Friday, August 10, 2007

For drug making industry, center of gravity shifts to Asia

The center of gravity for the $643 billion drug-making market is shifting to the Asia-Pacific region from the United States and Europe, according to PricewaterhouseCoopers, and a third of Asia's drug makers want to buy rivals.

More than half of the drug makers based in Asia are looking to enter markets outside the region, including through partnerships and acquisitions, according to a study by the largest accounting firm in the world.

"In addition to becoming the largest market in the world for drugs, led by growth in China, India and Singapore, Asia Pacific is seeing an influx of multinational companies, and its own pharmaceutical companies are bulking up by acquiring international market share," Pricewaterhouse said Tuesday.

The findings are based on a survey of 185 senior pharmaceutical executives, half of them located in China, India, South Korea and six other Asian countries.

The MSCI Asia Pacific health care index, which tracks the region's 31 largest health-related companies, has risen an average of 18 percent a year since 2003, compared with 3 percent annual growth in the S&P 500 Health Care Index, which tracks the 53 largest U.S. health-related stocks.

"There is a dearth of innovation that plagues the pharmaceutical industry, and R&D must become a greater focus," Pricewaterhouse said in the report, "Gearing Up for a Global Gravity Shift: Growth, Risk and Learning in the Asia Pharmaceutical Market."