Emerging Markets
profit on drugs distributed, so physicians
managing risks and challenges
employed in the US or Europe return to
tend to prescribe drugs that are financially
Entering any new market, whether domestic
their native countries demanding salaries
favourable, but which may not be the best
or international, involves inherent risks. Yet
comparable with those paid in the west.
choice for a particular patient. Physicians are
only 64% of companies with headquarters in
Setting appropriate drug prices poses a
government employees who obtain and
the pharmerging markets have documented
major challenge in pharmerging markets.
distribute products based on local
risk management strategies that cover these
Clearly, price must reflect the costs of
requirements; they cannot be approached
countries, and only 33% of firms in developed
development and manufacturing, but drugs
directly by pharmaceutical representatives.
markets have such strategies.
must also be affordable and acceptable
according to the healthcare policies of local
India
Risk management plans should consider
risk/benefit trade-offs based on short- and
governments. Competing with local
India is another country with a large
long-term revenue, investment required,
companies must have a positive effect on the
population and a healthy GDP growth rate.
capability and fit, technical risk and market
local economy, balancing benefits for the
Improvements in education and the growing
risk. Risks may also include abuse of IP rights,
company against benefits for the country.
middle class will create increased purchasing
contradictory regulatory issues, corruption
Opportunities in the pharmerging markets
power, leading to demand for innovative
and entrenched local competition for the
are not limited to drug sales, and companies
drugs and medical treatments. Currently, the
generic drug market. Additionally,
may benefit by reducing the costs of
Indian pharmaceutical market is under-
pharmaceutical executives in developed
manufacturing and providing additional
penetrated and underserved. The
markets named infrastructure instability,
supplies of product, rather than by increasing
government’s key policy priority of creating
political unrest, excessive regulatory
sales. Other options for western players
wide access to healthcare will create
requirements and the pool of inexperienced
include drug discovery and discovery
efficient infrastructures and increased
workers as concerns.
servicing, including biology, chemistry, and
reimbursements that will help to foster
screening services; local and global preclinical
pharmaceutical growth and development.
The varying infrastructures of the
and clinical development; IT and
pharmerging countries offer diverse
The strategy of outsourcing support staff manufacturing services; drug ingredient
opportunities for business development. For
to India has been extremely successful for a sourcing; and local and regional medical
example, South Korea is a highly developed
number of western (non-pharma) support.
country with a strong infrastructure. The
companies, and the country is viewed as an
Indian infrastructure supports the
ideal venue for pharmaceutical outsourcing
future of global marketing
development of many small companies. It is
as well. Indian companies have demonstrated
As education and personal income in the
rumoured that China has $2,500 billion to
expertise in chemical engineering and cost-
pharmerging markets improve, demand for
invest in the pharmaceutical industry, but
efficient manufacturing. For example, if the
premium drugs and related services will
disputes about IP rights are preventing
indexed total manufacturing cost per unit in
increase. Increasing presence and profits in
disbursement of these funds and
a typical European manufacturing plant is
these markets will depend on partnerships
unfortunately, this is having a negative effect
100, an Indian manufacturer, using 90%
between western and local companies. Social
on research.
Indian raw materials, will be able to produce
responsibility will require that healthcare
the same product for an index total of 57.
Political unrest is becoming less
access be made available to people of any
problematic as the benefits of maintaining
In addition, Indian support for pharma’s
age, health, wealth, status or location. Ensuring
stability in today’s global marketplace become
clinical research activities has increased
ready availability of health services will
more apparent. Marketing success requires an
because of the wealth of local IT expertise,
require cooperation with local and national
understanding of the key local markets,
but clinical trials have been limited because
governments.
cultural beliefs, and allowable practices to
of the lack of medical expertise. Research
Clinical research in the pharmerging
ensure the integrity of a pharmaceutical
physicians tend to have expertise only in
markets should occur at local levels,
product from the point of production to the
selected therapeutic areas (such as
employing experienced clinical research
point of dispensing.
oncology).
workers who are familiar with both local and
With strong government support for global processes and quality programmes.
other markets
reimbursement, South Korea has few Short-terms goals for success in the
Smaller countries in IMS’s pharmerging
problems with excess regulation; entire pharmerging markets should focus on
markets classification offer advantages and
departments are dedicated to processing preventing and treating communicable
disadvantages similar to those of China and
national reimbursement claims. This contrasts diseases in their vast populations. And the
India.
with the situation in China, where the long-term goals should focus on treating
In Brazil, the recovering economy is
manufacturer must apply to each local chronic diseases. Pharma may best achieve
increasing the size of the country’s middle
authority separately in order to obtain these objectives by exploring opportunities
class and, correspondingly, decreasing the
reimbursement. for growth through vertical integration of
size of the lower-income population. Greater
The pool of scientists and technicians in drug research and development, diagnostics,
availability of disposable income is spurring
pharmerging markets is growing, but growth clinics and pharmacies.
renewed interest in healthcare spending on
is more rapid in some countries than others.
Ultimately, success or failure in pharmerging
both self-care and prescribed drugs. South
India has a wealth of talented, experienced
markets will depend on the quality and
Korea is a very strong reimbursement
and well qualified workers, especially in IT,
integrity of the data collected and accepted
market and traditionally its government has
and strong capabilities in the production of
by key western regulatory authorities.
supported major investments in healthcare.
quality generic drugs. Likewise, South Korea is
Russia has expanded clinical research
strong in the area of generics. And the talent
operations rapidly over the past few years,
pool in China grows stronger every year.
and this will continue with increased access
But the salary burden is increasing,
to patients and improvements in research
particularly in China and India, as local
David Campbell is senior principal, portfolio
quality.
workers who have spent some time
and product services at IMS Health.
www.scripnews.com/supplements Scrip 100
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