2017年-普华永道全球_Asia-Pacific_Health_Industries_Newsletter_October_2017_14页_609kb

Asia-Pacific Health Industries Newsletter Summary (Issue 19, October 2017)

Core Content Overview

This issue of the Asia-Pacific Health Industries Newsletter, published by PwC, provides insights into the latest developments in the pharmaceutical, biotechnology, medical device, diagnostic, and healthcare sectors across the Asia-Pacific region. The focus areas include tax reforms, regulatory changes, pricing mechanisms, and M&A activities in key countries such as India, Taiwan, and China, as well as broader health industry trends and strategic considerations.

Main Topics and Key Information

India: Impact of GST on the Pharmaceutical Industry

• Overview: The introduction of the Goods and Services Tax (GST) is one of the largest indirect tax reforms in India since independence. It aims to simplify the tax structure and improve business efficiency.
• Tax Structure Changes:
  • Replaced multiple taxes with a unified GST system.
  • Dual GST model: Central GST (CGST) and State GST (SGST) for intrastate transactions; Integrated GST (IGST) for interstate transactions.
• Challenges:
  • Supply Chain Realignment: Companies are reorganizing distribution models to reduce state dependency and optimize regional hubs.
  • Credit Flow: GST allows for seamless input tax credit, reducing costs for pharmaceutical companies.
  • Inverted Duty Structure: Input taxes (on raw materials) are higher than output taxes (on finished products), but a credit refund mechanism is in place to address this.
  • Valuation Issues: Free drug samples and promotional items now subject to GST, complicating tax calculations.
  • Uncertainty on Exemptions: No clarity on the continuation of area-based tax exemptions, but post-facto refunds are anticipated.
• PwC Observations:
  • Overall positive impact on the industry.
  • Expectation of improved competitiveness and more strategic decision-making beyond tax considerations.

Taiwan: Streamlining the Drug Evaluation System

• Overview: The government plans to upgrade the Centre for Drug Evaluation (CDE) into a financially independent national organization to streamline drug and medical device licensing.
• Key Details:
  • CDE will handle all technical reviews, allowing the Taiwan Food and Drug Administration (TFDA) to focus on policy.
  • Expected to increase the percentage of drug applications reviewed within 360 days from 50% to 90% for new chemical entities (NCEs), and within 180 days for generics from 41% to 90%.
• PwC Observations:
  • The reform is expected to expedite product launches and enhance Taiwan's position as a biotech R&D hub.

Taiwan: Government Policy Spurring M&A

• Overview: The government has included the biomedical sector in its 'five plus two' innovation-led growth strategy.
• Key Details:
  • A biomedical promotion plan launched in 2016 to position Taiwan as an R&D hub in Asia.
  • The National Development Fund (NDF) has allocated TWD 100 billion (USD 3.3 billion) to support M&A and acquisitions.
  • NDF provides up to 20% of the investment value for M&A, capped at TWD 10 billion per deal.
  • Examples of cross-strait M&A include TaiGen Biotechnology's joint venture with a Chinese company and United Orthopedic Corporation's acquisition of A-Spine Asia.
• PwC Observations:
  • Taiwan is becoming an attractive destination for biopharmaceutical investment.
  • M&A activity is expected to accelerate due to supportive policies and market expansion strategies.

Singapore: IP Development Incentive (IDI)

• Overview: Singapore introduced the IP Development Incentive to encourage innovation, focusing on the commercialization of intellectual property.
• Key Details:
  • Qualifying income is taxed at a lower rate than the standard 17%.
  • The IDI incorporates the OECD's BEPS-compliant modified nexus approach, which ties preferential treatment to in-country R&D activities.
  • The legislation is under parliamentary review and expected to be released later in the year.
• PwC Observations:
  • The IDI reflects Singapore's alignment with global IP standards.
  • It may add complexity to the existing incentive regime, requiring careful administration.

China: National Drug Price Negotiations

• Overview: China's Ministry of Human Resources and Social Security (MOHRSS) conducted the second round of national drug price negotiations, resulting in significant price reductions.
• Key Details:
  • 36 important drugs were reduced by an average of 44% in price.
  • These include cancer treatments and other high-demand, high-cost drugs.
  • The drugs automatically entered the National Reimbursement Drug List (NRDL) and Provincial Reimbursement Drug Lists (PRDLs).
• Challenges:
  • Uncertainty around sales growth due to lower pricing and potential hospital discounts.
  • Possible future price adjustments based on contract expiration or generic approval.
• PwC Observations:
  • Innovative drug companies need to strengthen relations with MOHRSS and develop pharmacoeconomics capabilities.
  • Pricing strategies and business forecasts should align with new healthcare reforms.

Additional Publications and Topics

• The newsletter also highlights other publications from PwC, including:
  • Vision 2025: Unlocking India's potential for leadership in pharmaceutical innovation
  • Beyond 2020: Building strategic coherence in the New Health Economy
  • Healthcare reform: Why the stars are finally aligning (Australia)
  • Digital Health: Australia can see further by standing on the shoulders of giants
• These publications cover broader themes such as healthcare reform, digital transformation, and strategic planning for the future of the health industry.

Key Asia-Pacific Health Industry Contacts

• Australia: Nathan Schlesinger
• China: Jia Xu
• India: Sujay Shetty
• Indonesia: Ay Tjhing Phan
• Japan: Kenji Mitsui
• Korea: Hyung-Do Choi
• Malaysia: Yennie Tan
• New Zealand: Hadley J Slade-Jones
• Philippines: Benjamin Azada
• Singapore: Abhijit Ghosh
• South East Asia: David McKeering
• Taiwan: Lily Wong
• Thailand: Charles Ostick

Conclusion

The newsletter underscores the transformative impact of regulatory and tax reforms on the pharmaceutical and healthcare industries in the Asia-Pacific region. It emphasizes the need for companies to adapt to these changes, leveraging opportunities in market access, innovation, and M&A to remain competitive and compliant in a rapidly evolving landscape.