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10.06.2013

BRIC nations "not delivering high-growth healthcare promise"

Healthcare organisations expanding into emerging markets like Brazil, Russia, India and China (BRIC) are now realising that there are no shortcuts, and they need to be changing the dialogue around these nations, according to a new report.


This realisation is proving particularly challenging considering the current healthcare environment, especially in the US, but the dialogue around BRIC is now more about establishing value, customising to local needs and building regional partnerships to build a sustainable business, says the study, from Frost & Sullivan.

 
"While mature economies across the globe grapple with reducing cost, towering budget deficits and anaemic growth, the BRICs are expanding rapidly and driving the global economy," said Frost & Sullivan partner Reenita Das, speaking at an analyst briefing recently.

"Although emerging markets are often touted as the way forward for healthcare companies, recent protectionism laws and fierce competition from generics may have reduced the appeal of countries such as India and China, leading some to believe they aren't the 'promised land' they once were," she said

There are currently needs overlooked in these areas, or investments that have not been sufficient, said Ms Das. "For example, the level of education and training of physicians in the BRIC countries, particularly away from the Tier 1 cities, is often a lot lower than that of physicians in mature markets. Another weak point is the lack of partnerships with local governments, non-governmental organisations [NGOs) and other trade organisations," she said, and emphasised: "this is really a very critical aspect and shows governments the level of commitment organisations are willing to make.”

Overall, the market is witnessing a slowing of growth, says the report. And, to further debilitate matters, the industry is seeing a changing attitude from regional BRIC governments, which it describes as "even more perplexing."

For example, China plans to introduce a fast-track approval process for new drugs that could exclude firms that have not conducted clinical trials in the country, while in India, price cuts have been introduced to make drugs or devices like stents more accessible to patients. Meanwhile, Russia is proposing to limit the state purchasing of foreign medicines, and Brazil has introduced higher import tariffs to encourage local industry.

These trends impart a mark of further protectionism and control by the state, and more is expected to come, says the report.

"The success in the region will be less about emerging markets being cheap and more about how companies can capture the growth in these markets moving forward," Ms Das forecast. She suggested: "there is a real chance for the industry to innovate in emerging markets by using disruptive technology and establishing a new commercial model that has the potential to become a relevant option for use in the developed world as well."

"It is very clear we need to rethink emerging-market strategies and start changing the dialogue. We must move away from looking at it as a volume business in terms of large numbers of patients and demographics to more about where we can deliver the value to create the access that is required to meet demand," she concluded.


Source:  www.pharmatimes.com

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