Thailand Pharmaceutical Industry Analysis: Market Trends, Growth Opportunities, and Challenges in 2025

Introduction

The pharmaceutical industry in Thailand is one of the largest in Southeast Asia. The primary export markets for the country’s pharmaceuticals and medical supplies include Vietnam, Myanmar, and Cambodia. Based on Statista, in 2023, Thailand’s pharmaceutical market ranked as the third-largest in Southeast Asia, with a market value of approximately 212 billion Thai baht. According to a Krungsri study, from 2025 to 2027, the pharmaceutical industry in Thailand is projected to continue its growth, with domestic drug sales expected to increase by 6.0-7.0% annually.

This growth is supported by Thailand’s ongoing efforts to strengthen its healthcare infrastructure, focusing on enhancing the medical supply chain and improving healthcare service delivery. Several factors contribute to this expansion, including the rising number of patients suffering from both communicable and non-communicable diseases (NCDs), re-emergence of infectious diseases, climate change, and improved access to healthcare services.

Market Overview

Modern pharmaceutical manufacturers in Thailand are expected to see continuous revenue growth, fueled by an increasing patient base and improved access to medications through government health insurance systems. Pharmacies play a crucial role in expanding distribution channels, contributing to the overall growth and accessibility of the pharmaceutical industry in Thailand.

The market remains intensely competitive, with foreign pharmaceutical companies in Thailand capitalizing on advanced technology and strong financial backing. The industry’s heavy dependence on imported raw materials and the necessity to adjust production methods pose major challenges, which could impact the profitability of Thailand’s pharmaceutical sector.

According to a report from the National Health Security Office (NHSO), chronic diseases account for 76.6% of all deaths in Thailand. Consequently, the demand for medications to treat non-communicable diseases (NCDs) is expected to rise. Between 2023 and 2025, the prevalence of chronic conditions such as diabetes, hypertension, and heart disease is projected to increase, requiring patients to undergo continuous treatment and medication.

The pharmaceutical industry in Thailand demands substantial investment in research and development, particularly in sourcing new raw materials and active ingredients. Developed nations excel in this sector due to their advanced production technologies, skilled workforce, and extensive scientific expertise. Consequently, these countries serve as the primary hubs for pharmaceutical and medical supply manufacturing, especially for original drugs.

Key Market Segments

In Thailand, the pharmaceutical industry is categorized into two main types: original drugs (patented drugs) and generic drugs.

Original drugs require substantial investment, as their development entails rigorous research and a lengthy evaluation process. Manufacturers are granted exclusive patent rights, typically lasting around 20 years. The primary purpose of these exclusive rights is to incentivize businesses in the pharmaceutical sector in Thailand, encouraging innovation and the development of new drugs.

Generic drugs are developed by replicating the formula of original drugs that have expired patents. Their production costs are significantly lower than those of original drugs, yet they offer the same therapeutic effects. This cost reduction is primarily due to the use of more affordable raw materials and the absence of expenses related to drug research and development within the pharmaceutical industry in Thailand.

Domestically, the distribution is divided into two categories: prescription drugs, sold through healthcare facilities, and over-the-counter (OTC) drugs available without a prescription. About 80% of the total market value comes from drugs sold through healthcare facilities. According to Speeda, only about 10% of the total production is exported, while almost all of Thailand’s pharmaceutical production is for domestic use. The main distribution channels in the domestic market are 80% through hospitals (comprising 60% through public hospitals and 20% through private hospitals).

In terms of the herbal market, the export value continues to show an upward trend. According to Bangkokbiznews, the global herbal product market is valued at approximately $60,165.5 million, with 57.6% of the market concentrated in Asia. Thailand is the leading exporter of herbal products in ASEAN and ranks 7th globally in herbal product consumption. Within Asia, Thailand holds the 4th largest herbal market, following China, Japan, and South Korea.

According to the Department of Business Development, foreign investment in Thailand’s herbal industry amounts to 38,707.25 million THB, accounting for 26.23% of the total investment in the sector. Meanwhile, Thai investors contribute 108,873.59 million THB, accounting for 73.77%. Among foreign investors, the United States leads with 11,809.12 million THB (30.51%), followed by Japan at 5,082.04 million THB (13.13%) and Singapore at 3,274.73 million THB (8.46%).

Major Pharmaceutical Companies in Thailand

The pharmaceutical industry in Thailand can be categorized into two main groups: public sector agencies and private pharmaceutical companies.

The public sector consists of the Government Pharmaceutical Organization (GPO), which serves as a key manufacturer of essential medicines, and the Military Pharmaceutical Factory, focusing on producing generic drugs for domestic distribution.

Private pharmaceutical companies in Thailand can be classified into two groups:

1. Thai-owned pharmaceutical companies that primarily focus on manufacturing generic drugs at affordable prices, with notable examples including Biopharm Chemicals and Siam Pharmaceutical.
2. Multinational pharmaceutical companies (MNCs) in Thailand, which are predominantly foreign-owned. Some of these companies import original drugs, often sold at higher prices, while others have set up local facilities for pharmaceutical production.

Based on the Krungsri study, in 2023, Novartis was the private pharmaceutical company with the highest market share in Thailand in terms of revenue, followed by Mega Lifesciences PTY, Boots Retail, GlaxoSmithKline, Pfizer, and AstraZeneca.

Thailand has been placing greater emphasis on enhancing its pharmaceutical manufacturing capabilities and infrastructure. Events like CPHI South East Asia 2024 highlight the country’s efforts to strengthen its healthcare and pharmaceutical industries, aiming to position Thailand as a regional Medical Hub. To achieve this, strategic investment promotion is essential, particularly in areas such as biopharmaceuticals, biosimilars, biotechnology, and medical devices.

Regulatory Framework

According to the Food and Drug Administration (FDA) of Thailand, there is a regulated process for the manufacturing, importing, or ordering of drugs into the country.

For finished pharmaceutical products intended for general sale, manufacturers or importers must first obtain a license for a drug facility. Once licensed, the product must be registered with the FDA. Registration documents must adhere to either the ASEAN Common Technical Dossier (ACTD) or the ICH Common Technical Document (ICH CTD) guidelines.

For active pharmaceutical ingredients, these must be classified as pharmaceutical chemicals and meet the FDA’s manufacturing standards, such as GMP standards.

In terms of medications pricing, especially those used in public hospitals and health services, are regulated by a median price policy established by the Ministry of Commerce. The private hospitals and pharmacies have the flexibility to set their own prices. The Drug Act, B.E. 2510 (1967), and the Medical Device Act, B.E. 2551 (2008), govern the regulation and post-market surveillance of pharmaceuticals, biologics, and medical devices in Thailand.

Government Initiatives and Support

The strategy for developing Thailand into an international Medical Hub for the years 2025-2030 aims to make Thailand a center for healthcare services in four main areas:

1. Medical Service Hub
2. Wellness Hub
3. Pharmaceutical and Health Products Hub
4. Academic and Research Hub

Thailand aims to become a global health destination by leveraging technology and innovation to drive the comprehensive medical industry. This development is part of the New S-Curve strategy, which focuses on reducing disparities in healthcare access and aligns with the Thailand 4.0 policy.

The government is actively fostering growth by providing initiatives that create a favorable environment for pharmaceutical companies in Thailand. These efforts include offering substantial tax and infrastructure incentives through the Board of Investment (BOI), such as corporate income tax breaks for innovation-driven projects. Additionally, the Eastern Economic Corridor (EEC) supports the country’s focus on high-tech industries, offering resources that facilitate the full R&D and innovation development process.

Key Industry Service Providers

Among the specialized service providers supporting the pharmaceutical industry in Thailand is Iconic Research, a comprehensive consultancy that offers market entry and business development solutions. With deep expertise in Thailand’s pharmaceutical regulatory landscape, Iconic Research helps international pharmaceutical companies navigate the complex registration processes, secure necessary permits, and establish strategic partnerships with local distributors.

Market Trends and Opportunities

Due to the increasing number of people returning for treatment at hospitals and the growing global trend towards health care focused on building immunity, along with Thailand’s imminent transition into a complete aging society, the demand for medicines in the healthcare system is continuously expanding. In 2023, Thailand had approximately 12.8 million elderly people, accounting for 19.40% of the total population. The aging population is one of the key drivers of growth in the pharmaceutical industry in Thailand.

Thailand is working to advance its medical services, with a particular emphasis on Digital Health and Telemedicine. These areas have gained significant momentum, especially in response to the COVID-19 pandemic. The widespread adoption of digital technologies has transformed healthcare, with medical technologies becoming more integrated into hospitals.

During the peak of COVID-19, Chulalongkorn Hospital implemented Telecon, a secure telemedicine system that allows patients to consult with a doctor remotely. This evolved into a chat-based system on LINE Chat, called Chula COVID-19, and was further developed into app-based platforms, Chula Teleclinic and Chula Care.

Challenges and Barriers

One of the challenges the pharmaceutical industry in Thailand faces is a long-standing shortage of skilled healthcare professionals, particularly doctors. This issue is largely due to the lengthy medical training process, as it takes over a decade to become a specialist.

According to the WHO ratio for doctors to the population is set at 1 doctor per 1,000 people. While Thailand’s actual ratio has historically ranged between 0.5 to 0.8 doctors per 1,000 people. A study conducted by Health Systems Research Institute (HSRI) and research team from Human Resource for Health Research and Development Office (HRDO Thailand) shows that factors influencing the retention or resignation of newly graduated doctors in the public healthcare system include compensation, working conditions, and personal factors.

COVID-19 Impact and Recovery

The COVID-19 pandemic caused a decline in pharmaceutical demand due to the cancellation of medical activities and reduced seasonal illnesses. At the same time, supply chains were disrupted by global travel restrictions, leading to delays and increased competition for resources needed for COVID-19 production.

The impact on the healthcare system has been significant, especially in the management of medicines and medical supplies. One of the key changes has been the integration of technology in patient care and treatment. For instance, patients can obtain prescriptions and medications from local pharmacies without waiting long hours at the hospital. The effect of COVID-19 has led to the rapid approval of new medicines and vaccines under emergency conditions, alongside the adoption of foreign drug and vaccine production technologies. Furthermore, services such as medication delivery by mail have become increasingly widespread.

The effective management of medicines and vaccines during the pandemic was made possible by timely research and strategic planning for future challenges. These efforts have paved the way for comprehensive policy-level planning to manage health crises more efficiently in the future.

Future Outlook

Thailand’s pharmaceutical industry has the potential to expand beyond generic drug production and move toward innovative drug research and development. With advancements in technology, the country is increasingly capable of manufacturing higher-value pharmaceuticals. Some key emerging trends in PharmaTech to watch include:

1. Generative AI – will play a crucial role in advancing drug formulation by improving effectiveness, ensuring safety, and enhancing the prediction of side effects in clinical trials.
2. Data-driven drugs and personalized medicine – leverage data to develop treatments tailored to individual patients, especially for conditions linked to genetic abnormalities.
3. Biotechnology – Thailand’s strong potential in herbal medicine research can greatly benefit from biotechnology, which enhances the accuracy of detecting the effects of herbal remedies. Additionally, biotechnology is playing a crucial role in advancing biopharmaceuticals, particularly in the development of monoclonal antibodies for targeted cancer therapies.

In 2023, there were 12 pharmaceutical manufacturing investment promotion projects approved by the Board of Investment (BOI), with an estimated value of approximately 1 billion baht. This reflects the continuous growth in investment, alongside ongoing research and development in Thailand’s pharmaceutical industry.

Conclusion

The pharmaceutical industry in Thailand is experiencing significant growth, driven by government investments in technology and research, with the goal of establishing the country as a medical hub. The integration of technology into healthcare, particularly during and after the COVID-19 pandemic, has been a key factor in this progress.

The industry is expected to continue expanding, with an increasing focus on both original and generic drugs, as well as the growing herbal medicine market, which shows strong export potential. However, challenges remain, including the reliance on imported raw materials, the need for continued technological advancements, and the push for more sustainable manufacturing processes.

As Thailand continues to strengthen its position in the global market, pharmaceutical companies in Thailand will play a crucial role in shaping the future of healthcare in the region.

• Healthcare Industry