Asian countries can offer great value as locations for clinical study sites. This is the third of a five-part series on getting the best out of your Southeast Asia clinical trial strategy. In Part IIa, we focused on South Korea, the biggest country in the so-called “Tier 2” Asian countries. This article (Part IIb) will address the rest of the Tier-2 countries – Taiwan, Singapore and Hong-Kong. Later, in Part III, we’ll move on to discuss the Tier-3 Asian countries.
Let’s continue with our discussion on the "Asia first" clinical development strategy for biotech start-ups to add value rapidly by quickly generating human data. In Part IIa, we laid out the case for going first to South Korea, the largest of the Tier-2 Asia countries. What about the remaining Tier-2 countries, Taiwan, Hong Kong and Singapore?
Unlike South Korea, the answer to the question, ’Are Taiwan, Hong Kong and Singapore ideally suited for the “Asia first” strategy?’ is a resounding “maybe!” The two most important criteria for a successful “Asia first”strategy would be:
- An attractive local environment that must be conducive for conducting cost-effective and economically sustainable new drug R&D for both domestic and global markets, and
- The capability to conduct early stage (Phase I) clinical trials
Pharma Market Considerations
Promotion of domestic R&D requires a well-developed pharmaceutical sector that is highly profitable. A fundamental criterion then is for the country to have a large pharmaceutical market potential with minimal commercial restrictions such as price controls and other regulatory hurdles. While these conditions exist in South Korea, this is a major challenge in Taiwan, Hong Kong and Singapore. At 23 million, Taiwan has roughly half the population of Korea. Hong Kong and Singapore have even smaller populations of 7.2 million and 5.6 million, respectively. According to GlobalData, the Taiwanese pharmaceutical market was estimated to be $5.4 Billion in 2013 and is expected to grow to $8.4 Billion by 2020. This makes Taiwan the twentieth-ranked market in the world, compared to South Korea, which is the tenth largest worldwide and the third largest in Asia (estimated at $18.2 billion in 2015 and expected to reach $20.4 billion by 2020).
Clearly, from a market size perspective, Taiwan perhaps is better positioned than either Hong Kong or Singapore, which are even smaller markets. So, for purposes of this discussion, it would be fair to rule out Hong Kong and Singapore from a market perspective.
Getting back to Taiwan, even if one finds the market size to be reasonably attractive, there are a host of other conditions that serve to dampen innovative new drug R&D activity in the country as elaborated in the June 2015 White Paper published by the American Chamber of Commerce, Taipei. Some of these issues are: (i) long times for new drug approval (e.g., 726 days for new cancer drugs), (ii) government mandated price controls with an uneven price reimbursement review process, and (iii) lower drug prices compared to US and A10 developed countries (Australia, Belgium, Canada, France, Germany, Japan, Switzerland, Sweden UK, and US).
Drug prices in Taiwan are about one third of average US prices and 52 percent of the median for A10 benchmark developed countries. In Taiwan, the healthcare budget is tightly managed through a policy of cutting drug prices. In 2014, for example, a deficit in the healthcare budget led to an average price cut of 5.3 percent for over 6,000 drugs.
For an investor in a US / EU-based biotech company, dealing with the FDA or EMA to obtain new drug approval is bad enough. But, when you add to that government regulations on pricing, reimbursement, etc., it would be a major disincentive to support an “Asia first” development strategy rooted in Taiwan.
Phase I Clinical Trials (Potential Gateway to China)
While the pharma markets and domestic R&D environment in Taiwan, Hong Kong and Singapore may not be as attractive as investment opportunities for new drug development, there is a strong case to be made for initiating early stage (Phase I) clinical trials in these countries.
A recent search in the ClinicalTrials.gov website using the search terms “Phase 1 AND Country Name” yielded the following statistics for open Phase I trials:
*Note: The USA number of 21,285 Phase I Studies was obtained using the default search term “Phase 1” excluding any country name 
The Tier-2 Asian countries have about two- to three times fewer Phase I studies per capita versus the USA benchmark. Compare this, however, with China, where there are 15- to 30-fold fewer Phase I studies per capita compared to the Tier-2 Asian countries.
These countries could serve as potential "gateway" opportunities to enter China. Hong Kong is officially recognized by China State Food and Drug Administration for conducting clinical trials for drug registration in China for certain therapeutic areas. Trial data from Hong Kong may be used for filing new drug applications in China. Likewise, Taiwan and China have signed an agreement to jointly develop the biotechnology industry and facilitate the development of new drugs and clinical trials.
Hong Kong also hosts an international conference on Phase One and Early Phase Clinical Trials (ICPOEP). Singapore has committed several Billion dollars dedicated to building up biomedical R&D in the country, including a Translational and Clinical Research (TCR) Programme.
There is a good reason why Taiwan, Hong Kong and Singapore belong in the “Tier-2” category. All three countries have established strong reputations as viable destinations for international, multicenter clinical trials, and are competitive with Korea and Japan. They are all driven by the same success factors outlined in the first two articles of this series, such as strong central government backing and the adoption of ICH-GCP guidelines. Additionally, they include training programs for investigators, well-established infrastructure of medical institutions and trained staffing, and English-language skills and acceptability for documentation.
*Ramani A. Aiyer, PhD, MBA is the Principal at Shasta BioVentures, San Jose, California, USA. To post comments to the author, Ramani can be reached at: email@example.com
PHOTO CREDIT: Nicholas Raymond via Flickr Creative Commons