Public Relations: The Future is East

PR will pave the path to consumer demand in India and China.
Nov 01, 2004

Michael Durand
Pharma marketers and public relations executives are keenly aware that the aging US and Western European population represents a dramatic demographic shift in the next several years. Manufacturers for arthritis, diabetes, and cardiovascular diseases expect their customer base to skyrocket. But there is another long-term shift that is less noticeable, yet could have an equally profound impact: the transformation of former developing nations into economic lions.

Nowhere is this more apparent than in China and India. Although neither country is likely to permit US style direct-to-consumer (DTC) advertising, there will be a huge role for thoughtful PR. This article discusses the emergence of those countries as pharmaceutical markets and highlights PR's role in creating demand for prescription drugs.

Change Drivers China and India are not going to become sophisticated drug markets overnight. The first, but by no means only, roadblock is patent protection, which is in very short supply in both nations. High tariffs, underdeveloped health provider infrastructures, and limited communications with consumers will hobble pharma marketing in the immediate future. Change, however, may arrive sooner than some realize.

PR execs should bone up on best practices for China and India as consumers in those markets have more income to put toward managing their healthcare.
Next year, India will introduce product patent protection, which will help it comply with the World Trade Organization (WTO). WTO membership is also influencing China's willingness to honor pharmaceutical patents. Although India's individual states sponsor health plans, patients cover 80 percent of their own health expenses. Tight government control of healthcare in China is also giving way to a mixed bag of public and private providers and dispensers of medication. For instance, the Chinese government legalized foreign ownership of retail drugstores last year.

The economic shifts in China and India may be more important than regulatory improvements. China's economy is growing at an astounding annual rate of 9 percent (the US economy growth is currently 3 percent). At this rate, China's gross domestic product will be double that of Germany by 2010 and will surpass Japan, now the world's second-largest economy, by 2020. Looking further out, Goldman Sachs predicts that by 2030, China's per capita income will equal Korea's present per capita, and by 2050, it could reach $80,000. What's more, IMS Health finds that China's market for ethical drugs in 2001 totaled $7.3 billion, nearly an 11 percent increase over the previous year.

India is not far behind, with an annual growth of 6 percent. Buried within those statistics is the rise of a true middle class in China and India; consumers with disposable incomes and a thirst for healthcare products from medical procedures to erectile dysfunction drugs. Most adults still live way below Western standards, but there are more than 50 million people in China with annual incomes of more than $20,000—modest by US standards, but mighty in a developing nation. India has 300 million people in its middle class, a group larger than the US population.

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