Taiwan, No Longer a Life-Sciences Island Unto Itself

Although dwarfed in size, both geographically and from a pharmaceutical-market perspective compared with its Asian neighbors of China and India, Taiwan is making a concerted effort to build its life-sciences industry. The government is fostering the country's biotechnology sector through public and private financing, promoting innovator-drug research, and attempting to bring its intellectual property and drug-regulatory practices in better alignment with global standards.

(TAIWAN EXTERNAL TRADE DEVELOPMENT COUNCIL)

Targeting biotechnology

In March 2009, the Taiwanese government launched the "Biotechnology Takeoff Package," which is designed to develop the country's life-sciences industry, according to the Taiwan External Trade Development Council (TAITRA). The plan focuses on four major areas:

• Strengthening the industrial value chain and preclinical development in the commercialization process

• Establishing a biotechnology venture-capital fund

• Promoting an integrated incubation mechanism

• Creating the Taiwan Food and Drug Administration (TFDA) to bring the regulatory practices of Taiwan's medical-device and pharmaceutical industries up to international standards.

To foster preclinical development and other aspects of the pharmaceutical value chain, the government said it will strengthen the ability of research institutions such as the Development Center for Biotechnology and the Industrial Technology Research Institution to engage in drug translational research and the development of medical devices. The government plans to establish a national biotech incubation center, the Supra Incubator Center (SIC). SIC is being developed in tandem with the creation of Hsinchu Biomedical Science Park in Hsinchu, Taiwan Province, which will focus on medical devices, and the National Biotechnology Science Park in NanKang in Taipei County, which will focus on biopharmaceuticals. Other biotechnology-based science parks in Taiwan are Agricultural Biotechnology Park (Pingtung County), Taiwan Orchid Plantation (Tainan County), Chiaya Herbs Biotechnology Park (Chiayi County), and Marine Biotechnology Park (Yilan County). An interactive map details the locations of these parks and other locations for pharmaceutical and biotechnology activity in Taiwan.

On the investment front, the biotechnology venture-capital fund will be jointly formed using private and public funds. The Taiwanese government plans to contribute 40% and private investors 60%. NT$10 billion ($294 million) will be used to start the fund. The government hopes to double the country's annual production value for biotechnology within the next four years.

This effort follows the adoption of tax and financial incentives by the Taiwanese government to encourage research and development (R&D), training, education, and collaboration between industry and academia in biotechnology, according to TAITRA. The measures also allow researchers in state-run research institutes to take an equity position of more than 10% in a newly established biotechnology company.

Several organizations promote the country's life-sciences industry, including the Biotechnology and Pharmaceutical Industries Program in Taiwan's Ministry of Economic Affairs, the Taiwan Pharmaceutical Development Association, and the Taiwan Pharmaceutical Manufacturers Association, which facilitates collaboration between China and Taiwan. Another group, the International Research-Based Pharmaceutical Association (IRPMA), established in 1992, consists of 43 research-based pharmaceutical manufacturers from Europe, Japan, and the United States with a presence in Taiwan. IRPMA consists of major pharmaceutical companies such as AstraZeneca (London), Abbott (Abbott Park, IL), Boehringer Ingelheim (Ingelheim, Germany), Bristol-Myers Squibb (New York), Eli Lilly (Indianapolis), GlaxoSmithKline (London), Merck (Whitehouse Station, NJ), Novartis (Basel, Switzerland), Pfizer (New York), sanofi-aventis (Paris), and Wyeth (Madison, NJ).

Pharmaceutical outsourcing

In a recent PricewaterhouseCoopers (PwC) analysis, Taiwan ranked fourth as a destination for pharmaceutical outsourcing in Asia, trailing only China and India, which respectively ranked number one and two, and Korea, which was rated third (1, 2). The ranking was based on a weighted index that factored in costs (compensation, infrastructure, tax, and regulatory), risks (geopolitical, human capital, economic risks, legal, and infrastructure), and market opportunity (current and future needs of the aging population, pharmaceutical market size and growth).

Taiwan's positive ranking is a result of government policy to develop its biotechnology industry, drug-development activities, and broaden the use of contract research organizations (CROs). In 2000, the country replaced local registration requirements for clinical trials with bridging evaluations that followed international standards, according to the PwC report (1). This action provided the framework for multinational companies to consider Taiwan in its clinical research activities, but also provided opportunity for domestic CROs. The government also introduced tax incentives to encourage Taiwanese pharmaceutical companies to employ CROs. CROs were also given the right to represent sponsor companies in applying for investigational new drug applications under a new drug approval system, which was introduced in 2007, as a means to make the drug-approval process more transparent and efficient (1).

These efforts have made some inroads. Taiwan is competitive with other Asian countries in its clinical-trials activities based on a review of open clinical trials from ClinicalTrials.gov, a registry of federally and privately supported clinical trials in the United States and globally. Taiwan had 772 open clinical trials as of Apr. 13, 2009, compared with 607 in Korea, 573 in China, and 398 in India, according to ClinicalTrials.gov (3). Big Pharma, however, is a lead sponsor in only a handful of these trials. A review of the top 20 pharmaceutical companies shows Pfizer with the greatest number of open clinical trials (26 trials) conducted in Taiwan in which a Big Pharma company is a lead sponsor. GlaxoSmithKline and Bristol-Myers Squibb have the next highest totals, each with 18, followed by Roche (Basel, Switzerland) with 14, and Boehringer-Ingelheim with 12 (3, 4).

Multinational and domestic CROs are building their presence in Taiwan. In 2007, Parexel International (Boston) acquired the Taiwanese CRO Apex International Clinical Research for NT$1.7 billion ($50.9 million). Parexel, with annual sales of approximately $1.3 billion, is one of the largest global CROs, and Apex was one of Taiwan's largest CROs at the time of the acquisition. The Japanese CRO EPS (Tokyo) opened a branch in Taiwan in 2007 and the CRO CMIC (Tokyo) also has operations in Taiwan.

The number of suppliers of pharmaceutical raw materials and intermediates and contract manufacturing organizations (CMOs) in Taiwan is still small compared with the number in China and India, which are more established in the pharmaceutical supply chain. One measure of this difference is the number of exhibitors from these respective countries at CPhI Worldwide, the large international trade show of pharmaceutical ingredient suppliers, which includes pharmaceutical and chemical suppliers and manufacturers. At the 2008 show, which was held in Frankfurt, approximately 430 exhibitors were from China, 200 from India, and only 13 from Taiwan. Table 1 lists select CMOs from Taiwan.

Table I: Select contract research and manufacturing organizations in Taiwan.

ScinoPharm Taiwan (Shan-Hua, Tainan Country) is a leading Taiwanese CMO providing process R&D, custom synthesis of early-phase materials, and manufacturing of generic APIs. It was founded in 1997 by two former executives at Syntex, a pharmaceutical company acquired by Roche in 1994. Jo Shen, president and CEO of ScinoPharm, was formerly corporate vice-president for pharmaceutical technology and operations at Syntex. Hardy W. Chan, executive vice-president of ScinoPharm Taiwan, was formerly Syntex's vice-president of research and director of biotechnology.

The Taiwanese government holds a 16% stake in ScinoPharm, and the US generic-drug manufacturer Watson Pharmaceuticals (Corona, CA) hold 31%. Watson invested nearly $47 million between 2004 and 2006 to increase its equity position in Scinopharm, according to Watson's 2007 annual filing. In addition to its primary API manufacturing facility (which operates under good manufacturing practices [GMP]) in Tainan City, ScinoPharm operates facilities in China. These facilities include process R&D laboratories and a kilo-scale laboratory in Kunshan, Jiangsu Province, and a manufacturing facility in Taicang, Jiangus Province. Its Chinese operations provide process R&D of API intermediates, scale-up, and nonGMP manufacturing.

Information resources

A plethora of information resources are available for life-science companies and their suppliers interested in doing business in Taiwan. Below is a resource list provided by TAITRA:

• Biotechnology and Pharmaceutical Industries Association Program Office, Taiwan's Ministry of Economic Affairs (MOEA) is responsible for promoting and implementing the government's biotech-related plan and strategies and serves as the international communications vehicle for the industry. www.biopharm.org.tw

• Overseas Chinese Affairs Commission coordinates with overseas Chinese businesses and facilities business and investment processing. www.ocac.gov.tw

• Department of Health, Executive Yuan is Taiwan's highest level health administrative body and is responsible for health-administration affairs for the nation as a whole and for instructing, monintoring, and coordinating regional health bodies. www.doh.gov.tw

• Industrial Development Bureau, MOEA is responsible for industrial development strategies, polices, and related matters such as financial and tax measures, industrial pollution prevention, guidance on industrial security, factory management, and general industrial administrative management. www.moeaidb.gov.tw

• Intellectual Property Office, MOEA is responsible for patent examination, trademark administration, copyright protection, intellectual property rights, and related information. www.moeaipo.gov.tw

• Board of Foreign Trade, MOEA provides economic and trade information, import–export services, international and regional economic and trade promotion. www.trade.gov.tw

• Industrial Development and Economic Investment Center, MOEA promotes Taiwan as an investment destination to overseas investors. www.idic.gov.tw/spring.html

• Department of Industrial Technology, MOEA is responsible for researching and planning industrial technology development strategies, overseeing technology project budgets, promoting the development of high-technology industries, and upgrading of local industries. http://doit.moea.gov.tw.

• Economic Processing Zone Administration, MOEA is responsible for investments in designated zones, engages in foreign trade and sales, company registration, and affairs relating to labor, construction, and land. www.epza.gov.tw

• Department of Commerce, MOEA is responsible for drawing up of business policies and laws, business planning, managing, guiding, monitoring, and researching business contracts, business taxes, and business registration. www.moea.gov.tw/~meco/doc/ndoc/default.htm

• Investment Commission, MOEA is responsible for overseas investments, technological collaborations, and examination of foreign investments. www.moeaic.gov.tw

• Hsinchu Science-Based Industrial Park Administration is responsible for investments, locating land and factories, research-development grants, and personnel training. www.sipa.gov.tw/index_apis.php

• Taiwan External Trade Development Council (TAITRA) provides customized trade and investment services to domestic and overseas enterprises. www.taiwantrade.com.tw/cgi-bin/bv60/TWTRADE/index_tc.jsp

• Overseas Chinese Enterprises Commission promotes joint ventures between overseas Chinese firms and local companies.

• Taiwan Venture Capital Association conducts surveys to local and overseas venture capital industries, lobbies on behalf of the industry, serves as a bridge between members and high-technology companies,and provides investment-related industrial information to members. www.tvca.org.tw

• Taiwan Pharmaceutical Development Association promotes the development of production technology, research and development, business management, and international exchange to enhance Taiwan's pharmaceutical industry.

• Taiwan Pharmaceutical Manufacturer's Association is responsible for increasing the quality and stability of locally produced pharmaceutical products, works on research and development of new medicines, promotes the industry, strengthens overseas collaboration and investments, expanding overseas markets, and provides communication between the pharmaceutical industries of Taiwan and China. www.tpma.org.tw.

• International Research-Based Pharmaceutical Manufacturers Associations consists of US, European, and Japanese pharmaceutical companies doing business in Taiwan. www.irpma.org.tw

• Biotechnology New Drug Industry (Enacted on 2007/06/15) (http://lis.ly.gov.tw/npl/fast/02814/960614.htm)

For information on Taiwan's recent efforts to strengthen protection of intellectual property, see the online exclusive, "Taiwan Seeks to Strengthen its Intellectual Property Goverance"

References

1. PricewaterhouseCoopers, "The Changing Dynamics of Pharma Outsourcing in Asia," (New York, NY, 2008).

2. A. Drakulich and P. Van Arnum, "Evaluating Pieces of the Pharma Supply Chain," Pharm. Technol. 33 (1), 42–54 (2009).

3. ClinicalTrials.gov, National Library of Medicines, National Institutes of Health (Bethesda, MD), ClinicalTrials.gov, accessed Apr. 13, 2009.

4. P. Van Arnum, "Tipping the Scales in Manufacturing Investment," Pharm. Technol. 32 (7), 40–48 (2008).