Today, the global pharmaceutical markets are witnessing an unprecedented shift from the highly developed western world towards the eastern and other developing parts of the world. Though it looks to be a great sign for the developing world, the challenges remain many to maintain a sustainable growth, opine industry experts.
While the growth is dwindling on the west, in contrast the pharma sector is witnessing an upward trend in many growing economies especially in the developing regions of Asia, Latin America and Africa. These nations are witnessing a continuous high growth rate in the pharmaceutical sector. In the coming years, these markets are expected to continue their robust growth owing to various factors such as increasing prevalence of lifestyle diseases, rise in spending on healthcare and increased access and affordability to healthcare services.
The trend of drastic shift in the global pharmaceutical markets, away from the major developed powers of the U.S., Japan, France, Germany, Italy, United Kingdom, Spain and Canada to a set of new, dynamic, fast-growing emerging economies of China, Brazil, Russia, India, Mexico, Turkey, and South Korea has created new dynamics. These seven emerging markets of the pharmaceutical sector have been termed as ‘pharmerging markets’.
“As the pharma markets are shifting from west to east, it’s high time that the emerging markets like India, China and other nations in Latin America adopt advanced technology and proven technical processes to avoid repeating of mistakes done by the traditional players. Apart from adopting advanced and proven technologies the Industry in the emerging countries should also learn from the experience of western pharma. The governments and the regulatory authorities too have a responsibility to streamline the regulations and IPR laws to make them compatible with the global trends as this will ensure more investments and enable better funding for R & D and innovator drug development activities,” said Adrian
McKemey, Practice Leader, Product Development & Commercialization from Quintiles.
Apart from these E7 economies, many other emerging markets have been recognized as interesting destinations for the major global pharmaceutical players. Unlike the developed world, where health systems provide a more uniform coverage level, the emerging pharmaceutical markets have wide regional health expenditure differences within them. Moreover, recent major developments and global recession have driven disparate rates of evolution in each of these countries. Unlike the pharmaceutical market of United States and Western Europe, the emerging markets are characterized by diverse therapeutic segments, different and complex regulatory law and a fragmented market. The worldwide economic crisis has also added a new layer of complexity to the already challenging environment.
Thus, the need for action and informed direction has never been greater. Apart from the BRIC nations (Brazil, Russia, India and China), positive developments in other parts of the world are also reshaping the pharmaceutical sector. In regions such as Latin America and Asia, Eastern Europe and North Africa, a new set of emerging economies are now rapidly rising. A further 13 nations in these regions have now reached a threshold of economic development and volume of future growth that warrant close and immediate scrutiny. Collectively, the emerging markets undoubtedly offer high potential, with rising GDPs, expanding access to healthcare and an improving IP and regulatory environment in many cases.
Afro-Asian Growth
Having broken the shackles of centuries of colonial rule and with flourishing democracies, emerging nations in Asia, Latin America and Africa nations have been treading a remarkable growth path. In fact the beginning of the 21st century has witnessed a paradigm shift in the growth of pharmaceutical and biotechnology sectors.
From being totally dependant a decade ago, countries like India, Bangladesh, Sri Lanka, Pakistan, Nepal, Bhutan and Afghanistan from South Asia and African nations like South Africa, Nigeria, Egypt, Tobago etc have remarkably developed their pharmaceutical and biotechnology capabilities.
Today both Asia and Africa, the two biggest continents of the world comprise almost more than 75 per cent of global population. Of this, India and China, two of the world’s densely populated countries itself account to more than 60 per cent of the seven billion people. It is imperative for the governments of Asian and African countries to push forward pharmaceutical and biotechnology sectors to meet the growing healthcare demands of the people.
The South Asian and African countries have suffered an avalanche of diseases in the past few decades. To combat the prevailing mass of diseases and develop innovative methods to prevent deadly diseases, these nations are building deep foundations of their pharma and biotechnology segments.
Taking cognizance of this, many countries in Asia have already established most advanced infrastructure to manufacture low cost pharmaceuticals especially APIs and generics. Among them India, China, Japan, Malaysia, Indonesia, Singapore and South Korea are leading. In south Asia, apart from India, Bangladesh, Pakistan and Sri Lanka are also moving forward to become the pharma hubs.
The countries in Africa are still lagging behind due to uncertain political scenarios and drastic economic downfalls in many countries. But in spite of all these problems, the African manufactures are strengthening their pharma base with the help of Asian pharma industry especially India and China.
Majority of African nations depend on imports for the pharma and healthcare needs. The continent of Africa has 54 different African countries including the 47 nations of the mainland and the six surrounding island nations. The West African region consists of 250 million people, comprise countries of Nigeria, Ghana, Cote D Voire, Togo, Niger among others. The sub-region is almost a third of the whole of Africa.
Giving statistical insights in to the African Pharma markets Prof O R S Rao, Vice Chancellor, the ICFAI University, Jharkhand and Director, Cygnus Research, said, “Pharma industry in the African region (consisting of 24 countries) in 2011 was about US$40 billion, constituting about four per cent of global industry. But it is expected to grow at a CAGR of over 15 per cent in the next five years. The South African pharmaceutical market, the largest among then, is expected to grow from a value of US$3.8 billion in 2011 to $7 billion in 2018, climbing at a Compound Annual Growth Rate (CAGR) of 9.2 per cent.”
Infectious diseases like tuberculosis and HIV are rampant in sub-Saharan Africa. Urbanisation and Westernised lifestyles have further increased the prevalence of non-communicable diseases such as diabetes and cancer. The strong correlation between infectious diseases and cancer has additionally fuelled the incidence rates of various cancers, driving the pharmaceutical industry in key east African countries. Compounded by the spread of human immunodeficiency virus (HIV), cancer rates have risen to more than 20,000 fold in many African regions.
The South African pharmaceutical market , which is expected to almost double in the next six years due to profitable government contracts for HIV/AIDS and tuberculosis medications. Several factors such as growing healthcare spending and burden of diseases (HIV/AIDS, TB, Diabetes, etc.) have boosted the usage of high-priced drugs in the country. Moreover, there will be high demand for primary health care level drugs such as generics, antibiotics and OTC drugs in coming years owing to the fact that a number of drugs will lose their patents.
Though it was once dismissed as low-profit, the country’s pharmaceutical industry is now regarded as having great potential and is attracting the attention of some of the sector’s big players.
To aid the fight against the epidemic, the government receives international support from organisations such as the UNICEF, Global Fund, the President's Emergency Plan for AIDS Relief (PEPFAR) and the EU.
Today, African region is the second largest destination for Indian pharma exports, next only to the North America. During 2011-12, exports to African countries amount to about US1.6 billion, constituting about 16 per cent of Indian exports, major destinations being South Africa, Nigeria and Kenya.
“Of late the African governments are in the process of introducing new regulations, with the goal of speeding up the drug registration process. The South African Health Products Regulatory Authority (SAHPRA) will replace the current healthcare body, the Medicines Control Council (MCC), in a transition that is hoped to be complete shortly. The new organisation will have a greater range of responsibilities, including the approval and licensing of pharmaceuticals and medical devices, as well as carrying out evaluations for safety and efficacy,” said ORS Rao.
Though of late some countries like Nigeria and South Africa are slowly building their manufacturing hubs, it may take some more time for these countries to look towards global exports. At present they are keener on meeting their domestic needs. Local production mainly focuses on generics. Also, most of the African nations are identified as under-developed. Hence, a quantum of health care funding is being channelled through organisations such as UNO, WHO and the World Bank. Apart from this, HIV has been identified as a major threat to the continent and some of the leading Indian manufacturers are supplying Anti-Retroviral (ARV) formulations at lowest possible price as a part of humanitarian service.