(Yicai) Sept. 21 -- Southeast Asia offers huge potential for Chinese innovative drugmakers as demand for better healthcare rises, but breaking into the region’s fragmented pharmaceutical markets will be far from easy, according to industry insiders speaking at BioShanghai Week 2026.

"The opportunities in the Southeast Asian market are considerable, but the practical challenges are far beyond what many companies anticipate. They need to be prepared for long-term investment," Yan Jun, general manager of the international business division of Shanghai Pharmaceuticals Holding, said at the biopharma industry conference that concluded in Shanghai yesterday.

Aging populations and a rising burden of chronic diseases across SE Asia are driving demand for new treatments, while limited local research and development capabilities and a long-standing reliance on imported drugs are creating opportunities for Chinese drugmakers.

Malaysia offers one example of the growing healthcare demand. The country has a population of 34 million and an urbanization rate of 78 percent, while its population is aging and non-communicable diseases are becoming more prevalent, said Dato' Khalid bin Ibrahim, who has worked with the Malaysian Health Technology Assessment Section. Ischemic heart disease, pneumonia, cancer, and diabetes are among the country’s most prevalent diseases, he added.

The health expert said rates of colorectal, lung, and breast cancer remain high in Malaysia, with a large proportion of cases diagnosed at a late stage, creating urgent demand for advanced cancer treatments. However, access to innovative drugs remains limited because many are either unavailable or unaffordable.

Diabetes affects over 31 percent of Malaysian adults, while access to innovative diabetes and weight-loss drugs such as GLP-1 medicines remains limited in the public healthcare system, per Khalid bin Ibrahim. Third-generation long-acting insulin is expensive, and supplies are unstable, while there is also a shortage of new, safe, and affordable cardiovascular drugs, he added.

The need for better healthcare extends across SE Asia. Cancer cases in the region grew by an average of about 3 percent a year between 2020 and 2025, compared with about 2 percent globally, according to data from clinical research company IQVIA and other organizations. The region’s diabetes population grew by about 2.5 percent annually, versus roughly 2 percent worldwide.

Fragmented Markets Raise Entry Barriers

Despite the growing demand, gaining a foothold will take time. One obstacle is market recognition.

Chinese active pharmaceutical ingredients and conventional generic drugs have long been sold in SE Asia, yet Chinese pharmaceutical brands still have limited recognition in the region, Yan said.

Another major hurdle is the region’s fragmented pharmaceutical market. While SE Asian countries share some similarities in disease patterns and payment systems, drug approval rules, healthcare spending levels, and doctors’ prescribing habits vary widely, creating different market-access barriers in each country, Yan said.

He offered some examples. Vietnam has stringent requirements for verifying the origin of pharmaceutical products, meaning companies need to address regulatory compliance issues before entering the market. Thailand is the only Association of Southeast Asian Nations country that requires oral drugs to undergo local bioequivalence studies to show they are absorbed similarly to existing equivalents before receiving marketing approval, according to Yan. For innovative drugs, local clinical evidence can also be crucial to achieving large-scale commercialization, he added.

Meanwhile, in the Philippines, pharmaceutical distribution and prescribing channels are relatively fragmented, requiring companies to build relationships with both pharmacy chains and medical institutions while continuing to invest in prescription promotion, Yan said.

The 10 SE Asian countries vary considerably in their levels of economic development, resulting in significant differences among their pharmaceutical markets, Zhang Xiaohui, deputy director of the international cooperation department at the China Chamber of Commerce for Import and Export of Medicines and Health Products, told Yicai.

SE Asia is not a homogeneous single market, with opportunities embedded in highly fragmented regulatory and healthcare payment systems, Zhang said. Understanding these structural differences is essential for turning market opportunities into tangible commercial returns, she added.

Localization Offers a Route Into Malaysia

One way to overcome these barriers is through deeper localization.

Chinese innovative drugmakers seeking to enter Malaysia should move beyond the approach of "only selling finished products" and explore deeper localization partnerships, Khalid Bin Ibrahim suggested at the conference.

Such cooperation could include setting up joint ventures and transferring technology to enable vaccines and biologic drugs to be filled and finished locally in Malaysia, helping reduce cross-border intellectual property risks, he said.

Obtaining local manufacturing status could also enable Chinese companies to benefit from preferential treatment for domestically produced products in Malaysia's public procurement system. Companies could meanwhile use Malaysia as a strategic springboard into other Muslim pharmaceutical markets in ASEAN and the Middle East by leveraging the country's halal certification system, Khalid Bin Ibrahim added.

Editor: Emmi Laine