The U.S. is the largest market for pharmaceuticals, accounting for 30 to 40 percent of the worldwide market. However, newer smaller markets are on the rise for new drug products.
Challenges exist to hamper the introduction of drug products to physicians and end users, such as the lack of a salesforce team, poor access to treatment, and lack of disease diagnosis. Based on our client work, we see the following factors as critical for pharmaceutical company consideration when introducing a drug in a market:
- Epidemiology of the disease
- Healthcare System
- Commercial Strategy: Mergers and Acquisitions
Epidemiology of the disease
A pharmaceutical company needs to analyze the epidemiology of the disease in the market in which they wish to launch their product. By analyzing the epidemiology, a pharmaceutical company will understand the underlying disease landscape:
- Disease population
- Proportion of the population that is being diagnosed and treated for the disease
- Growth of the disease population in the next 10-20 years
By understanding epidemiology, a pharmaceutical company will learn if a disease is restricted to certain populations (children versus adults, males versus females, Caucasians versus Asians) or regions (rural versus city, north versus south). After identifying the disease population, a pharmaceutical company must analyze the proportion of that population that is being diagnosed with and treated for the disease, which can differ drastically across markets. For example, Africa can have an overall large population of those living with HIV, but the actual number of diagnosed and treated cases can be very small. Depending on the disease, incidence (or new cases of the disease) and prevalence (or new and old cases combined) can vary, which can affect the growth of the disease population in the next 10-20 years. This in turn can have impact on sales and revenue for the drug product.
The healthcare system is another important factor to evaluate when launching in a new market. It is important to identify if the market offers universal or public and private health insurance. A pharmaceutical company needs to understand how the type of healthcare system in a developed versus emerging market will influence access to treatment and impact their drug in terms of rebates, discounts, cost, and myriad of other ways.
Physicians usually prefer treatments that have better efficacy and compliance rates, improvement in disease outcome, and affordable cost. However, depending on the market, physicians will also consider social factors, such as religion, lifestyle, environment, and wealth when prescribing medications to patients. In a market such as Syria, physicians may prescribe a less frequent oral medication so that patients do not risk their lives when traveling to clinics for treatments, even if the drug is less efficacious.
For example, BioCryst is currently developing an oral medication for the treatment of hereditary angioedema (HAE). The company conducted interviews with physicians and patients that showed preference for an oral medication over intravenous (IV) and subcutaneous (SC) for HAE treatment, as illustrated below:
Therefore, it is important for a pharmaceutical company to interview physicians and gain their perspective on treatments before introducing a drug in a market.
Commercial Strategy: Mergers and Acquisitions
Another key aspect when introducing a drug into a market is analyzing the commercial structure of a company to determine if resources need to be obtained through mergers and acquisitions. When a pharmaceutical company is lacking resources, such as marketing, and brand planning items, it may choose to merge with or acquire a company that already has these resources in place. This can add greater value to the combined companies, thereby providing greater recognition and more growth opportunities in the space.
No two market analyses will be the same because no two markets are the same. The healthcare system of a market provides insight into the commercial side of healthcare and how that impacts access to care. However, in some developing countries the system of healthcare is complex and may be a combination of major health systems. It is also recommended that pharmaceutical companies identify social factors that may influence a physician’s treatment method. Lastly, mergers and acquisitions are an option for entering a market but the benefits and drawbacks must be considered carefully.
If a pharmaceutical company does not have the capabilities to thoroughly analyze a market internally before introducing their product, then consultancies that specialize in developing markets can provide insight on appropriate strategies. As technology advances and more people see healthcare as a right, initially ignored markets will become opportunities for pharmaceutical companies, as larger markets become more crowded.