Life Sciences in Asia: is the Tiger an Endangered Species?
Published in Recruitment International Asia in April 2015.
The story of Western expansion into the Life Sciences in Asia has been one of rapid change. Nick Stephens, Executive Chairman of RSA, the leading global Life Sciences Executive Search and Executive Interims specialist, explains how the war for talent in Asia has been adapting to the unpredictable landscape.
Asia is proving a volatile but vital market for the Life Sciences industry. The initial flare of optimism in “the Chinese opportunity” has recently been dampened, by less-than-stellar growth figures, declining profit figures, high R&D costs and, of course, the corruption charges faced by GSK and other multinationals.
Following their record $490m fine in 2014 for paying out bribes to promote their products, GSK – and other western pharmaceuticals – will understandably be considering their operations in the region carefully. This certainly wasn’t part of the plan when the much heralded eastern expansion was been touted in recent years.
For some, there is a feeling that investment and activities in China were overplayed. But the diverse nature of the sector means that global companies still stand to gain in the coming years.
The strategy for Life Sciences in Asia is largely unchanged because the markets are still growing, and the burgeoning middle class in the region can afford either to buy their own drugs, to pay the taxes to fund socialised healthcare systems or both.
What has changed is how the industry is approaching Asia. They are being smarter about where they operate, and more diverse about where they invest their money and how they apply it. All of this has an impact on the talent they need to succeed.
Home is where the heart is
If the continued presence of western pharmaceuticals in Asia seems assured, how will they approach recruitment in the wake of recent scandals? In a word – defensively.
One theme across the multinational pharmaceutical companies in Asia is a withdrawal of power back to Headquarters, who are taking more active roles in management and oversight. Home-grown talent is increasingly being favoured for the senior roles, with regional leaders even more frequently being assigned from Western headquarters. Regional headquarters are finding that they have less freedom to appoint local people into these ‘signature’ positions.
The exception to this trend is for those leaders who have already established strong, credible, and trustworthy experience in “blue chip” companies in the region. Companies are increasingly keen to hear from these individuals.
Meanwhile, we are told by “agency” friends that the demand for local, junior staff remains strong. Turnover remains high, reflecting both the ambition and drive of the people, and what is often perceived to be a lack of loyalty to and from the companies concerned.
In the recent past senior executives often felt they needed the “Asia badge” on their CV in order to progress to VP levels and above. As the Asia market matures and becomes a leader in healthcare innovation, the “badge” is increasingly becoming a career goal in itself.
The science of compliance
With the Sunshine Act due to come into effect next year, transparency is more important than ever for the industry. The Act, which compels pharmaceuticals to track data on payments and gifts made to physicians and teaching hospitals and to make it publicly available, means that compliance is top of the agenda for Life Sciences businesses. Life Sciences multinationals are therefore increasingly recruiting for compliance roles in or for Asia, whether that’s in clinical quality, manufacturing quality, regulatory, or finance staff. This has a knock-on effect for on-boarding and training too.
Diversity is opportunity
The growth of government-backed socialised healthcare systems is helping to fuel the growth of the sector across several countries in Asia. In China, South Korea and Singapore there exists a blend of healthcare systems. In Indonesia, Vietnam and the Philippines governments are striving to develop new, universal, healthcare systems. As the economies grow and healthcare becomes more established, so too will the market opportunity.
The relative youth of the Asian market presents unique opportunities for Western pharmaceuticals. Companies are able to extend ageing brands, giving them a new lease of life. Products that are no longer profitable in the west can make a profit in Asia as the brand implies quality and commands a premium over “local” products.
The markets for some related (but non-life saving) categories like: Cosmetic Procedures, Health & Beauty and Nutrition markets are growing very fast across Asia. These are interesting changes in the market and are themselves driving an increase in demand for talent from consumer marketing in Asia and beyond.
It remains to be seen which company, which sector, and which countries will benefit most as “Western” businesses continue to adapt to the Asian market. But one thing is for sure, the potential rewards remain huge.
Pharmaceuticals in Asia: where to watch
All the Asian pharmaceutical markets will change over time. But where are the opportunities for talent today?
Nick Stephens, Executive Chairman of RSA, the leading global Life Sciences Executive Search and Executive Interims specialist, explains.
Japan
“The Japanese market is evolving rapidly. Originally a very insular, inward looking market, it is now lifting its head to the global market and its regulators are working hard to enable pharma to develop drugs in the region/for the region. Japan also leads the way in some cutting edge areas for example, stem cell research. As a result, we’re seeing a big upsurge in related roles in the region.”
South Korea
“South Korea is exploding. It’s likely that there will be some big IPOs there soon, with a consequent upsurge in demand for talent. The market is often seen as safer than China and data gathered there is seen positively by the SFDA. There is a burgeoning demand for talent across the industry.”
Singapore
“Singapore is usually seen as the safe base for businesses in Asia. This perception is correct and increasingly true. Its economy is benefiting from new investment by companies who find the environment conducive because of the substantial government investment in basic science, translational science and bio-manufacturing; as well as in developing an environment where business can operate to US/EU standards with ease. Multinational pharmaceuticals are flooding to Singapore, especially at the “consumer end” of things such as nutrition, consumer healthcare, OTC medicines and health and beauty. Demand for expertise in these areas is rocketing.
China
“With 1.4 billion people, China remains a priority, you simply can’t ignore! Although the industry is licking its wounds, it’s too committed to pull out completely. If you have access to “safe pairs of hands” you have a competitive advantage.
“Across the whole region, countries and businesses are able to use the comparatively “blank sheet” to experiment with moving from an IP focussed healthcare model to a “patient outcome” model. The winners will transform global healthcare and drive value for shareholders and patients alike. Watch this space!”