Name

1

• Name
• ???
• Derek Wang
• Education
• BS, Business AdministrationMenlo College,
  California, USA
• MPPMSchool of Management Yale University,
  Connecticut, USA
• Work Experience
• Financial Analyst, Syntex Labs, USA
• Vice President, Marketing DivisionChina Chemical
  Pharmaceutical Co., Ltd., Taiwan
• Chairman of the Board PresidentChina Chemical
  Pharmaceutical Co. Ltd., Taiwan

2
Pharmaceutical Industry in TaiwanChina
Chemical Pharmaceutical Co., Ltd.(CCPC)

• By Derek Wang
• Chairman of the Board
• CCPC

3
Outlines

• Global Pharmaceutical Industry Overview
• Characteristics of Pharmaceutical Industry in
  Taiwan
• Current Status of Pharmaceutical Industry in
  Taiwan
• Development of Pharmaceutical Industry in Taiwan
• China Chemical Pharmaceutical Group
• CCPC in Changing
• CCPC in China
• Vision of CCPC

4
Global Pharmaceutical Industry Overview
5
Global Pharmaceutical Industry Overview (1/2)

• Pharmaceuticals
• Definition
• National Health
• Pharmaceutical Tightly Related to National Health
• High Cost Time-Consuming in RD
• In US Europe, New Drug Averagely Takes 1015
  Years with Cost of USD 600800 Million Per Item
  to Develop
• Patent-Oriented, Quality-Oriented,
  Brand-Oriented
• Why Not Make Viagra?
• IV Solution VS Mineral water
• Panadol

6
Global Pharmaceutical Industry Overview (2/2)

• Three Major Product Types
• Brand Name
• Generics
• Over-The-Counter

7
Characteristics of Pharmaceutical Industry in
Taiwan
8
Characteristics of Pharmaceutical Industry in
Taiwan

• Multiple Items with Small Quantities Domestic
  Market-Oriented
• CCPC Manufactures Markets Over 300 Items Yet
  Over 90 of Sales Is Domestic
• Severe Competition Due to Low Entry Barrier
• Drug Licenses Easy to Obtain Low-End Production
  Equipment Available
• Market Determined by Government Policy (NHI
  National Health Insurance)
• Reimbursement Prices Determine Fate of
  Pharmaceutical Companies
• Innovation thru Biotech Development
• Pharmaceutical Industry Development Closely
  Linked with Biotech

9
Current Status of Pharmaceutical Industry in
Taiwan
10
As of June 2002, Numbers of Pharmaceutical Plants
In Taiwan

• Pharmaceutical Formulation Plant
• GMP (19821988) 245
• cGMP (19992004) 150
• API (Active Pharmaceutical Ingredient) or Bulk
  Material Plant 35
• GMP to be Complete by June 2004
• Chinese Medicine Plant
• GMP Concentrated or Scientific Chinese Medicine
  Plant 61
• GMP Traditional Chinese Medicine Plant 15
• Traditional Chinese Medicine Plant (GMP By Feb.
  2005) 167

GMP Good Manufacture Practice cGMP current
Good Manufacture Practice
11
Pharmaceutical Market (1/3)(20012003)
Unit NTD Million
12
Pharmaceutical Market (2/3) (20012003)
2001
2002
2003
13
Pharmaceutical Market (2/3) (20012003)
14
Factors Influencing Taiwan Pharmaceutical
Industry(1/2)

• Implementation of cGMP Guide Lines
• Pharmaceutical Plants Fail to Comply with cGMP
  Will be Forced to Withdraw from Market
• Implementation of National Health Insurance
  Policy
• NHI Insurance or Welfare?
• Differences Between Taiwan USA Medical Systems
• Local Pharmaceutical Companies VS Multinational
  Pharmaceutical Companies
• Continue Cut-Down on Reimbursement Prices
• Result?

15
Pharmaceuticals Consumption in Amount
(2002)Local VS Foreign Imported
16
Factors Influencing Taiwan Pharmaceutical
Industry(2/2)

• Unable to Develop New Drugs
• Local Pharmaceutical Companies Unable to Conduct
  New Drug Development without Government Support
• Growing Population of Elderly
• Increasing Demand of Chronicle Drugs Drugs with
  New Delivery Systems

17
Obstacles Problems(1/2)

• Lack of Global Competitiveness
• To Compete in Global Markets New Drug or Pricing
• Taiwan Pharmaceutical Companies Cannot Yet
  Develop New Drugs
• Production Cost Cannot Compete with India or
  China
• National Health Insurance Policy
• Deficit of National Health Insurance Bureau
  Results in Continue Cut-down of Reimbursement
  Prices
• Multinational Company Products Imported
  Products Take Only 30 in Volume Yet 70 of Total
  Reimbursement
• Off-Patent Products Original VS Generic

18
Obstacles Problems(2/2)

• Too Much Focus on Biotech Yet Oversight on
  Pharmaceutical Industry
• Government Funds Favor Biotech Companies over
  Local Pharmaceutical Companies
• Most Pharmaceutical Plants Cannot Meet Economical
  Production Scale
• Too Many Small Mid-sized Pharmaceutical
  Companies in Market with Secondary Class Quality
  Cut-Throat Prices

19
Development of Pharmaceutical Industry in Taiwan
20
Strategies of Development ofTaiwan
Pharmaceutical Industry(1/2)

• In-house RD or Contracted RD to Develop New
  Drugs Technologies
• New Drug Development Must Have Government
  Involvement
• New Technologies
• Joint of Resources from Both Private Public
  Resources
• Join Forces of Academic Institutes, Research
  Labs, Government Agencies Pharmaceutical
  Industry for Future Development
• Marketing Personnel for Domestic Overseas
  Markets

21
Strategies of Development ofTaiwan
Pharmaceutical Industry(2/2)

• Economical Production Scale thru Merger,
  Acquisition or Strategic Alliance
• Merger or Alliance Among Small Or Mid-sized
  Pharmaceutical Companies to Meet Economical
  Production Scale
• Innovation RD thru Biotech
• Biotech Pharmaceutical Industry Two Path Bound
  to Cross Each Other
• Consistency in Policies Friendly Environment
  for Pharmaceutical Industry
• Government Gave in on cGMP Implementation under
  Pressure
• Unreasonable Reimbursement Prices of NHI Force
  Pharmaceutical Companies to Compromise in Quality

22
China Chemical Pharmaceutical Group
23
Strategies of Development of CCPC(1/5)-
Production

• First In Taiwan to Comply with cGMP Guide Lines
• With Investment of NTD 30 Million to Meet cGMP
  Requirements
• Development of New Process Technology Platforms
• Controlled Release, Sustained Release
• Osmotic Pump
• Major Toll-Manufacturer in Taiwan for Foreign
  Pharmaceutical Companies
• Currently Toll-Manufacturing for Johnson
  Johnson, Pfizer, Takeda Etc.

24
Strategies of Development of CCPC(2/5)-
Production

• To Grant FDA (Food Drug Administration, USA)
  Approval for Export to USA Europe
• Transfer of Production Management Know- How
  thru Investment JV (Joint Venture)
• Currently Working with US Company to Set up Plant
  in Singapore, Providing Know-how in Production
  Management
• Integration of Production Resources of CCPC,
  Taiwan SCCPC, China

25
Strategies of Development of CCPC(3/5)- RD

• Continue Development of Generic Drugs
• Constant Launching of New Generic Drugs
• Development of Unique Technology Platforms
• Increase Added Value of Existing Generic Drugs

26
Strategies of Development of CCPC(4/5)- RD

• RD of Herbal Medicines Combination
  Formulations
• Herbal Medicines New Trend in Pharmaceutical
  Nutriceutical Industries
• Combination Formulation More Effective
• RD of Nutriceutical Products
• Prevention over Curing
• Integration of RD Resources of CCPC, Taiwan
  SCCPC, China
• Firm Foundation of Taiwan Human Resources of
  China

27
Strategies of Development of CCPC(5/5)- Marketing

• Increase of Market Share in HP, GP DS
• To Replace Originators Products with BE Products
• Development of New Sales Network Nutriceutical
  Products
• Manufacture of Nutriceutical Products with
  Pharmaceutical Standards
• Customer-service-oriented Business
• Customer Needs Core Business of CCPC
• Alliance with Medical Sector Pharmaceutical
  Industry

28
CCPC in Changing
29
CCPC in Changing (1/2)

• Continue to Focus on Core Business, Expedite RD
  Bring in New Products by CCPC Overseas Partners
• Strategic Alliance with Other Pharmaceutical
  Companies
• Quick Flexible Response to Customer Needs
  Market Changes
• Nutriceutical Products Healthcare Services
• Involvement in Biotech Investment Development
  Both Domestically Globally

30
CCPC in China
31
Chronicle (1/2)

• 1993
• SCCPC Founded (Suzhou Chung-Hwa Pharmaceutical
  Chemical Industry Co., Ltd.)
• Construction of SCCPC Plant Began
• First JV from Taiwan Pharmaceutical Company
  Approved by China Government
• 1996
• SCCPC Plant Completed Production Began
• Product Lines Include Tablets, Capsules,
  Injectables Solutions

32
Chronicle (2/2)

• 1998
• Passed GMP Inspection by SDA (State Drug
  Administration, China)
• 2001
• Granted ISO-9001 Certificate
• 2002
• Granted ISO-14001 Certificate
• Joint RD Center by CCPC SCCPC Founded

33
What We Are Doing

• Setting up Domestic Overseas Sales Network thru
  Direct Sales Agencies
• Acting as Toll-Manufacturer in China for Taiwan
  Multinational Pharmaceutical Companies
• Integrating Resources Across Taiwan Strait to
  Develop New Drugs
• Transforming into Life Science Industry
• Establishing Strategic Alliances
• Scheduling Public Listing in Capital Markets

34
Vision of CCPC
35
Our Vision

• Joint Forces of CCPC, Taiwan SCCPC, China, Will
  Transform CCPC into a Life Science Group with
• Best Innovation (Business Units Products)
• Best Service (Market Customer Needs)
• Best Profitability (Sales Profit)

in Greater China