The medicine retail market in the country may in near future see the ushering in of new business models like money back guarantee schemes or national coverage for a pre-determined price.
In a bid to increase their market share in the emerging markets, which include India and other countries like China, Brazil, Mexico, Korea, the international pharma companies are working both with the governments and other suppliers in the chains (payors) to explore creative financing schemes and develop new payment mechanisms by introducing risk sharing concepts in the market?money back guarantee, national coverage for a pre-determined price, management executives of top global pharma companies affirm in the Ernst and Young(E&Y) report.
Most of the companies are betting heavily on tapping the sections of large underserved and unserved (currently 4 billion patients projected to grow to 6 billion patients) in India and other emerging markets, in the backdrop of developed countries’ pharma markets reaching a saturation point with each person already served and the pipeline of new drugs drying up globally. Most of the large pharma companies have already put in place or are in the process of working out country specific emerging markets strategies based on the country’s customer demographic profile and regulatory environment. Executives of global pharma companies have termed the regulation in India and China as slow and unpredictable.
Global pharmas are making efforts to compete with established generic companies by tailoring product portfolios, pricing, distribution, marketing, sales to unique customer profile of the countries. Other key strategies of global pharma companies directed towards gaining a foothold in markets like India include localising operations. The companies intend to build infrastructures, conduct clinical trials, manufacture, package within the domestic territory rather than exporting readymade products. For the purpose they are lobbying with the respective governments for the approvals.
Apart from collaborating with government, the companies are also building local teams. These companies are on a look out for local resident professionals with deep local expertise and thoroughly understand the dynamics of local market conditions to carry forward their plans. Executives describe the search for people with full immersion.
The most apparent route to capture market here seems to be partnering with global NGOs like WHO and Bill and Melinda Gates Foundation and other patient advocacy groups to distribute medicines cost effectively. Among challenges the companies count low margins, lack of infrastructure and government corruption as the most acute.
Hitesh Sharma, national leader & partner, Healthsciences Practice, E&Y India said, ?Growth in emerging markets like India will play a key role in current times for the pharma industry. Companies need to consider how they increase the speed of change by prioritising, allocating resources effectively and exercising rigor in project management. The finance function and risk and control functions will take a more prominent role.?