7.9% in the first half of

2010, a 21-year high. Election-related

public works spending, the resurgence

of exports (up 25.2% in volume) and

strong growth in fixed investment

(up 21.1%) resulting from rising global

and domestic demand triggered the

robust performance of the economy.

GDP will likely slow for the rest of the

year, resulting in a whole-year average

growth of a still respectable 6%-7%.

The Philippine peso continued to

gain against the US dollar, closing

in on the P43: US$1 mark at the

end of Q3 from mid-46 at the start

of the year. Significant inflows of

remittances from overseas Filipino

workers and portfolio investment have

driven peso appreciation. Foreign

views from the region

SingaporeTourist arrivals boost economy

PhilippinesMixed results for Aquino

TaiwanGDP estimaterevised upward

buying made the Philippine stock

market among the Asian region’s

best performers year-to-September,

even as the government’s first peso-

denominated global bond float raised

P44 billion (nearly US$1 billion) for

budget deficit financing. Strong dollar

inflows sustained the build-up in gross

international reserves to US$53 billion

at the end of September.

The first 100 days of the Aquino

government saw mixed results. He

started well with a record trust rating

and an honest drive toward good

governance. But huge challenges

arrived along the way including the

controversial handling of the Truth

Commission, the recall of “midnight

appointees” of the previous president,

and the August hostage crisis on a

tourist bus that led to the death of Hong

Kong tourists. These problems brought

his trust rating from a high of 83% to

60% at the end of his first three months

in office.

On the upside, President Aquino

brought home US$2.4 billion in

investments from a trip to the US

and finally gained approval for the

Millennium Challenge Corporation

Grant worth US$430 million.

In the Philippine pharmaceutical

market, government regulation

continues to weaken the industry

with a new policy that grants senior

citizens exemption from value-added

tax on practically all medicines and

nominated healthcare services.

This is on top of the existing 20%

Senior Citizen Discount they already

enjoy. The new administrative order

will impose compulsory rebates

and the sharing of burden of senior

citizens’ discounts among retailers,

manufacturers and distributors.

Taking into account the impact of the

expanded senior citizens policy and the

previous Maximum Drug Retail Pricing

scheme, the market is expected to post

between 0%-2% by end of the year

compared with 2009.

Zuellig Pharma Philippines

The company has continued to help

the drugstore industry modernize its

retailing practices through its Retail

Management Solutions service. Over

100 drugstores have signed up to

join this innovative program which

includes new store lay-outs, category

management, retail marketing and

retail skills training.

Raymund Azurin

razurin@zuelligpharma.com

Fast FactGovernment regulation continues to

weaken the pharmaceutical market.

Inflation started to accelerate toward

the end of 2010. While Vietnam

enjoyed some of its lowest consumer

price index increases in recent years for

much of 2010, food and related product

inflation are now driving monthly

rates up. The government announced

a number of activities to keep price

increases limited. Among these are

new measures which force foreign milk

producers to register their prices with

the authorities. Analysts have now

increased their consumer price index

forecasts to almost 9% for 2010, with

some suggesting 2011 will go back to

double-digit inflation.

In line with the government push

to stay within set limits, medicine

prices have not increased much over

2010. This and the three devaluations

between November 2009 and August

2010 are putting the pharmaceutical

industry – both domestic (most active

ingredients are imported in US dollars)

and international – into an increasingly

difficult situation. The government

has announced that it will not devalue

the Vietnamese dong further in 2010

from the official rate of 18,932 (with a

ceiling of 19,500) to the US dollar. By

early November, unofficial rates paid at

Ho Chi Minh City money changers had

soared beyond 21,000.

The gap between official and

unofficial rates is largely driven by

demand for US dollars to settle import

invoices due in Q4 2010. The trade

deficit is set to exceed US$1 billion per

month, leading to a huge lack of liquidity

in US dollars at commercial banks. As a

result, most banks are unable to supply

US dollars in any significant quantity at

ceiling rates, thus driving demand at

non-official channels.

Pricing of medicines is also being

discussed in a longer-term policy

setting. The Ministry of Health

circulated a draft which would subject

medicines to a maximum mark-up from

import prices to the price to trade.

The size of the mark-up would vary

based on the price of the medicines.

It would also allow only limited mark-

ups for locally manufactured products.

While this is still at the draft stage,

such mandated price intervention

would create major challenges for the

pharmaceutical industry.

Stefan Heitmann

sheitmann@zuellipharma.com

Fast FactA draft government measure could

create a challenge for pricing of

medicines.

In the first half of 2010, Malaysia’s GDP

growth moderated to 8.9%, compared

with the strong uptrend of 10.1% in Q1,

due to softening in external demand.

On an annualized basis, the government

projects GDP will end the year at 7%.

Under the 2011 Budget, delivered

in October 2010, public-private

partnership (PPP) projects will be

intensified, among them the building

of an Academic Medical Center in 2011.

The project, a joint venture with Johns

Hopkins Medical International and the

Royal College of Surgeons in Ireland,

involves private investment of RM2

billion (US$625 million). It is expected

to promote “cross-fertilization” among

local and foreign medical practitioners,

attracting world-renowned doctors

to pass on knowledge to local doctors,

thereby raising Malaysia’s medical

standards and improving treatment.

In ensuring quality healthcare,

an allocation of RM15.2 billion

(US$4.75 billion) will be made to

build new hospitals and increase the

number of doctors, nurses and supplies

of medicines and equipment. The

government’s target is a ratio of one

doctor to 600 people by 2015 (current

ratio: 1: 900).

The Budget also addressed the

continuing need to provide affordable

healthcare services. Another 25 urban

1Malaysia Clinics for low-income earners

will be established, bringing the total

to 76. Medical services and medicine

are provided free. The latest Ministry

of Health initiative is to launch the

1Malaysia Mobile Clinic to serve remote

areas, estates and villages.

On the pharmaceutical front, the

market registered a drop in growth

for the first nine months of the year.

According to the Pharmaceutical

Association of Malaysia (PhAMA), total

year-to-date September 2010 sales for

participating multinational members

stood at RM2.06 billion (US$642.5 million),

an overall market decline of 2.5%.

Ethical sales reached RM1.84 billion

(US$575 million), a decline of

2.9%. For Zuellig Pharma Malaysia,

principals posted an overall positive

growth of 6.76%, while ethical sales

increased by 5.02% for year-to-date

September 2010.

The Ministry of Health recently

announced that private healthcare

providers (hospitals, clinics and

dental clinics) could now advertise

their facilities and services in all

media, locally and abroad, following

liberalization provisions under the

Medicines (Advertisement and Sales)

Act 1965. The move was in line with

the government’s decision to promote

health tourism in Malaysia and raise

the number of foreigners coming

to Malaysia by 20% annually from

336,000 visitors in 2009.

In Brunei, the IMF projected the

Sultanate’s economy would grow

by 0.5% this year and 1% by 2011 as

the world economy recovers from

recession.

Malaysia and Brunei have agreed

to make it easier for patients to move

across the border to seek treatment in

Malaysia& BruneiBudget seeks to enhance healthcare

VietnamInflation on the rise again

views from the region

emergency cases, particularly to the

Limbang district (northern Sarawak)

as the closest health facility handling

serious cases is located in Miri, Sarawak.

Maikel Kuijpers

mkuijpers@zuelligpharma.com

Fast FactAnother 25 1Malaysia Clinics for low-

income earners will be established.

The Asian Development Bank has raised

its Indonesian forecast to 6%, among

the highest of G20 members along with

China and India, but the slowest of the

region’s major economies. The consumer

price index reached 6.4% year on year

to August set against 6.2% at the end

of July. Food was still high at 13% but

down compared with July. In May, the

consumer price index stood at 3.9%.

Indonesia’s local currency bonds are

up 15% in 2010 after a 22% gain in 2009,

the best of Asia’s 10 largest economies

ex-Japan (HSBC Indices). With growth

over 6%, the rupiah strengthening,

foreign exchange reserves at historic

highs, direct investment levels steadily

increasing and commodity prices stable

to strengthening, the Indonesian

economy is strong and the prospects for

steady growth for the next two to three

years are high.

The IMF is calling on Bank Indonesia

to take a proactive approach to keep

rising inflation pressures in check. In its

annual review of Indonesia, completed

in October 2010, the multilateral agency

noted that inflation expectations for

2011 were currently at the top end of

the central bank’s 4%-6% target range

and could move higher, suggesting the

need to raise interest rates from their

current historical low of 6.5%.

So far, Bank Indonesia has opted

to raise bank reserve requirements

rather than hike rates to manage

inflation. The IMF also highlighted

the need for further financial sector

reforms to reduce risks from a future

global financial meltdown. It suggested

the need to quickly pass legislation

creating a new bank regulatory agency

separate from Bank Indonesia and a

financial system safety net law. Both

are currently under deliberation. The

agency also reiterated the importance

of reducing energy subsidies and

reallocating government funds for

infrastructure and social spending.

Kadin, the influential Indonesian

Chamber of Commerce and Industry,

elected Suryo Bambang Sulisto as the

new chairman at its national congress.

Suryo was previously head of Kadin’s

advisory board. He is currently president

commissioner of top coal mine company

Bumi Resources and founder of the

Satmarindo Group which has business

interests in oil and gas, mining, steel

manufacturing and palm oil. Following

his election, Suryo underscored his

intention to work with the government

to pursue policies that would support

the business community and regional

and national economic growth.

Santiago Garcia

santiago.garcia@aplcare.com

Fast FactIMF calls for proactive measures to

manage inflation.

Since the military crackdown on “red

shirt” protesters in May 2010, the

coalition government of Prime Minister

Vijjajiva Abhisit has continued its firm

hold over the country. Emergency

decrees have been extended in most

parts of Thailand, including Bangkok,

where emergency rule was prolonged

until December.

The appointment of General Prayuth

Chan-ocha, a strong monarchist, to

the post of army commander-in-chief

is expected to be followed by similar

announcements, which should provide

military unity and solid support for the

government in the next 12 months.

With elections due at the end of 2011,

the other key objective of the current

government is to gain sufficient popular

support to win office, a major challenge

considering the widespread support that

the “red shirts” enjoy outside Bangkok.

Strong economic recovery continues,

with good growth apparent in many

sectors. Consumer spending is up

5.5% on last year, fixed investment

has risen 12.5% over the previous

year while manufacturing is 20.4%

higher and construction shows a 7.1%

improvement.

The Thai baht’s appreciation against

the US dollar (+10% at the end of

October) may reduce GDP growth by

0.7%. But overall growth of 6.8% in

2010 is still expected if the impact

of recent floods remains below 0.1%

of GDP. However, the IMF has cut its

2011 forecast for GDP growth to 4%

from April’s 5.5%. This may reflect the

uncertainties ahead for Thailand as

well as the partial reduction of fiscal

stimulus disbursements.

More than half of state hospitals

are suffering from serious financial

problems. Many of them are operating

at a loss and unable to pay doctors’

salaries, reflecting the fact that the low

per-capita subsidy under the universal

coverage and social security schemes

does not cover the actual costs of

treating patients.

This situation may deteriorate

further if the government goes ahead

with its plan to let civil servants use

their benefits at private hospitals,

which would reduce profitable income

from the Civil Servant Medical Benefit

Scheme at state hospitals. At least

50 private hospitals have submitted

applications to join the scheme. The

Public Health Ministry permanent

secretary said he would urge the

National Health Security office to

allocate two billion baht to ease

the financial stress these medical

institutions currently experience, even

though this would not represent a long-

term solution to the under-funded

healthcare system in Thailand.

Yves Hermes

yhermes@zuelligpharma.com

Fast FactMany state hospitals are operating

at a loss and cannot afford to pay

doctors’ salaries.

GDP growth in the current fiscal year

may reach 6.3%, propelled by strong

domestic demand, according to an

Asian Development Bank report. The

government expects GDP to grow at 6.7%.

Export growth for the first two

months (July-August) of the current

fiscal year stood at 28.8% compared

with the same period last year. Imports

also expanded by 36% during the same

period, mainly due to more imports of

food grains, petroleum products and

capital machinery.

Foreign Direct Investment (FDI)

made a comeback in Bangladesh from

January-June, 2010, with an increase

of 23% year on year set against a 66%

drop from July-December in 2009. FDI

fell 34% over the entire fiscal year in

2009-10.

The inflation rate was 7.31% though

the government target had been

set for 6.5% in fiscal year 2009-

10. The rate was 6.68% in 2008-

09. Meanwhile, the bull run on the

country’s stock exchanges saw indices

touching new highs.

For the first time in 10 years,

remittances have taken a downward turn.

In the first three months of the current

fiscal year, remittances fell by about 2%.

Remittances had previously increased

every year since 1990, with the exception

of 2000-01. They have risen by 10%-32%

in the past 10 years. Last year, remittances

grew by 13% to reach US$11 billion.

In the healthcare sector, the domestic

pharmaceutical industry saw the

entry of one more local player, Novus

Pharma, and has continued its double-

digit growth.

Shailendra Bobhate

sbobhate@zuelligpharma.com

Fast FactThe domestic pharmaceutical industry

continues to strengthen.

BangladeshFDI returns tothe country

ThailandEmergencyrules remain

IndonesiaStrong economicprospects

CorporateZuellig PharmaAsia Pacific1303, Shui On CentreNo. 6-8 Harbour RoadWanchai, Hong KongTel: +852 2845 2677Fax: +852 2877 5647

ContactsMr. Roland BruhinCEO Healthcare Distribution and CommercializationZuellig Pharmarbruhin@zuelligpharma.com

Mr. Rolf SteffenCEO Healthcare Services and InvestmentsZuellig Pharmarsteffen@zuelligpharma.com

Ms. Elaine J. CheungChief Financial OfficerZuellig Pharma Asia Pacificecheung@zuelligpharma.com

Mr. Douglas StantonChief Human Resources OfficerZuellig Pharma Asia Pacificdstanton@zuelligpharma.com

Mr. Michael BeckerArea DirectorZuellig Pharmambecker@zuelligpharma.com

Ms. Jessie TangArea DirectorZuellig Pharmajtang@zuelligpharma.com

Mr. Joe DaviesRegional Logistics ManagerZuellig Pharmajdavies@zuelligpharma.com

Mr. Giuseppe LeoChief Executive,Specialty Solutions GroupZuellig Pharmagleo@zuelligpharma.com

Mr. Jeff WeiselProgram Leader - Patient SolutionsHealthcare Services and InvestmentsZuellig Pharmajweisel@zuelligpharma.com

Country officesZuellig PharmaBangladeshMr. Shailendra BobhateGeneral ManagerZuellig Pharma Bangladesh Ltd.Tel: +880 (2) 988 4454sbobhate@zuelligpharma.com

Hong Kong & MacauMr. Frederick TsangChief ExecutiveZuellig Pharma Ltd.Tel: +852 2856 3632ftsang@zuelligpharma.com

IndiaZuellig Pharma (India) Private Ltd.Tel: +852 2845 2677help@zuelligpharma.com

IndonesiaMr. Santiago GarciaPresident DirectorP.T. Anugerah Pharmindo LestariTel: +62(21) 345 6008santiago.garcia@aplcare.com

KoreaMr. Tom VanmolkotPresidentZuellig Pharma Korea Ltd.Tel: +82 (2) 2006 0600tvanmolkot@zuelligpharma.com

Malaysia & BruneiMr. Maikel Kuijpers Chief ExecutiveZuellig Pharma Sdn. Bhd.Tel: +60 (3) 5566 2288mkuijpers@zuelligpharma.com

PhilippinesMr. Michael BeckerArea DirectorZuellig Pharma CorporationTel: +63 (2) 908 2222mbecker@zuelligpharma.com

Mr. Chris EberleGeneral ManagerMetro Drug Inc.Tel: +63 (2) 837 8661ceberle@metrodrug.com

SingaporeMs. Jessie TangArea DirectorZuellig Pharma Pte. Ltd.Tel: +65 6546 8188jtang@zuelligpharma.com

TaiwanMr. John ChouGeneral ManagerZuellig Pharma, Inc.Tel: +886 (2) 2570 0064jcchou@zuelligpharma.com

ThailandMr. Yves HermesChief ExecutiveZuellig Pharma Ltd.Tel: +66 (2) 656 9800yhermes@zuelligpharma.com

Vietnam & CambodiaMr. Stefan HeitmannGeneral ManagerZuellig Pharma Vietnam Ltd.Tel: +84 (8) 910 2650sheitmann@zuelligpharma.com

For information about Zuellig PharmaAsia Pacific or any of its business entities,please contact the Corporate Office:

Zuellig Pharma Asia Pacific1303 Shui On CentreNo. 6-8 Harbour RoadWanchai, Hong KongTel: +852 2845 2677Fax: +852 2877 5647Email: help@zuelligpharma.com

The Market Partner: company background

Zuellig Pharma Asia Pacific

With a history of more than 60 years in Asia, ZuelligPharma has forged a reputation as the leading provider ofdistribution solutions for the pharmaceutical industry in theregion. Our cutting-edge services cover end-to-end supplychain management, including inventory management, warehousing, distribution and customer order management,among others. Taking advantage of our extensive expertise,pioneering technological innovations and state-of-the-artfacilities allows manufacturers to focus on their own coreexpertise. A scalable infrastructure supports the marketingdrives of our principals and our collection services reducecountry risks for individual principals.

We provide the largest direct account coverage in all healthcare channels in Asia Pacific, employing over 1,000 sales representatives to support the activities of our principals in the trade channel. Advanced information technology tools, such as zip-online, an innovative sales and inventory tool, give principals full transparency for all transactions.

Our world-class facilities operate in strict accordance with rigorous quality management standards, setting industry benchmarks of excellence. We continuously refine and implement the latest technological advances in our on-going drive to offer the best services to our principals and clients.

zip-online® is our regionalprincipal informationplatform offering timelysales and inventoryinformation, best practicesin analysis and reporting,and diverse forms ofbenchmarking.

AsiaRx® is our exclusiveregional Internet-basedpharmaceutical marketplacethat connects customersand principals in innovativeways. For principals, it is anew connection to customerbehavior, integratedwith other channels andoffering complete supplychain information. For customers, it saves them timeand money, and gives themthe control necessary to runtheir businesses better.

Pharma Industries has along-established history inproviding contract manufacturing services to theAsian pharmaceuticalhealthcare industry throughits operations in Thailandand the Philippines. Witha client base of over 50multinational companies,and over 1,200 formulationscurrently in production,the Philippines plantof Pharma Industries isthe largest, most advancedcontract manufacturingfacility in Asia. The group’sThai operations are certifiedto the same top GMPstandards, providing manufacturing services to over 30 research-based companiesfrom around the globe.

Affiliated Companies

Invida is a leadingpharmaceutical and healthcare marketing specialist in the Asia Pacific region. The company is a wholly owned subsidiary of Asia Pacific Pharmaceutical Holdings, a joint venture between Interpharma Investments Ltd, Quintiles Transnational Corp and Temasek Holdings (Private) Limited.

The Specialty Solutions Group (SSG) is a pioneeringregional consultancy and bio-logistic services division ofZuellig Pharma. Strategically based in Singapore, SSGleverages Zuellig Pharma’s cutting-edge RegionalDistribution Center and pan-Asia coverageto provide customized, added-value bio-logistics forpharmaceutical, clinical trial, medical device, diagnosticand other healthcare-related companies.

For more information about Zuellig Pharma,please contact: jleung@zuelligpharma.com