As multinational pharmaceutical companies rush to establish themselves in fast-growing emerging markets, they face a dilemma. While companies refine their value proposition for medical professionals and their patients, governments are asking what economic value they will bring to the country overall. As governments in emerging markets have significant influence on market access, one key to market entry will be providing a strategic Corporate Value Proposition (CVP) for each market.

At a time when pharmaceutical companies are rationalizing what used to be considered necessary investments in manufacturing and R&D in developed markets, adding capacity in emerging markets ranks low on most companies' priority lists. Yet, in many of the high-growth emerging markets, if companies want to establish a strong market footprint they must offer the government a robust CVP. The balance is difficult to strike—too little investment in emerging markets could undercut performance in markets that drive growth; too much investment, too soon, and companies will make themselves vulnerable in markets still developing legal and administrative stability. Good practices are becoming apparent, however, and wise companies will take advantage of them.

Why do companies need a CVP?

What would a robust CVP look like?

A CVP should touch on each core attribute of global pharmaceutical companies—research skill, proven ability to convert knowledge into products, broad networks of scientific experts able to prove clinical worth, marketing depth, and the ability to manufacture at maximum efficiency.

The lure of a new plant or an acquisition is strong and easy to present in the media, so the "bricks and mortar" commitment remains most governments' opening position. Fortunately, the more enlightened governments realize that if they are to compete in the global market, acquiring science and technology expertise is important for their citizens. The challenge is to make the economic benefits easily identifiable.

For example, a CVP could have three streams of activity: manufacturing; science; and technology; and partnerships. These activities would progress up a value chain as confidence and expertise increased. For manufacturing, initially this might be just a packaging facility, but over time it could progress to more complex manufacturing tasks. Similarly with science and technology, initially the focus might be on science education and clinical trials, and then progress to more complex R&D projects. Lastly, partnerships with local companies would likely start with marketing but could over time cover manufacturing, science and technology. These activities would develop the work force and a local knowledge base that can help countries develop a competitive edge.

Companies should take care to explain that each of these elements can have a clear benefit for the local economy. Clinical trials help talented local researchers stay in country while working on cutting edge projects; they also, according to one proprietary survey, contribute more than $2 for each $1 in direct spending.

Success in presenting CVPs requires careful attention to the major stakeholders in each market. Political leaders must be involved, so that they see the benefits for constituencies important to them. Senior technical officials in ministries covering health, labor, investment, and industry should also be consulted. Opinion leaders outside government in the private sector, science, and patient groups must be part of the support network for a CVP. A PowerPoint deck left in a government office is not enough. A successful CVP is by definition a campaign with local support.