In order to tap the huge potentials of South Asia and Africa, which are considered as the markets of the future for pharmaceuticals and biotech drugs, Indian pharma companies aided by Government policies, are increasingly focusing on these markets.

While there is a huge demand for generics and branded formulations in these regions, disease burden of communicable, chronic and non communicable diseases propel growth.

In the South Asian market, India is at the forefront of biotech and pharma research, manufacture and marketing. More over leading pharma majors are positive on the new stringent regulations enforced by the USFDA, EMA, ANVISA and TGA.

South Asia is emerging as a powerhouse of contract research and manufacturing services (CRAMS) besides clinical studies. There is infrastructure, skilled manpower as well as access to labour at affordable wages besides a naïve patient pool suffering from life style disorders and infectious diseases. Hence all global pharma majors are eyeing this region.

According to a KPMG-CII report, both South Asia and Africa are at the core of the emerging markets where Russia together with the CIS Nations, Eastern Europe, Brazil and other Latin American countries of Argentina, Mexico and Chile generate a large chunk of sales for Indian pharma. These markets, similar to the Indian market, have branded generics and high entry barriers that lead to less competition and higher profitability.

The future growth opportunity in the emerging markets is likely to be driven by a series of socio-economic factors such as increasing per capita incomes and rising levels of disposable income, growing demand for high-quality healthcare infrastructure and improved healthcare spending. While South Asia region covers India, Afghanistan, Bangladesh, Bhutan, Nepal, Pakistan, Maldives and Sri Lanka having a pharmaceutical manufacturing base, the continent of Africa is quickly keeping pace with the production and sales.

While Indian pharma is looking for expanding marketing opportunities in South Asia, as far as Africa is concerned, Indian companies are looking to invest and grow the business.

There had been couple of acquisitions in the Africa by Indian pharma majors. For instance Zydus Cadila in June 2008 went on to hold a 70 per cent share in Simayla Pharmaceuticals which is a generics player in South Africa.

Presently over 80 per cent of the antiretroviral drugs used globally to combat AIDS (Acquired Immuno Deficiency Syndrome) are supplied by Indian pharmaceutical firms. The UN-backed Medicines Patent Pool has signed six sub-licences with Aurobindo, Cipla, Desano, Emcure, Hetero Labs and Laurus Labs, allowing them to make generic anti-AIDS medicine Tenofovir Alafenamide (TAF) for 112 developing countries.

Indian pharma is working to offer new drugs tailored for the region. For example Biocon facilities in India have successfully completed regulatory audits by some international agencies like US FDA and MCC South Africa. The company has also expanded footprint of its biologics business in emerging markets through licensing arrangements.

Particularly in South Asia, India, Bangladesh and Sri Lanka are showing robust growth. Pharma and biotech majors here are proving their mettle with not just high quality and adherence to Good Manufacturing Practices but also by developing products for oncology and psoriasis. A case in point is Biocon ‘s novel biologic Itolizumab, a 'first in class' anti-CD6 monoclonal antibody, Alzumab(TM) for psoriasis in India and CytoSorb(R), a novel therapy for the management of sepsis besides CANMAb(TM) (150 mg/ 440 mg), a trastuzumab for the treatment of HER2-positive metastatic breast cancer in India and INSUpen EZ, a second-generation insulin-delivery pen device, developed by Germany's Haselmeier. Now these drugs are far more affordable for patients in South Asia and Africa.

According to Kiran Mazumdar-Shaw, chairman and managing director, Biocon, “Expansion of our biologics footprint in emerging markets and licensing agreements could help to boost our revenues. Our ready-to-use Insulin Glargine pen has been well accepted which augurs well for this business. The acceptance of our proposed biosimilar Trastuzumab filing for review by EMA was a critical milestone. The tentative USFDA approval for Rosuvastatin calcium tablets heralds our entry into the US generics market. All these products will find its way to the emerging markets indicating huge demand".

Moreover in the South Asia region, Bangladesh is the market to watch out for. The country has a well established pharma base and the companies are gearing up for global audits, said Anjan K Roy, founder and chairman, RL Fine Chem.

“Africa may be the only pharmaceutical market where genuinely high growth is still achievable.

The country’s pharmaceutical markets are growing in every sector. Between 2013 and 2020, prescription drugs are forecast to grow at a compound annual growth rate of six per cent, generics at nine per cent, over-the-counter medicines at six per cent, and medical devices at 11 per cent, according to the McKinsey report.

According to IBEF report, multinational companies are collaborating with Indian pharma firms to develop new drugs. Cipla formed an exclusive partnership with Serum Institute of India to sell vaccines in South Africa. In fact, Cipla is the sixth largest player in Africa. It is the largest supplier of anti-malarial drugs to the country, set up a US$32 billion plant in Africa for the production of anti-retroviral & anti-malarial drugs.

In order to provide a conducive business environment, the government in Africa has brought in price controls and import restrictions to encourage domestic drug manufacture. There are stringent measures to stall counterfeiting with specific label norms for pharmaceuticals. On the retail front, the consolidation of pharmacy chains are imminent. A slew of collaborations, joint ventures mergers and acquisitions, are providing the much-needed momentum in the region, according to Micro Labs and Zydus among others.

The South Asia and African markets cannot be ignored owing to the promising revenue generation potential they hold , aver pharma companies like Aravind Remedies, Dr. Reddy, Bal Pharma, Elder Pharma, Glenmark, Micro Labs, Biocon Torrent, Cipla, Zydus Cadila, Aurbindo Pharma, and RL Fine Chemicals.

According to these companies, the market outlook of these regions indicate higher consumption of both patented and generics medicines.

By 2016 end, the global pharmaceutical industry is expected to generate an estimated 30 per cent of its total sales in emerging markets. But these expectations will be met only if the industry moves toward more bespoke market strategies, as per PwC by 2016.

The market of Africa are highly populous but have relatively smaller market sizes at the moment but are known for its future potential. Although Africa does not yet play a significant role in pharmaceutical sales, it is South Africa, Egypt, Algeria, and Nigeria which are the only markets in the region where the volume of the pharma market exceeds $ one billion. However, in the coming years, as sub-Saharan Africa develops economically, the long-term potential offered by this vast continent will be huge.

For most pharma industry executives, bolstering top-line growth in emerging markets is the number one priority and best achieved by progressive penetration of their existing markets and channels. Yet, since traditional strategies have often failed to deliver, executives are now turning old thinking on its head. The companies foresee that, in the future, fully fledged models with local operations ranging from manufacturing and R&D to marketing and sales will be implemented for the region, according to PwC.

Therefore the strategic priorities in these two emerging markets should be based on a three-pronged approach. First is the focus on local operations: local research, local development, and local manufacturing. Second is on sales excellence via local sales force. Third is the close collaboration with governments, according to the PwC report.