Emerging markets – a land of contrasts
| Sep 9, 2011
Over the last five years, the emerging markets have leapt to the front of many pharmaceutical companies’ priorities. But given the amount at stake when getting a drug to market and keeping it there profitably, it still surprises me how many take what is essentially a "one size fits all" approach to their pre and post launch strategies across developing countries. From Algeria to Indonesia to Poland to Venezuela, the market opportunities and the challenges that face a new product vary as much as the countries’ distinct geographies. Understanding these unique characteristics is critical to identifying where to invest and how to bring a brand successfully to market.
Even if we narrow down the emerging markets to the seven forecast to generate the greatest growth - Brazil, Russia, India, China, Korea, Turkey, and Mexico - there are enormous variations in wealth, disease patterns, access to healthcare, regulatory environments and cultural attitudes to health, all of which have a major influence on which indications offer the greatest opportunity and how physicians and patients respond to a new medicine.
Vast differences are found from one emerging market to the next in patient biology and disease incidence and prevalence. Diseases such as liver cancer and head/neck cancer have a relatively high prevalence in Asian populations, for example, and cancer mutations are more frequent than in Caucasians. Some stark differences can also be seen in treatment patterns: gastric cancer is the most common form of cancer in both China and Japan (unlike the West) but in Japan it is often diagnosed quite early in disease progression, thanks to a screening program, and can therefore often be treated surgically. In contrast, in China the disease only tends to be diagnosed at a late stage, by which point surgery has much less to offer and chemotherapy is needed. Although both countries share high disease prevalence, the opportunities for a pharma company are very different. This is not limited to oncology and the pattern between countries is not always not easy to discern – Brazil, China and Egypt all share the unfortunate distinction of experiencing Hepatitis C epidemics (more people are infected in Egypt than in the entire USA.) In contrast, countries such as Mexico, India and Algeria share much lower prevalence rates, closer to that of the developed world.
Demographic trends also vary between developing countries, leading to very different healthcare needs and therefore opportunities for new medicines. China, with its one child policy still in place, has a population that is relatively stable in size, but ageing in profile. Chronic diseases that come with age - cardiovascular, musculoskeletal, respiratory - will continue to grow, presenting a significant medical need, and an opportunity for the pharmaceutical company that can meet it. South Korea, although far more developed than China in terms of healthcare infrastructure, faces a similar demographic challenge thanks to a low birth rate (less than 1.0 in Seoul and Busan, Korea’s two biggest cities) and impressive longevity (the life expectancy of Koreans is the second longest among OECD countries.) Compare this to Brazil and India, where high birth rates and comparatively low life expectancy (14 years lower in India than in the US) are resulting in growing and more youthful populations, presenting very different healthcare needs and potential gaps for new products.
Of even greater significance when developing and successfully implementing strategies across emerging markets are the very different regulatory and funding environments. At one end of the spectrum are highly regulated countries such as South Korea and Taiwan, with well developed government-funded medical reimbursement schemes; at the other are the likes of India, Egypt, Vietnam and Venezuela, with relatively few regulations and where the cost of treatment is largely paid out of pocket by the patient. Understanding the access environment in each country is vital if you are to bring a product successfully to market. The ability to adapt to change is equally important, as companies in South Korea have found very recently when the government unexpectedly announced a 20% reduction in drug reimbursement - the goalposts seldom stay long in the same place in emerging markets.
Finally, there are cultural considerations that can have a major impact on the effectiveness of communications strategies. It is a common misconception that people in developing countries aspire to the values of the developed world and that therefore brand imagery that has worked well in a the US or Europe will be similarly successful in less developed markets. However, there is a strong underlying patriotism in countries such as China and India, and West is not always seen as best. Colors, symbols and imagery that work well in Europe may be completely inappropriate in an emerging market. As a simple example, the color white is often associated with death and mourning in Asian countries, while red symbolizes prosperity and good fortune – an important consideration when picking the color scheme for your new brand campaign!
The emerging markets are lands of immense and fascinating diversity. We’ve been around in these countries for decades and have teams on the ground in many of them who understand the local market and culture and who know what will work and what won’t. If you want to establish how well you understand the challenges and opportunities of emerging markets, why not take our quiz? And please do get in touch
or reach out with a comment here if you feel you could use our help or would like to join our discussion.