Words by Nick Taylor
Developing markets are impossible to ignore. Brazil, Russia, India, and China, collectively known as the BRIC countries, house 40% of the world’s population. Mexico, Indonesia, Nigeria, and Turkey, a second group of rising economies, known by the acronym MINT, are home to around a further 10%.
These countries have had large populations for decades without attracting much attention from the global pharmaceutical industry. What has changed is the wealth of the countries. In 1990, 1% of the global middle class lived in China and India. By 2015, the countries housed around 25% of the global middle class. The figure is growing, with 88% of the next 1 billion entrants to the middle class set to come from Asia, primarily China and India.
The economic development of these countries is creating a fast-growing population with the financial means to access healthcare. Equally, the ageing of these populations and Westernisation of their diets and lifestyles means many of them need treatments for diabetes, heart disease, and other conditions.
Healthcare budgets are rising as a result of the trends. To take one example, per capita healthcare spending in China is tipped to grow by more than 700% by 2040, ensuring it will be a key market as drugmakers seek to offset the effects of patent expirations and pricing pressures in the West.
Healthcare spending in China is tipped to grow by more than 700% by 2040
These dynamics mean BRIC and MINT countries are critical to the future of the industry. Companies will need to rethink their strategies and overcome numerous obstacles to take the opportunities they present though.
Pharma companies typically put developing markets low down their list of priorities for new launches. Most drugs come to market in the US or EU first, with launches in Australia, Canada, and Switzerland following fairly shortly after. Launches in BRIC and MINT nations come much later, if at all, and often rely on market research done in the West to guide commercialisation plans.
The prioritisation of Western markets was economically rational when healthcare spending in BRIC and MINT countries was low. However, as these markets mature, companies risk missing out if they fail to adapt their strategies to the unique requirements of developing countries.
“We can’t assume that patients and physicians in developing countries will prioritise a particular feature”, Rachel Howard, Director, Global Health, Research Partnership, said: “People have different lifestyles, different working patterns. What fits well into someone’s life in the US or in the EU might not fit into someone’s life where they have a completely different working environment.”
Local market research uncovers cultural differences and leads to more refined regional strategies
Howard cites perceptions of oral and intravenous formulations in Russia as an example of how local knowledge is important. In the West, physicians and patients value the convenience of oral dosages, making them preferable to intravenous products. However, in Russia some people see intravenous products as being more effective than oral dosages. Performing local market research uncovers such cultural differences and thereby leads to more refined regional commercialisation strategies.
The level of preparation advocated by Howard can ensure companies avoid the myriad of pitfalls that await them in developing markets. While these countries are increasingly wealthy, they are yet to eliminate the underdeveloped infrastructure, shortage of expertise, economic crises, and corruption that has historically made them tricky markets in which to operate.
There is no one-size-fits-all approach to the mitigation of the challenges. There is too much variation between – and even within – developing countries for such a blanket tactic to work. That said, a company that takes the time to understand the specifics of a country’s healthcare pathways, cultural norms, supply chains, and other elements relevant to their products will be best placed to prosper.