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Thought leadership and innovation for the Pharmaceutical Industry

Growth markets aren't the future for big pharma, but they could be for new business models and better patient outcomes.

The potential of growth (or emerging) countries is nothing new. However, they’ve yet to be fully unlocked, and in some cases remain elusive.  Quite simply, these regions haven’t delivered on the hopes and promises made 10 years ago - and this is an issue.  Clearly they can’t be forgotten, so where is the potential? 

I’d say we need to look beyond implementing western models and instead, make the patient and their outcomes the starting point of the country’s health strategy and work backwards from there.  Countries should identify their problems (the need) and then figure out how to solve it; rather than stock piling solutions and trying to shape a need around them (Re: Tamiflu).  It’s ISO 9001 for healthcare.

Sounds onerous? Well, there are advantages. With less infrastructure to change in growth regions, they have the opportunity to implement a more innovate model.  This requires a change in mindset - historically growth regions have copied the developed world and focused on doing it cheaper in order to carve out their margin. This works well in manufacturing but it doesn't translate to health care.  Growth regions should focus on improving the way that primary care is delivered and move beyond the acquisition price of a drug. 

Fresenius Medical Care is a great example of how this could work. Although it was a long and costly process, the company now operates along the complete value chain of dialysis, including pharmaceuticals for dialysis patients and lab services – despite the fact they were originally a device firm. They have successfully proven that it is possible to deliver better outcomes, reduce costs for the state - and make money for themselves at the same time. My suggestion is pretty much a franchise model and whilst it may seem fragmented it actually helps to break down the delivery of care as those who win the tender are fully responsible for their own part, rather than the government or a central agency trying to monitor everything. 

This kind of model was discussed at length during the recent eyeforpharma Barcelona conference, and was a key feature within my Value Added Services Report.  For the developed world it requires too much change; our healthcare system is so developed that we can’t just start again. I’m sure it will eventually happen, but not for a long time and not until we’ve wasted even more money.

To give a suggestion of where and how it could work, let’s take Diabetes in the Persian Gulf.  Here, 1 in 5 people have diabetes - Kuwait, Saudi Arabia, and Qatar are in the top 10 nations globally for the highest prevalence of the disease.  In total, diabetes affects 34.6 million people and costs the region around $12 billion each year, and according to the International Diabetes Federation this will only get worse - the number of people affected (in this region) is forecast to grow to 67.9 million by 2035.  Despite all the oil money, the Persian Gulf’s healthcare system is still very much in its infancy with only around 2% of GDP being spent on healthcare. The system as a whole needs some help.  Each country, (or the region as a whole) should seek to partner with (or tender out to) pharmaceutical companies who can devise the specific solution they’re able to offer, based on the facts in hand.  An obvious KPI would be to reduce the forecasts of diabetes prevalence within the population; this could even form part of a risk sharing agreement.  Note this strategy isn’t unique to the Persian Gulf, nor diabetes - it could be rolled out in most countries for a variety of diseases.

Ultimately growth markets need to be brave and take advantage of their opportunity to try something new.  Fresenius world has shown them the door, now they need to walk through it.  

For more examples of successful value added services case studies, download the free Report Extract from the Value Added Services report here.