Key strategies for pharma’s emerging markets

Why emerging markets are the industry’s best hope for growth



The pharma market landscape is changing, and the emerging markets are the industry’s hope for growth.

In the next decade, the BRICM market (Brazil, Russia, India, China and Mexico) could grow to over $3 billion.

According to eyeforpharma’s Pharma Emerging Markets Report 2011-12, while developed markets are expected to have single-digit growth, the BRICM countries are forecasting 50 percent average growth in the next five years. 

Entering new markets, especially ‘underdeveloped’ markets, is always a challenge.

A primary challenge is understanding local culture and customs.

Another common difficulty is understanding regulatory requirements.

A strategic solution would be to acquire local presence expertise through partnerships.

Brazil

Brazil has the largest pharma market in Latin America.

There have been several major pharma companies expanding here, including GlaxoSmithKline, Novartis and Amgen.

In 2009, Brazil spent 10,8 percent of GDP on pharmaceuticals.

However, intellectual property protection has long been a problem for multinational investors.

In the last few years, Brazil’s population has grown including a growth in the middle class with demand for pharmaceutical drugs.

This and Brazil’s commitment to reforming IP laws is attracting big, multinational pharma companies.  

Russia

The Eastern European market, in particular Russia, has been an engine of growth in

Pharma, especially in the neighboring European Union.

The Russian pharmaceutical market generated $1 billion in 2009, with a growth rate of 14.5%.

Market opportunities include Russians’ preference for ‘foreign’ drugs.

Barriers to entry are regulatory procedures, which are lengthy and unclear, as well as local language. 

India

India is a potential pharmaceutical goldmine.

According to a 2009 report, India’s pharma market is valued at $8 billion and is growing at an average rate of 7.2%.

However, Indian companies have approximately 70% domestic market share.

Multinationals are now attracted to the country’s market potential with a ‘high quality for low price’ strategy, which will require an increase in CRO outsourcing.

In 2005, India passed the Product Patent Act to protect IP.

China

Even if China lags behind India in the global share of the pharma market, the country is expected to surpass India in the next couple of years due to stronger patent laws, medical insurance for its population (which is 20% of the world population), and an increase in drug research sponsorship, with Shanghai becoming an important pharma hub.

Prescription drug sales are expected to increase by $40 billion by 2013. 

Mexico

So, why is Mexico now a part of BRIC?

The government is looking to expand healthcare coverage, increasing the demand for prescription drugs, especially generics.

The market has had an average growth rate of 8.3%, with $14.3 billion in sales in 2010.

In terms of regulatory requirements, Mexico continues to align itself with US standards.

A significant advantage in the Mexican market is access to the Internet.

More pharma companies are able to use the Web to communicate and advertise with patients and pharmaceutical drug users.

Mary Wieder is with Italy-based pharma consultancy Arithmos.

For exclusive business insights in emerging markets, attend Emerging Markets Commercial Excellence on Nov 15-16 in Berlin and download eyeforpharma's Pharma Emerging Markets Report 2011-12.

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