Comments on: Does the Calculus of Big Pharma’s Emerging-Market Growth Strategies Add Up? http://blog.pharmtech.com/2010/05/11/does-the-calculus-of-big-pharma%e2%80%99s-emerging-market-strategies-add-up/ The blog of Pharmaceutical Technology magazine Thu, 09 May 2013 23:30:55 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Peter Thomas http://blog.pharmtech.com/2010/05/11/does-the-calculus-of-big-pharma%e2%80%99s-emerging-market-strategies-add-up/comment-page-1/#comment-30045 Peter Thomas Wed, 12 May 2010 15:05:19 +0000 http://blog.pharmtech.com/?p=2830#comment-30045 True, product differentiation will be important and branding is also vital. Generally Big Pharma markets a varied product portfolio in emerging markets owing to different epidemiological profiles and consumer purchasing habits. While the majority of pharmaceutical sales are from developed states, EM sales are set to increase rapidly over the next 10 years. By 2020 EM sales are likely to account for close to 50% of the global market, hence involvement at this stage is vital, particularly for building brand value. I would disagree with many of the figures quoted here, or at least dispute their relevance as a negative factor should they be based in volume terms. Brazil, for example, is by no means highly genericised. Generics, in their official form, only entered the market at the turn of the century and still account for a market share of less than 20% by value. Furthermore the market grew by around 24% in 2009 at constant exchange rate - hardly a low growth market. While volume growth may be minimal in many countries, value growth highlights the importance of branded generics and the ability to charge premiums for products in EMs. Yes there are downsides to the EM play and by no means can you categorise all EMs as equal, or even similar. A strategic approach essential in order to truly capture market potential. However, in light of price erosion and market access constraints in developed states (particularly in Europe), a shift towards EMs from a demographic and economic perspective makes perfect sense. True, product differentiation will be important and branding is also vital. Generally Big Pharma markets a varied product portfolio in emerging markets owing to different epidemiological profiles and consumer purchasing habits.

While the majority of pharmaceutical sales are from developed states, EM sales are set to increase rapidly over the next 10 years. By 2020 EM sales are likely to account for close to 50% of the global market, hence involvement at this stage is vital, particularly for building brand value.

I would disagree with many of the figures quoted here, or at least dispute their relevance as a negative factor should they be based in volume terms. Brazil, for example, is by no means highly genericised. Generics, in their official form, only entered the market at the turn of the century and still account for a market share of less than 20% by value. Furthermore the market grew by around 24% in 2009 at constant exchange rate – hardly a low growth market.

While volume growth may be minimal in many countries, value growth highlights the importance of branded generics and the ability to charge premiums for products in EMs.

Yes there are downsides to the EM play and by no means can you categorise all EMs as equal, or even similar. A strategic approach essential in order to truly capture market potential. However, in light of price erosion and market access constraints in developed states (particularly in Europe), a shift towards EMs from a demographic and economic perspective makes perfect sense.

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