Thailand's Pharmaceutical Industry: Tackling Dependence and Boosting Security
Thailand's pharmaceutical sector struggling with high dependency on imports and escalating expenses
Thailand's pharmaceutical sector continues to grapple with pressing challenges, primarily its excessive dependence on imported active pharmaceutical ingredients (APIs). With production costs under constant pressure due to significantly high energy prices and rising expenses related to upgrading facilities to meet international standards, the tide seems to be against the industry.
According to an analysis by the Office of Industrial Economics (OIE), the production and sales volumes of pharmaceuticals in Thailand experienced a significant decline in the first nine months of 2024, dropping by 7.2% and 8.5% respectively compared to the previous year. This downward trend was mainly attributed to a sluggish demand from both domestic and international markets.
Facing these challenges, the profitability of pharmaceutical businesses has taken a hit, and competition from low-cost pharmaceutical imports-particularly from China and India-tightens the squeeze even further.
Pharmacists: The Backbone of Thai Pharmaceutical Security
Pharmacists play a pivotal role across various levels of the pharmaceutical industry, including manufacturing, quality control, marketing, and the provision of medicines in hospitals and pharmacies. Pornsak Sriamornsak, dean of the Faculty of Pharmacy at Silpakorn University, stated that assessing Thailand's pharmaceutical security requires consideration of whether the country can rely on its own capabilities, especially during emergency situations such as a pandemic.
Pharmacists are engaged in every phase of the pharmaceutical value chain, from initial drug development to the final stages of pharmaceutical services in hospitals and retail pharmacies. Most pharmacists are currently working in research and academic fields, while industry competition, drug pricing, and regulatory oversight are typically handled by the private sector, the government, or other relevant agencies.
Balancing Access to Medicine with Fair Pricing
Price competition in the generic drug market has forced hospitals and public health institutions to favor lower-priced medicines, several domestic pharmaceutical manufacturers into a frantic race to the bottom. Though this competition has kept medicines affordable, it has also eroded profit margins, making investment in research and development nearly impossible.
Pornsak believes a delicate balance is needed, keeping medicine affordable without compromising the ability of the private sector to reinvest in research and development.
Strengthening Thailand's Pharmaceutical Security
Creating a robust and self-reliant pharmaceutical sector is crucial for Thailand's pharmaceutical security, and various strategies are being employed to reach this goal:
1. Domestic API ProductionThailand plans to bolster its domestic production of APIs, ultimately aiming to reduce import dependency. Investing in pharmaceutical infrastructure, research, and development is important to build a self-sufficient supply chain within the country, mitigating risks from global supply chain disruptions.
2. Strengthening Regulatory FrameworksThe government is expected to strengthen policies and regulations that support pharmaceutical security, which includes helping local pharmaceutical companies with incentives, enforcing quality standards, and improving capabilities of domestic API producers through technology transfers.
3. Promoting Generic Drug ManufacturingThe generic drug market in Thailand is anticipated to account for around half the total pharmaceutical market by 2034, indicating a strategic shift towards cost-effective, locally produced medicines that rely on domestically sourced APIs. This move is expected to reduce dependency on expensive imported drugs and ingredients.
4. Regional and International CooperationAlthough primarily aimed at combating illicit drug trafficking, Thailand's collaboration with neighboring countries like Laos illustrates a commitment to transboundary cooperation. Such cooperation could potentially expand to include pharmaceutical supply chains, bolstering security through shared resources and intelligence.
5. Economic Stimulus and Funding AllocationReallocating government budgets to prioritize strategic sectors, including pharmaceuticals, is essential to broader economic plans. For example, substantial funding is being directed towards health and drug-related initiatives, which could include enhancing pharmaceutical production capabilities and infrastructure.
These strategies collectively aim to create a resilient pharmaceutical sector capable of withstanding external shocks and ensuring uninterrupted access to essential medicines through increased domestic API production and regional cooperation.
- In an effort to tackle excessive dependence on imported active pharmaceutical ingredients (APIs), Thailand is investing in domestic API production, striving to reduce import dependency.
- Pharmacists, being involved in various stages of the pharmaceutical value chain, are crucial for Thailand's pharmaceutical security, particularly during emergency situations.
- To maintain medicine affordability without eroding profit margins for the private sector, it's essential to strike a delicate balance in price competition, prioritizing investment in research and development alongside affordable medicines.
- Recognizing the importance of regional cooperation, Thailand aims to expand collaboration with neighboring countries in pharmaceutical supply chains, bolstering security through shared resources and intelligence.
