Pharma Product Manufacturing is increasing its markets abroad, but growing market share in Cambodia is tough, says company Vice President Sean Sokha.

CEO TALK

By Ith Sothoeuth

Pharma Product Manufacturing announced plans last week to double the number of foreign countries it exports to from 15 to 30 in response to rapid growth offshore. What’s the market like at home, and how is PPM doing here?

Including imported and domestically manufactured products, some US$200 million worth of pharmaceutical products are sold in Cambodia every year. Khmer-made medication makes up 20 percent or less of that number.

Of that 20 percent, we control about 5 percent, and the rest is made by the seven other firms in the country.

Can you put a number on that, and what kind of products do you make?

It is difficult to determine the overall number of pills we manufacture, but we produce between $10 million and $20 million worth of medicine every year.

We presently make 300 different forms of medicinal products, including syrups, pills and capsules, as well as the packaging for these products. No Cambodian firm produces syrups other than PPM. We have plans to eventually produce vaccines, but it will not be easy. It requires a laboratory, good equipment, and complicated techniques to control the vaccine.

Why do local firms have only 20 percent of the local market, with foreigners controlling the rest?

Our major challenge in the local market is pricing. Our products are a bit more expensive compared to other locally made medications and also imports from Vietnam, Indonesia, India and Thailand. But that is because our products are higher quality.

Medicines made in Thailand and Vietnam are generally cheaper than ours, not because of production costs, but a variety of other reasons, such as taxes and other costs that can be avoided by importing. Some firms pay [tax], and some don’t, but I don’t want to comment more on this.

There’s probably not much you can do about the price disadvantage, but what else can PPM do to grow market share?

PPM is committed to strengthening its manufacturing capacity while advising people on the effectiveness of using our products. Cambodians value medicines made aboard as higher quality than domestically produced products, but PPM is trying to change that view. We want Cambodians to know that Cambodian firms have the ability to produce high quality medication at reasonable prices.

Counterfeit and smuggled medicines are of major concern in Cambodia, both as a potential health issue and in protecting the intellectual property rights of firms that develop drugs. What is PPM’s position on the issue?

It’s the responsibility of the authorities and the health ministry to solve the problem of counterfeit and smuggled medicinal products. We don’t know how to deal with the problem.

It’s natural to want cheaper medicines, but people have to recognise ours are higher quality products. Vendors can also deceive their customers. For example, when customers buy a large quantity of medicine, sometimes an amount of pirated products are slipped in, instead of the legitimate products.

What is your vision for the future of Cambodia’s pharmaceutical market?

People are beginning to learn more about taking care of their health. As people grow healthier, the demand for medication will decline.

Therefore, the estimated per year $200 million size of the domestic pharmaceutical market will not grow much higher; I predict it will stay the same size for a number of years.