Is the BRIC dream going to vanish for Western pharmaceutical market?

Posted by Leonard Fuld on Jul 26, 2013 10:00:00 AM

Many Western industries have based much of their future strategies on succeeding in Brazil, Russia, India and China (BRIC). All the pieces seem to make sense: large population, rising middle class, and either a consumer hunger for better products or a government that supports improving the lives and the welfare of those living there.

Unfortunately for some industries at least, the BRIC windfall may be delayed or severely reduced by unexpected events.

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For well over a decade, large pharmaceutical firms have placed big bets on BRIC countries. Recently, this BRIC dream has come under assault. Bayer Healthcare continued its worldwide rollout of a premium-priced cancer-fighting drug, Nexavar, but the company was blindsided when the Indian courts. Just this month it was reported that the newly elected Chinese Communist Party leadership is threatening to force Western infant formula and pharmaceutical companies, including Nestlé and GlaxoSmithKline, to further lower prices. These pressures are likely to be exacerbated by recent accusations of bribery/corruption by senior GSK personnel (who are Chinese nationals) in the country.

What concerns me are the results of a recent global survey of life sciences executives (Boiling the Frog™). A majority of respondents stated that although they knew a major disruption was likely – such as the above cases from India and China – they failed to adequately prepare for these anticipated disruptions.

No one can absolutely predict if the BRIC markets will continue to disrupt strategy but one thing is for sure, life science company management must ask itself the following questions going forward: 

  • How closely have you been tracking government legislation, on the ground, day to day?

  • Have you developed various future stories or worlds in which your company could be living? If so, how resilient does your strategy appear in each of these futures?

  • Are you aware of the existance of non-traditional competitors – in new geographies with disruptive technologies, and aided by non-traditional partners?

  • Do you have thresholds, trigger points after which you need to reassess your strategy in one or another of these countries?

  • What is the ability of manufacturers in China, India and Korea to effectively develop and commercialize both biosimilars and "biobetters"?

  • Have you determined the impact of global initiatives to lower the cost of medicine - compulsory licensing, local origination requirements, government-supported generic/biosimilar efforts and "hidden" price controls?

  • Are you monitoring your competitor's or channel partner behaviors in each of these markets? Do they appear to move faster or more definitely than you? Can you detect shifts in their strategies worth noting - particularly with respect to either further investments or reduction in the investment in one market or another?

Topics: Pharma, Scenario Analysis, Life Cycle Management, Life Sciences

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