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BRIC 'not delivering' on promises of high growth

Frost & Sullivan report highlights the difficulties for pharma working in BRIC markets

BRIC 'not delivering' on promises of high growth

Pharma is not getting the type of growth it expects from the top four emerging markets and must adapt to find new ways of harnessing value.

This is according to a new report by analysts Frost & Sullivan, which says that pharma firms expanding into emerging markets like Brazil, Russia, India and China (BRIC) are realising “there are no shortcuts”. 

The report says this is proving particularly challenging considering the current healthcare environment, especially in the US and Europe where pricing pressures are increasing.

Frost & Sullivan said that companies must change the dialogue around BRIC, as it is now about establishing value, customising to local needs, and building regional partnerships to build a sustainable business.

“While mature economies across the globe grapple with reducing cost, towering budget deficits, and anaemic growth, the BRICs are expanding rapidly and driving the global economy,” said Frost & Sullivan partner Reenita Das.

“Although emerging markets are often touted as the way forward for healthcare companies, recent protectionism laws and fierce competition from generics may have reduced the appeal of countries such as India and China, leading some to believe they aren't the 'promised land' they once were.”

Overall, the market is witnessing a slowing of growth, according to Frost & Sullivan, and the industry is also seeing a changing attitude from regional BRIC governments, which the report said is 'perplexing'. 

Examples include India, which introduced price cuts to make drugs or devices like stents more accessible to patients. China plans to introduce a fast-track approval process for new drugs that could exclude firms that have not conducted clinical trials in the country. 

Meanwhile, Russia is proposing to limit the state purchasing of foreign medicines, and Brazil has introduced higher import tariffs to encourage local industry.  The report warns that these trends impart a mark of further protectionism and control by the state, and adds that more is expected to come.

“The success in the region will be less about emerging markets being cheap and more about how companies can capture the growth in these markets moving forward,” said Das. 

“There is a real chance for the industry to innovate in emerging markets by using disruptive technology and establishing a new commercial model that has the potential to become a relevant option for use in the developed world as well.”

Das concluded: “It is very clear we need to rethink emerging market strategies and start changing the dialogue. We must move away from looking at it as a volume business in terms of large number of patients and demographics to more about where we can deliver the value to create the access that is required to meet demand.”

For more on the impact of the BRIC nations, read our Pharma and BRIC supplement

20th June 2013

From: Sales



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