emerging markets: healthcare need & commercial opportunity
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Healthcare Need & Commercial Opportunity
Emerging Markets
MeTA
Need
State of the art care for the few?
Basic care for everyone?
Quality essential care for everyone?
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Needs
BRICs– Diabetes, cardiovascualar, anti infectives, vaccines
Developing World– Vitamin A, parasite control, malaria, insecticides,
reproductive health
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The Objective
Equitable access– Social cohesion
Affordable care– Appropriate price and cost
Sustainability– Balance between best care for all and efficient optimisation
of care
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Healthcare System Design
Complex systems in government hands– Efficient?– Cost effective?
Role of the Private Sector– Cost efficiency– Allocation of resources– Insurance model
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Commercial Opportunity
IMS Health Emerging Markets Forecast– 12% growth– By 2020 30% of Global Pharma Sales– 50% of Global Pharma Sales Growth– China drug spend $15 per person per year, US $950
Global Pharma Sales Growth Forecasts
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Recent Developments
Big Pharma looking for growth– GSK new senior Executive– Pfizer major part of new strategy– Sanofi new markets for ex branded drugs
J&J referenced need for– Emerging markets appropriate products
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Issues
Access
Reimbursement
IP respect
Corruption
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Access
Marginal price should equal Margin willingness to pay, but– In different countries willingness to pay is dramatically
different– Universal Global Pricing denies access to enormous
numbers of patients Should there be Tiered Pricing?
ProducerRevenue
Price
Quantity
Demand Curve
Efficiency Loss
Price
Quantity
Demand Curve
Efficiency Loss
ProducerRevenue
Current drug access
No/limited access
People
Price
Access?
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Reimbursement
Reimbursement system will determine access and cost parameters
Fundamental problem with buyer knowledge in healthcare markets
Managed Care as the informed pricing agent Government buyers e.g. UK’s not so nice NICE
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IP
Lack of IP enforcement– IP underpins the innovation model– Investment is unattractive– Multinationals may not participate– R&D cross fertilisation is inhibited
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Corruption
Negative relationship between economic development and corruption
Positive relationship between multinational penetration and lower corruption
High human cost of fake drugs– 30% of drugs in government hospitals in India are
counterfeit, 60% of which have no active ingredient
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Other Opportunties
Outsourcing R&D and Manufacturing– well underway
Services Offshoring R&D internalisation
– The long game Medical Tourism
– $160bn market by 2012 per The Economist