Technavio is set to publish a new market research report on the present scenario and future direction for pharmerging markets worldwide.
Pharmerging markets are countries where pharmaceutical use is on the upswing, which presents attractive opportunities for big pharma.
Technavio’s new report breaks down the industry into Tier I, II, and III countries, and explores growth factors as well as emerging therapies attracting big investments in these countries.
Pharmerging markets by geography
A Fortune article published this past August says pharmerging countries are likely to see the fastest growth in total drug spending over the next three years.
Technavio’s report echoes this, and indicates that these emerging markets will be worth $600.7 billion by 2020, posting a CAGR of 13.47% from 2015-2020.
“These sweeping trends have grabbed drugmakers’ attention, and many of them are already cashing in on this growth,” writes Laura Lorenzetti for Fortune. She cites Novartis, Sanofi, and AstraZeneca as three pharma heavy-hitters that are seeking to cash in on growth in emerging economies.
Strategic alliances, mergers, and acquisitions will be key, as big pharma capitalizes on pharmerging market growth through 2020
In order to retain their presence in pharmerging markets, big pharmaceutical companies are increasingly adopting partnership activities with local vendors for the development of new products, especially generic drugs.
In 2010 Pfizer announced its partnership with Laboratório Teuto Brasileiro to develop and commercialize generic medicines in Brazil. In 2011, Eli Lilly expanded its strategic partnership with Chinese manufacturer Novast Laboratories, in order to provide high-quality generic medicines to patients in China. Similarly, Bayer’s acquisition of the OTC brand portfolio of Sagmel in the Commonwealth of Independent States (CIS) helped the company achieve much higher market penetration.
Pharmerging market share by country, 2015
Additionally, the market is seeing a trend towards massive multinationals acquiring smaller, local players to cement their presence in these growing markets.
Mergers and acquisitions help generate higher revenues and develop more advanced drugs, while co-development and commercialization rights for the drugs make sales easier. For instance, Abbott Laboratories acquired Piramal Pharma Solutions for $2.12 billion in 2010, which enabled it to strengthen its position in India. Similarly, Sanofi acquired Shantha Biotechnics in November 2013, thus strengthening its presence in the vaccine business in India. Also, the acquisition of the Oriental Medicine Company in China and Paras in India by Reckitt Benckiser proved to be successful for all companies involved.
These kinds of partnerships are expected to increase during the forecast period, boosting growth in pharmerging markets.
