However, a high percentage (94 percent) of pharmaceuticals and healthcare companies surveyed said they would like to have done something differently in how they planned and executed their emerging markets strategy. Many would like to have made greater efforts to enter earlier, while others would have adapted better to local conditions and prices, or ensured they had better local market intelligence and due diligence.
The survey also showed that availability, accuracy, and completeness of intelligence on emerging markets is an issue for pharmaceuticals and healthcare companies. Nearly eight out of 10 of the 38 companies surveyed said that such information is not readily available in their organizations while nearly 90 percent doubt the accuracy and completeness of the information they obtain.One of the largest challenges to 2017 will be capturing growth in rural areas, which until now have been too fragmented to effectively enter. Global pharmaceutical and healthcare companies will also find themselves coming up against local competitors that may have the upper hand when it comes to leveraging local relationships and established procurement systems to undercut newcomers in pricing.
It could be for such reasons that the pharmaceuticals and healthcare companies in GIA's report say that local distribution and access to customers, pricing, and localized competitive positioning are their top three success factors in emerging markets over the next five years.
It is not difficult to see how this will be played out in reality.
To address similar problems, many other companies work closely with local governments to allow for tiered pricing and other flexible approaches to establishing value by considering local socioeconomics, disease areas, viable margins, and empowering local markets to make their own decisions.
In other emerging markets, government regulations and policy are designed to favor local companies. The Russian Ministry of Industry & Energy is working towards having local players provide 50 percent of the drugs in circulation in the Russian pharmaceuticals market by 2020.
Looking ahead, pharmaceuticals and healthcare companies must be agile enough to secure effective distribution networks, navigate bureaucracies, and price effectively. What is most critical in the short-term is investment in the market research and competitive intelligence required to stay ahead of both local and foreign competitors.
Nicolas Pechet is Senior Vice President Asia Pacific at Global Intelligence Alliance. He can be reached at [email protected]