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4 October, 2010
The pharmaceutical industry has been one of the few industries which did not suffer a severe negative impact during the global financial crisis. In 2009, the market grew 7% to US$837 billion, compared with a 4.8% growth rate in 2008. Sales of the sector are expected to grow 4 to 6% this year. The size of the global market for pharmaceuticals is expected to grow nearly US$300 billion over the next five years, reaching US$1.1 trillion in 2014.
But with this growth, global pharmaceuticals are experiencing a significant shift. The Asia-Pacific region is emerging as the fastest growing market. The reason attributed for this is lower costs and lack of stringent regulatory requirements.
Pharmaceutical sales are growing rapidly in India, China, Malaysia, South Korea, and Indonesia due to rising disposable incomes and several health insurance schemes. China’s pharmaceutical market will continue to grow at over 20% annually, and will contribute 21% of overall global growth through 2013, while the Indian market is expected to grow by 10% this year.
For South East Asia, Association of Southeast Asian Nation (ASEAN) harmonization is a hot topic among pharmaceutical companies, as it will liberalize a number of highly regulated markets (ASETUC).
Considering all these developments in pharmaceuticals and demands from affiliates, the ICEM, with the support of Germany’s Friedrich-Ebert Foundation (FES), organized a workshop for pharma industry unions in Jakarta, Indonesia, on 28-29 September. Attended by 30 trade union representatives from Indonesia, South Korea, Japan, Vietnam, Pakistan, Singapore, Nepal, and Thailand, the workshop was hosted by Indonesian Pharmaceutical Industry and Health Services Union (FARKES), led by Djufnie Ashary.
The ICEM was represented by Chemical and Rubber Industries’ Officer Kemal Özkan, and Asia-Pacific Regional Contact Person Phee Jungsun, who ran the workshop.
Following the opening speeches by Erwin Schweisshelm, Indonesian Director of the FES, Sjaiful DP, President of ICEM affiliated union of FSP KEP and Chairman of ICEM Indonesian Council, and Djufnie Ashary of FARKES, the workshop got a detailed presentation from Özkan on both the global and Asian pharmaceutical markets, with recent figures, developments, and challenges set forth. Participants provided country and company information at the workshop.
In Indonesia, pharmaceutical industry volume turns over at about US$2.7 billion each year. Pharma growth in Indonesia is about 10% annually. In 1991, multinationals controlled over 70% of market share, but now that figure has dropped to 25%.
Norihiro Tokunaga, Assistant General Secretary of ICEM-JAF, shared basic data on Japanese health care. According to Tokunaga, in Japan, with its low birthrate, society is rapidly aging. It is estimated that one-fifth of the population will be older than 75 by the year 2030, and that will extend to a full quarter by 2055.
This development, said Tokunaga, has already made a huge impact on the cost of the social security system. If this trend continues further, naturally, expenditures on pension schemes and the national health system will increase, pressuring the country’s finances. Therefore, Japanese public health care systems must respond urgently. Tokunaga explained that social dialogue in the pharmaceutical industry is considered the proper way for sustainable development of the sector and is the norm on how pharmaceutical unions must organize in Japan.
For South Korea, representatives of the Federation of Korean Chemical Workers’ Unions (FKCU) described the challenges of pharmaceutical workers as job security, particularly with mergers or closures of production lines, and restructuring caused by multinational company mergers occurs. A further challenge is a change of pharmaceutical policies by the government, which includes an incentive system for low-price purchases and the crime of dual punishment in case of rebate or kickback.
The workshop was participated by a number of union representatives from such pharmaceutical multinationals as Sanofi Aventis, Merck, GlaxoSmithKline, Bayer Schering, Takeda, Meiji, Tanabe, Hisamitsu, and Kawasumi.
One country which has recently opened for international investments – Vietnam – has 39 registered foreign pharmaceutical companies with 6,500 employees. But only 14 of these are unionized with a total membership of 2,300, and just four collective agreements are in this sector in Vietnam.
The workshop also received reports from the ICEM’s Özkan on “Global Dimension of Industrial Relations: International Mechanisms, Social Dialogue, Global Framework Agreements, and Global/Regional Networks,” and the “Rising New Threat Against Working Conditions: Precarious Employment.”
After the discussions, workshop delegates unanimously decided to form the ICEM Asia-Pacific Regional Pharmaceutical Industry Network. For using electronic technology, a list of e-mails was prepared and immediate exchange of information will begin very soon.
“Just prior to the ICEM’s World Conference for the Chemical Industries, to be held on 27-28 October 2010 in Istanbul, Turkey, the creation of this regional network is very promising,” said Özkan. “It has shown us the opportunities and challenges within pharmaceuticals, and trade unions should be able to take further initiatives.”