With the world’s second largest concentration of HIV patients, Southeast Asia is a booming market for AIDS products.
- Asia has the world’s highest growing rate of HIV and AIDS cases and will soon surpass Africa as the most heavily afflicted continent.
- Government initiatives to prevent and combat the spread of this virus are slowly taking hold, overcoming the long-standing resistance of religious groups.
- These burgeoning prevention programs present opportunities for Western companies in both diagnostic and therapeutic products.
In spite of growing educational campaigns and scientific advances, the incidence of HIV and AIDS infection worldwide has increased dramatically over the last decade. From 1995 to 1996 alone, the cumulative number of AIDS cases reported by the World Health Organization (WHO) grew by 20%. Current estimates set the number of HIV cases in the world at 27 million, with the largest areas of concentration in sub-Saharan Africa (19 million) and South and Southeast Asia (5.0 million). To date, it has been estimated that 5 million adults and 1.4 million children worldwide have died from AIDS.
The growth rate of HIV and AIDS cases in Asia is the highest in the world. This has led the Global AIDS Policy Coalition to estimate that by the year 2000, Asia will surpass Africa as the most AIDS afflicted continent. In 1995 alone, it was estimated that more than 2.5 million people contracted the HIV virus in Southeast Asia. This figure exceeds the incidence of new infections in Africa and the rest of the world combined.
Among the countries in Southeast Asia, Thailand has the highest number of people infected with HIV. The United Nations AIDS Organization (UNAIDS) has estimated that in 1996, three-quarters of a million people in Thailand were HIV positive. Over the past 10 years, Thailand has officially recorded 14,000 deaths from AIDS, and this number is expected to rise to 300,000 by the year 2000. By the end of the decade, Thailand will have 3-4 million HIV carriers. Thai women are exhibiting higher rates of infection than men, with 60% of all carriers expected to be women by 2005. Thailand registered a larger increase in HIV infection among women than any other country in the world.
While Thailand is undergoing by far the most alarming increases, it isn’t the only Southeast Asian country where the incidence of HIV and AIDS is growing rapidly. In Vietnam, HIV rates among sex workers have jumped from 0.3% to 10% in less than five years, and the number of people infected with HIV has jumped from 2,400 in 1993 to nearly 30,000 in 1996. To date, the Philippines, Singapore, and Indonesia have officially reported relatively low rates of HIV infection. However, world health officials question the accuracy of these state-reported figures.
Infectious Double Standard
The two primary modes of HIV and AIDS transmission in Southeast Asia are through heterosexual intercourse and intravenous drug users (IDU). In the Philippines and Thailand, heterosexual contact is the predominant mode of transmission. In Indonesia and Singapore, while homosexual men are still the predominant group among AIDS patients, heterosexually acquired HIV infection rates already outnumber homosexual transmission.
In contrast, IDUs are the primary transmitters of the HIV infection in Vietnam and Malaysia. However, from 1993-1994 heterosexual transmission doubled in Vietnam and increased by 50% in Malaysia. Thus, it is likely that in the near future heterosexual transmission will become the dominant infection route throughout the region.
If this infection growth level continues, by the year 2000, Southeast Asia is expected to have the highest HIV and AIDS rates in the world. The unusually rapid spread of HIV in the region is due to both cultural and informational factors. In Southeast Asia, there is a traditional double standard when it comes to sexual behavior. The culture encourages young men to have sex freely as a part of the process of growing up, while women are expected to abstain from sexual activity until marriage and then remain monogamous.
The gender imbalance of behavioral norms results in a thriving commercial sex industry throughout Southeast Asia. The effects of this industry on spreading the disease are multiplied by the increased mobility resulting from more open borders and the accompanying tourism and employment opportunities. This leads to transmitting the virus to wives and then to children. Transmission in Thailand from spouses to their wives comprises 10% of the HIV-infected population of 800,000. Among Thai newborns, 23,000 out of every 1 million infants are infected with the HIV virus.
Another cultural factor in many of these Southeast Asian countries contributing to the spread of HIV and AIDS is the fact that discussing sexual matters in public is considered taboo. Thus, available protective measures are not approved because they are seen as promoting a free sex lifestyle. However, this has mainly led only to a greater part of the population having unprotected sex, thereby enhancing the likelihood of transmitting HIV.
Informational factors are the second reason for the spread of HIV in the region. These include both the lack of awareness of health care professionals and the general public, and the resistance of religious groups to educational campaigns. There is a significant need for hospital-based training for health care providers in the region. In Vietnam, for example, only 58% of physicians reported ever having a medical school lecture on HIV.
Within the general public, misconceptions about how the virus is transmitted run rampant. Many Asians associate AIDS transmission with factors ranging from the use of cups and glasses, to donating blood, to working near someone with HIV, to using public toilets and /or to getting mosquito bites. Further enhancing this information gap is the fact that many ethnic minorities in the region tend to believe that they are immune to HIV and AIDS, seeing it only as a Westerner’s disease.
Governments Hindered
Governments’ efforts to overcome this ignorance through educational campaigns have thus far been hindered by the power and resistance of religious groups in the region. In Muslim countries such as Indonesia and Malaysia, religious groups denounce the anti-AIDS campaigns as resulting in increased promiscuity. In Indonesia, the government has repeatedly taken the position that, as a conservative Islamic country, its cultural traditions will satisfactorily minimize dangerous sexual activities. Accordingly, television advertising of condoms for AIDS prevention is forbidden by Indonesian law.
In the Philippines, where 90% of the population is Catholic, the government is trying to organize a national AIDS program. However, these efforts are being hampered by the opposition of the Catholic Church, whose leader in Manila, Jamie Cardinal Sin, has called the campaign intrinsically evil.
Governments in the region are finally beginning to take strong initiatives to overcome the societal forces that both drive the spread of HIV and AIDS, and which hinder effective prevention and care measures. These initiatives are characterized most importantly by educational campaigns, coupled with significant increases in government expenditures to generally address HIV and AIDS related issues.
Some countries are further along in developing these educational campaigns. In Singapore, for example, the slow growth of the epidemic is largely attributable to a highly educated population and well-aimed AIDS prevention programs. Thailand, despite having the highest rate of HIV infection in the region, has developed, over the last four years, what experts are calling one of the best AIDS prevention programs in the developing world, instituting massive education programs facilitated through governmental interaction with non-governmental organizations (NGOs). In Malaysia, the government allocates a sizable amount of their budget to HIV and AIDS programs, and has a cabinet committee on AIDS as well as a National Coordinating Committee on AIDS, which brings together representatives from government ministries and NGOs to address this problem. The government is also conducting a major media campaign in several languages to alert Malaysians to the epidemic.
Southeast Asian countries are projected to be one of the leading global growth sectors for medical products generally in the 21st century. The HIV and AIDS market, currently booming worldwide, will be a major component of that growth with diagnostics initially representing the largest specific product area within that niche.
Southeast Asia is already the largest single market in the world for HIV diagnostic products and promises high future growth rates and fierce product competition as more players enter the market. Before treatment can be sought the infection must first be identified, but in Southeast Asia, this initial step is just at the initial development stage.
Biggest HIV Dx Market
There are currently two major types of diagnostic test on the market. The Elisa test, which is, to date, the most accurate, has the disadvantage of being complicated and taking longer to obtain the results. The others are rapid tests, which often can be done on-site, in relatively simple procedures, but have varying degrees of accuracy and sensitivity.
There are eleven major Elisa diagnostic test products available in the Southeast Asian market. Most Elisa tests cost between US$1.20 and 1.60 per test, inclusive of materials, services and related costs. A sandwich Elisa is produced by Abbott Laboratories, Inc., Roche’s newly-acquired subsidiary Boehringer Mannheim GMBH and its Roche Diagnostic Systems, Inc. division; Dade Behring Inc.; Sanofi Pasteur Diagnostics, a division of Elf Acquitaine Group; and Akzo Nobel NV’s Organon Teknika NV. Other methods of mass screening include Abbott Laboratories’ Microparticle EIA. bioMerieux’s enzyme linked fluorescent immunoassay, and Sonofi Pasteur Diagnostics’ chemiluminescence. Fujirebio Inc. is also in the mass screening market with its gel particle agglutination method, which is significantly more costly than most other Elisa tests.
The market for rapid diagnostic tests in the region has grown significantly. There are four major companies with products on the market. All have been relatively successful in their Southeast Asian ventures due to their early entry into the marketplace. These four tests all detect both HIV1 and HIV2, however, none of these tests results differentiate between the two strains. In addition, none of these four tests have yet been approved by the US FDA.
Fujirebio was one of the initial companies to invest in the rapid test market in Southeast Asia with their Serodia HIV1-2 test. This test analyzes blood serum, takes two hours to complete and is one of the cheapest tests, at a wholesale price of only $1.07 and a retail price to doctors or hospitals of $2.15 per test. However, it is one of the more complicated rapid diagnostic tests, with the capability of doing multiple tests (up to 200) simultaneously. Fujirebio manufactures this test in Japan and markets it in Southeast Asia mainly through exclusive distributorships. In addition to selling this test in Asia where it has seen steady growth, Fujirebio also markets this product in 90 other countries worldwide.
Another player in the Asian HIV diagnostics market is Genelabs Technologies, Inc., a biopharmaceutical company based in the San Francisco Bay area focusing on gene-regulation drug discovery, infectious diseases and immunological disorders. Genelabs produces the HIVSpot test, which has been sold in Asia since the late 1980s. This test uses samples of plasma/serum, and can be done in 5-10 minutes.
However, the test is difficult to use and interpret due to the fact that it requires reagent reconstitution. This is made more complicated by the fact that the reagent shelf-life is only five days at room temperature. Thus it is necessary to have equipment for collection and processing. Genelabs’ test also has a higher retail price of about $2.00 per test, and is not yet approved by the FDA. Manufactured in Hong Kong, Genelabs markets its Southeast Asian products in one of two ways, either directly from Genelabs’ Singapore offices, or, in other countries in the region such as Vietnam and the Philippines, where the company has established a distributor network.
Agen Biomedical Ltd., an Australian company, manufactures and distributes the SimpliRed test for the HIV market. This is a whole blood test which takes only five minutes to complete. It is collected through finger-stick venipuncture, and requires relatively uncomplicated equipment manipulation. This is one of the more expensive diagnostic tests at a wholesale price of $3.00 and a retail price to the doctor and hospital of $6.00. Agen’s products are manufactured in Australia, and marketed throughout Asia via distributors.
The fourth major HIV rapid diagnostic test manufacturer in the Southeast Asian market is Saliva Diagnostic System, Inc. (SDS) of Vancouver, Washington. SDS manufactures the Hema-Strip HIV 1-2 rapid diagnostic test, which is one of the simplest and most successful tests on the market. It is a whole blood test, takes five to ten minutes from start to finish, requires only a lancet and can be stored at room temperature. It is priced at the mid to upper-mid levels of the price range for these diagnostic tests, with a wholesale price of $3.00.
SDS’s Hema-Strips have been sold in various Asian countries since 1987, mostly through exclusive distributorship agreements with local firms. SDS recently set up a manufacturing facility in Singapore, where it hopes to sell its products directly after it is approved for sale by the Singapore regulatory authorities. The company is also applying for regulatory approval in China, Malaysia, Thailand and India.
There is fierce price competition between the producers of various HIV diagnostic tests. Fujirebio is offering its test retail to doctors or hospitals for $2.00, and $1.50 per test for bulk orders. These figures translate into wholesale prices to their distributors of $0.75 to $1.25. Other companies sell their diagnostic tests wholesale to distributors in the $1.50-2.00 range. In addition, if a test has been approved by the World Health Organization, government purchasers receive an additional discount. Since all products in the HIV diagnostic test sector are relatively inexpensive, accuracy is a more significant factor that pure price, enabling more precise tests to command a higher mark-up.
Registration requirements vary by country in Southeast Asia, but FDA approval will generally help expedite the registration process. Thailand and Singapore have the most stringent registration rules for HIV diagnostic tests. In Thailand, a certificate of free sale is required from the country where the product is manufactured, plus local testing including 1,000 local tests for lab evaluation, and 2,500 local tests for clinical evaluation.
Singapore strictly regulates new HIV products by requiring that they be tested at the reference lab at Singapore General Hospital prior to registration. The lab offers will often offer weak positive samples to determine a test’s accuracy. To date, Fujirebio’s Serodia is the only rapid test approved in Singapore. Agen’s SimpliRed was rejected, as were several Elisa tests for not being accurate enough.
By contrast, in Malaysia, the Philippines, and Indonesia, an HIV diagnostic test can be sold after local registration, which is relatively simple and straightforward. In these countries, the registration process generally takes 3-6 months.
HIV TEST KITS—COST COMPARISON (PER TEST)
| Assay name (Manufacturer) |
HIV Serotype | Test type, Antigen |
Cost/test (US$)* |
| Vironosticka HIV, Uni-Form II (Organon Teknika) |
HIV – 1+2 | Elisa (450 nm) recombinant synthetic peptide viral antigens | .50 |
| Detect HIV I+II (Biochem) | HIV – 1+2 | Elisa (450 nm) synthetic peptides | .50 |
| Genlavia Mixt (Sanofi Diagnostic Pasteur) |
HIV – 1+2 | Elisa (492 nm) recombinant antigen | .50 |
| Innotest HIV-1/HIV-2 (Innogenetics) | HIV – 1+2 | Elisa (450 nm) recombinant | .50 |
| Ubi Elisa (United Biomedical) | HIV – 1+2 | Elisa (492 nm) viral lysata synthetic peptide | .50 |
| Recombigen HIV ½ Eia (Cambridge Biotech) |
HIV – 1+2 | Elisa (492/630) | .50 |
| HIVSpot (Genelabs) | HIV – 1+2 | Rapid Test, recombinant antigen synthetic peptide | 1.50 |
| Capillus HIV 1+2 (Cambridge Biotech) |
HIV – 1+2 | Rapid Test, recombinant antigen | 1.50 |
| Immunocomb Bispot (PBS Orgenics) |
HIV – 1+2 | Rapid Test, recombinant antigen | 1.50 |
| Serodia-HIV (Fujirebio) |
HIV – 1 | Simple Test, viral lysate | .65 |
| Serodia-HIV 1+2 (Fujirebio) | HIV – 1+2 | Simple Test, recombinant | ¥112.50** |
| Supplemental Assays available upon request | HIV – 1+2 | Viral sysate, recombinant, synthetic peptide | 12.00, 14.00 |
| *Please note that this price does not include freight and other taxes | |||
| **The cost of Serodia HIV 1+2 is expressed in Japanese Yen. | |||
SOURCE: Pacific Bridge, Inc.
Therapeutic Products
Over the past 10 years, there have been many therapies developed to fight HIV infection. To date, the FDA has approved at least eight drugs to treat HIV and AIDS. These can be categorized into two main groups, according to their functions. The first category is that of reverse transcriptase inhibitors, which include AZT, ddC, ddI, d4T, 3TC, and nevirapine. The second category is protease inhibitors, such as indinavir, ritonavir, and saquinavir. The most recent development in HIV therapeutics is the drug cocktail, which includes AZT, lamivudine, and indinavir.
Due to the large demand for therapeutic products, there are also many synthetic drugs and several naturally-based products on the market. Additionally, there are some non-conventional therapies, such as body energy electromagnetic synthesizers (BEES), which are used in the Philippines.
Most of the treatments that are available in Southeast Asia are in the reverse transcriptase inhibitor category. In Thailand, the Government Pharmaceutical Organization (GPO) is exploring the possibilities of widespread use of AZT and ddI. It is currently working with the Canadian ACIC Co. to produce and distribute AZT capsules at below market prices. In Indonesia, Glaxo Wellcome PLC is working with the Indonesian Association of Doctors to provide affordable access to zidovudine, which normally costs about $455 per course to pregnant HIV-infected women. Zidovudine is also used in the Philippines, in addition to zalcitabine. While these drugs are available there, the National Sexually Transmitted Disease Prevention and Control program official policy is not to recommend their routine use to all HIV patients.
Protease inhibitors are a more recently developed class of HIV treatment drugs and include ritonavir, saquinavir, and indinavir. Southeast Asia, the Philippines and Thailand are the countries which use these drugs most often.
The Philippine Bureau of Food and Drugs (BFAD) recently approved Invirase, a protease inhibitor produced by Roche Philippines. Two other protease inhibitor drugs, ritonavir, and saquinavir, are currently undergoing clinical trials.
In 1996, Thailand’s Food and Drug Administration approved the sale of the protease inhibitors, Norvir (ritonavir), and Invirase (saquinavir). These approvals were influenced by the opinion of Dr. Damrong Boonyuen, Director General of the Thai Communicable Diseases Control Department, who stated that combining protease inhibitors with other anti-retroviral drugs is more effective in halting the multiplication of the virus.
In Thailand, Norvir is being produced by Abbott Laboratories, and Invirase is being produced by Roche. These drugs are available only with a doctor’s prescription and cost between baht 100,000 and 180,000 ($4,000-7,200) per person per year, placing it out of reach for most Thai HIV infected patients.
There are also some less conventional drugs and treatment techniques which are being used in Southeast Asia. Remune treatment, formerly known as HIV-1 Immunogen, was approved by the FDA for export to Thailand for clinical trials. These trials commenced in 1996 at Thailand’s Mahidol University, conducted by Trinity Medical Group Ltd. of Thailand and the Immune Response Corp. of Carlsbad, California. Also in Thailand, VIMRxyn was approved in 1996 for clinical trials by the Thai FDA. This product is produced by VimRx Pharmaceuticals Inc., of Wilmington, Delaware, and the study was managed by Pharma Bio-Research of the Netherlands.
Another unconventional treatment came out of the Philippines. In 1992, Serafin Orijuela, Jr., a Filipino electrical engineer, invented the body energy electromagnetic synthesizer (BEES) to remedy various ailments, including AIDS, on the premise that the body is unhealthy due to a deficiency of negative ions.
In April of 1997, MediChem Research, Inc. formed Sarawak MediChem Pharmaceuticals Inc. in Malaysia to develop and anti-HIV compound called calanolid A. This is purportedly a naturally occurring anti-HIV compound that was discovered in the Sarawak rain forest. The first phase of testing this drug will begin this year in Tacoma, Washington. Current laboratory tests claim to show that this compound was able to completely restrain replication of the AIDS virus, while also having properties that make it more effective in combination with other anti-HIV agents.
In Thailand, the GPO has allowed the manufacture of HIV drugs based on five herbs (plugenal, guava leaves, momordica charantia, phaya yo cream, and linghzi mushrooms) after clinical studies claimed to show that they helped boost the immune system. These synthetic, naturally-based medicines are thought to assist the immune system to fight off the HIV infection.
Registration time frames for most therapeutic products in Southeast Asia are at least one year, and in some countries, up to two years. While patent, copyright and intellectual property regulations are improving, copying is still rampant in the region, making protection of intellectual property a significant issue.
Insurance reimbursement for pharmaceuticals also varies by country, but in most cases it will amount to one-half to three-fourths of the price of the drug or therapy. Drugs which are produced locally are considerably less expensive than those that are imported or licensed from abroad. For example, a one-year dose of a locally-produced HIV or AIDS drug may cost as little as $200-300.
In addition to presenting a large potential market for a potential vaccine, Thailand is also serving as a primary research base. There are five vaccines currently available in Thailand: HGP-30, Prophylactic, gp160, gp120, and HIV-1 Immunogen.
The HGP-30 vaccine was tested by Dr. S. Ubolyam of Chulalongkorn Hospital to determine whether it could stimulate lymphocyte proliferation in peripheral blood mononuclear cells. The findings revealed that 17 of the 26 volunteers tested sera positive for lymphocyte transformation assay.
Clinical trials on the Prophylactic vaccine began in 1993 with female commercial sex workers and men recruited at sexually transmitted disease centers. The initial trial established guidelines, incentives, and barriers for further trial participation among high risk sero negative populations.
A third vaccine, Gp-160 manufactured by a US medical company, United Biomedical Inc., was tested by the Thai Red Cross Society in 1995. However, this vaccine was subsequently dropped by the American company and testing was not resumed.
Another US-made vaccine, gp120 from Chiron Corp. subsidiary Biocine Co. of Emoryville, California, was tested by the Bangkok Metropolitan Administration to attempt to verify the recovering effects on intravenous drug users. It is also produced by Genentech Inc., whose version was tested by the Armed Forces Institute of Medical Science and Chiang Mai University.
Finally, HIV-1 Immunogen, a therapeutic vaccine made by Immune Response Corp., of Carlsbad, California, is being tested on relatively healthy Thais with HIV who were not suffering from opportunistic infections.
While there is not cure yet available for AIDS, particularly in Southeast Asia, the prominence and growth of the disease has prompted governments and investors alike to do substantial research into all three treatment product sectors: diagnostic, therapeutic, and curative. Along with the rapid spread of HIV and AIDS, this region also experienced very rapid economic growth over the last fifteen years. Despite the baht devaluation in Thailand in July 1997, and the resulting negative economic reverberations in the region, the underlying fundamentals for growth remain strong.
According to the Pacific economic outlook forecast, the devaluations were “an adjustment, not a calamity.” The immediate results of the economic changes seem to be a scaling back of the growth rate projections from the sky high levels of 8-10%, to the more sustainable, but still dynamic 4-7% levels.
The reasons for the continued high sustained growth are rooted in five major economic forces. The first is the expansion of private fixed investment, which will continue as it grows to meet rising demand. The second is export growth, which lately has been robust in the region. Thirdly, rising rates of tourism continue to bring investment and growth. Fiscal consolidation is a fourth source of growth which is occurring as surpluses increase and budget deficits fall. Finally, the rapid growth of domestic demand is occurring due to increasing disposable income which enables citizens to demand more and higher quality goods and services.
The dynamic nature of the Southeast Asian markets, in conjunction with the rapid spread of HIV and AIDS has spawned a region of incredible potential for diagnostic, therapeutic, and vaccine technologies, as well as related drugs and equipment. In 1996, it was estimated that there were 6 million people infected with HIV and AIDS in Southeast Asia alone. That is more than in all of the industrialized countries combined. Those companies which are able to establish a presence in Southeast Asian HIV and AIDS markets will now find a much more hospitable environment.
Ames Gross is president and founder and Alisa DiCaprio an associate at Pacific Bridge Inc., a Washington, DC-based consulting firm specializing in Asian business matters.