Exporting Pharmaceuticals

Service First

According to Paradine, cost is a factor but is of little importance compared with reliable service which enables companies to streamline their product life cycles. "What a pharmaceutical demand planner will say is they want quality of service and regular service so they can manage their inventories and keep product loss or damage at a minimum. Cost really doesn't come into it."

By the time products reach Paradine, companies should have everything in order but he still needs to make sure his clients have all the necessary paperwork before he can move the freight. He advises that companies do their homework. "Knowing your export market, knowing how you're going to sell the product and make it available for sale is 99 percent of the way there," he says. "If they do that research properly at the beginning and have their approvals to sell the product into the export market, the rest can look after itself."

Access to the market is another important consideration. Crowley says the Japanese market has been good to them. "Japan is good due to a significant history of trade there, the regulatory framework is set up. Culturally they’re good to do business with–their word is their bond." Lewis nominates the US as one of the easiest export countries for complementary health products, but warns it's also a saturated market.

On the flipside, Crowley singles out Europe as a difficult customer "due to regulatory changes that the member states are often disagreeing about for our type of materials. There are many grey areas”. Lewis says Chinese provinces present similar disparity. "In China you have to go through separate regional authorities to get your product approved and the cost is enormous, which I think is an export barrier. The market is potentially huge so it's tempting. Culturally it's quite different, so it's quite a risky venture."

Cultural considerations usually apply to pharmaceutical products derived from animals, and companies need to be careful exporting products derived from pigs to Jewish or Muslim countries, for example. Generally, however, synthetically produced goods and most plant-derived materials are culturally acceptable.

Finding Partners

Partnering with a marketing or distributing company in the destination country is also a smart move. One way to find a partner is to look at the various associations in the pharmaceutical industry of the destination country, for example the CHC equivalent in any country will probably belong to the International Alliance of Dietary/Food Supplement Associations (IADSA). Another way is simple word-of-mouth. "You want to get the right advice about your partnership before you get into it. It’s usually done on the recommendation from someone who has already used them and knows they’re honest and scrupulous and hard-working with all the support that your products are going to need," says Lewis.

Paradine agrees, saying partnering is a popular way to expedite the process. "The disadvantage would be if you don't partner properly. You run the risk of your product not getting where it should be in the time frame expected."

In Paradine's experience, not many small pharmaceutical companies export products. He says he tends to see more imports, for starters, and notes, "the number of small pharmaceutical companies around is fairly small compared to what the big guys do". But most exporters he sees are successful. "It's a very mature market. Very rarely does something move that doesn't have a specific requirement on the other end. They have the luxury of a stable supply chain. It keeps things ticking along.”

From a complementary health perspective, Lewis says the 2003 Pan Pharmaceuticals manufacturing scare still affects companies today. "Blackmores has a lot of export markets around the region. One of the reasons they're successful is that when the Pan crisis happened they weren’t affected, because none of their products were manufactured by Pan. Other companies had their products manufactured by Pan and their products were taken off shelves and destroyed. A lot of those companies never got back into the export market.”

The difficult part of exporting pharmaceuticals is the initial paperwork, but it may just be the right time to start the process before the market becomes crowded. When the regulatory environment opens up in the near future, you should be ready.