"We can't limit ourselves to this country alone as the local drug industry is growing modestly due to the reduction of government spending on medical allowances for civil servants. We should explore opportunities in other Asean countries where growths remain high," said CEO Prasert Vaiyavatjamai.

The local drug industry grew by only 2 percent last year, down from 12-13 percent in recent years, and the trend will continue this year as the government continues to cut medical allowances for civil servants to crack down on past abuses of the system.

Local producers, he said, should look at other high-potential countries such as Vietnam, the Philippines and Indonesia. Demand for Thai herbal products is strong, as seen in the good response to local brands at health and beauty fairs in many Asean countries.

"But Thai producers have to be concerned about their patent registration for drugs or 'cosmeceutical' products in every country they go to," said Mr. Prasert. "Moreover, they should have reliable distributors to ensure that they can collect money when they sell their products."

Nowarat Wongrasameetong, a PHCG director, said patent registration was a time-consuming process, taking at least two years in many Asean countries. If foreign companies do not have sufficient knowledge and good preparation, they may possibly face long delays and some documents related to important drug formulas may be lost.

At home, Mr Prasert said most local drug producers and distributors feel uncertain as the healthcare services policies of the incoming Pheu Thai government remain unclear. They also realise they must prepare as some Asean drug and healthcare companies are going to enter the Thai market soon.

Apart from going abroad, Thai drug and healthcare players have to increase their competitiveness to guard their markets at home.