This is a major advance toward the goal of establishing Asean as one of the world’s largest integrated common markets.
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam established the Asean Economic Community, a single market and production base to promote free movement of goods in the region. Healthcare, encompassing health supplements, was identified as one of the priority integration sectors to pave the way for the AEC.
Asean boasts a population of over 630m with a GDP of US$2.5tr, making it the seventh-largest economy in the world.
In 2014, the health supplement market size in ASEAN was estimated at US$6bn with an annual growth rate of 10% providing income for more than 10m people.
The Asean Regulatory Framework Agreement for health supplements outlines the scope of the implementation of the harmonised standards. This agreement is currently in the stage of legal review and endorsement by the Asean committees. The final signing by the Asean Economic Ministers is planned in 2017.
Training workshops on the standards are currently in progress or the planning stages. The member states have five years after the final signing of the agreement to ratify and transpose the standards into their respective regulations and to bring the standards into force at the individual country and regional levels.
Harmonising the standards and technical requirements is anticipated to reduce transaction times, avoid unnecessary costs caused by multiple testing requirements, and lead to increased efficiencies amongst Asean members without compromising public health and safety.
For instance, the current country-specific maximum levels of vitamins and minerals means companies must supply different formulas across the region. A common standard for maximum levels based on scientific assessment of safe amounts is expected to reduce the number of different formulas.
Moreover, according to feedback gathered from each country’s national consultation process, views from consumer groups and academia are supportive of the common standards and believe it will strengthen consumer protection by having products with defined safety, efficacy and quality standards.
A potential complication is that the regulatory frameworks in the member states are vastly different from one another. For example, Brunei Darussalam and Singapore place greater emphasis on post-market surveillance, while the rest of the member states have a pre-market-approval system.
In seven of the 10 member nations, health supplements are regulated by drug agencies. The countries are in various stages of economic development, and implementation will be gradual in nations that have no specific guidelines for health supplements, including Cambodia, Laos and Myanmar.
The time to gain approval may not change even after nations update their laws to meet Asean standards as the process required to put a product on the market, such as notification or registration, was not included in the initial areas to harmonise.
It is important for companies to take note that although Asean will be using the same standards and technical requirements, they will still need to seek approval from each country’s authorities in order to bring the products into the market. A company still has to submit notification or registration in each Asean nation individually.
The Asean agreement does not provide for mutual recognition at the regional level. Notwithstanding the full compliance of the product to the Asean technical standards, the product has to meet the national requirements of the respective member states. This means that a company in Member State A that wishes to export its product Member State B will have to abide with the requirements of Member State B.
But the requirements in Member State B, or in all Asean member states for that matter, ideally should not be more stringent that the Asean harmonised standards and technical requirements.
Companies that are able to comply with the harmonised standards and technical regulations should not have overly burdensome requirements to be allowed in all Asean countries and should benefit from broader access in the region.