Expanding Horizons: Big Pharma’s Strategic Shift to Emerging Markets
Introduction
As the pharmaceutical landscape faces slowing growth in traditional strongholds, major pharmaceutical companies are turning their focus towards emerging markets. Countries like India, China, and Brazil are witnessing significant investments from Big Pharma, driven by the need to tap into these rapidly growing economies. According to IQVIA data, between 2016 and 2021, the pharmaceutical markets in Brazil, China, and India grew by 11.7%, 6.7%, and 11.8%, respectively, compared to an average growth of 5.8% in the top five EU markets and 5.6% in the U.S. market.
Strategic Shifts in Emerging Markets
The shift towards emerging markets is not just about capitalizing on growth but also about fostering innovation and improving accessibility to critical medications. Vasant Narasimhan, CEO of Novartis, recently announced that the company aims to make India a hub for innovation, focusing on artificial intelligence, data science, and basic science research. India, which already houses 8,300 Novartis associates, is poised to play a pivotal role in the company’s global strategy.
Similarly, companies like Merck KGaA and Bristol Myers Squibb (BMS) have tailored their strategies to meet the unique needs of emerging markets. Merck KGaA’s “Triple A” framework focuses on availability, accessibility, and affordability of its healthcare portfolio in low and middle-income countries (LMICs). The company aims to treat over 80 million patients per year in LMICs by 2030, up from 55 million in 2022.
BMS has introduced the ASPIRE strategy, which stands for Accessibility, Sustainability, Patient-centric, Impact, Responsibility, and Equity. This strategy includes creating new access pathways for BMS medicines by launching Emerging Market Brands (EMBs), which use tiered pricing to reflect each country’s ability to pay. BMS aims to reach more than 200,000 patients in LMICs by 2033.
Challenges and Opportunities
Despite the immense opportunities, pharmaceutical companies face several challenges in emerging markets. These include regulatory complexities, intellectual property (IP) issues, political instability, and the need for equitable access to therapies across diverse socioeconomic segments. Companies must navigate these hurdles while ensuring that their investments lead to meaningful health outcomes.
Collaboration with local stakeholders is crucial for overcoming these challenges. For example, Merck & Co. entered a licensing agreement with Indonesia’s Biofarma to produce its HPV vaccine locally, supporting the country’s national immunization program. Such partnerships enable companies to better understand local market dynamics and establish strong distribution channels.
The Role of Euro-American Worldwide Logistics
As pharmaceutical companies expand into emerging markets, the logistics of materials management become increasingly complex. This is where Euro-American Worldwide Logistics can make a significant impact. With our expertise in global logistics, we can help pharmaceutical companies navigate the unique challenges of emerging markets by providing tailored solutions that ensure the efficient and reliable distribution of products. From managing supply chains to ensuring timely deliveries, Euro-American Worldwide Logistics is committed to supporting the pharmaceutical industry’s expansion into these critical markets.
Conclusion
The strategic shift of Big Pharma towards emerging markets represents a significant opportunity for growth and innovation. However, to capitalize on this potential, companies must navigate a complex landscape of challenges. By leveraging local partnerships, adopting tailored strategies, and utilizing the logistics expertise of companies like Euro-American Worldwide Logistics, pharmaceutical firms can ensure that their products reach the patients who need them most.
Reference: Article by Soman Harachand, Contributing Writer, Contract Pharma 07.22.24
