Emerging markets are becoming more and more important for pharma players. Healthcare is becoming the priority for governments. Governments are investing in infrastructure, funding services, encouraging the development of respective domestic industries and expanding health insurance to a broader population. Thus, emerging markets will be an important contributor to sales growth in pharma over the next few years. Most of the growth is expected to happen in Brazil, Russia, India, China, Mexico, and Turkey (the BRIC-MT countries).
The nature of the pharma industry is also changing. More people can access healthcare; more population will shift to urban areas, resulting in non-communicable diseases becoming more prevalent. The number of cancer, diabetes and cardiovascular patients are also increasing.
Governments are reforming healthcare policies in various countries. For example:
1. The two child policy is official in China now: The government in China has made its two child policy official from January 2016. It will allow married couple to have a second child. However, this policy will only help married women, and not those who are single or unmarried. Under current laws, it is illegal for single women to access reproductive technology (although men can be sperm donors) in China. The permission to have a child firstly comes from the state. As part of the nation’s population control program, every expectant mother needs a ‘birth permit’. This permit gives prenatal medical care and allows the legal registration of the child. To obtain a birth permit, the IDs of both the parents are required, including the husband and wife’s household registration documents.
2. DLO Program in Russia: This was launched for disabled persons, pensioners and patients in need of specialized medicines. The aim was to cover almost 15 million people. There was an option for money and many people chose it while others opted for medicines and were treated by some of the best medicines available for their respective therapy areas.
3. Creation of an economic evaluation agency (CITEC) in Brazil: CITEC (the Commission for Incorporation of Technologies) was established for more methodical and formal processes to review the cost-effectiveness of drugs. CONITEC (National Commission for Incorporation of Technologies in the Unified Healthcare System) has replaced CITEC. The CONITEC review has a critical role in approving medicines for public funding; Pharmaceutical manufacturers have to get acquainted with CONITEC to obtain public reimbursement for a new drug.
4. Introduction of National Healthcare Insurance system in South Africa: The NHI proposals will be compulsory and it will cover all citizens and permanent residents. It will be introduced in three phases over 14 years. The first five years will focus on strengthening the service delivery platform and the overall improvement of quality in the public health sector. A second five-year phase will feature the roll out of a NHI card to all South Africans and permanent residents. The third and final phase of implementation will take place over the last four years and will ensure that the NHI Fund is fully functional.
5. Vietnam is implementing a centralized annual tendering program: The objective is to make drugs more affordable to patients by introducing a price cap. Out-of-pocket payments account for approximately 60% of the market’s healthcare spending. Consequently, the cost of some pharmaceutical drugs is expected to fall.
6. Nigeria sought to achieve universal healthcare coverage by 2015: The NHIS (National Health Insurance system) covers about five million members, or three percent of the population. Nigeria is expanding its health insurance over the past five years to cover more population.
Governments in emerging markets are expanding their healthcare provisions and are also looking to contain costs. They are also using price control as a measure to manage healthcare spending, encouraging the development of the domestic industry. Similar to China, other governments have introduced different tendering measures to narrow the price gap between local generics and off-patent international brands. In Russia, the government grants substantial access and price advantages to locally manufactured products. In Brazil also, the government gives preference to locally manufactured products. Cost containment is one parameter where global pharma companies are challenged in securing market access in the emerging markets. Other parameters include interpretations of intellectual property protection that favor generics and biosimilars, other policies which support local manufactures and the frequent changes in such policies. All these government initiatives for patients in the emerging markets offer various opportunities to pharma companies. The top players in the pharma arena are making the emerging markets a priority. However, to capture the revenue growth from these markets, pharma companies need to shift their focus from traditional marketing and sales approaches to access-driven commercial models and patient-focused models.