The shape of the global market for pharmaceuticals is undergoing a rapid change. As recently as 2006, more than half of the market growth was in the US, according to IMS Health. But this year, they are predicting that the US market will decline by up to 2 percent, and 52 percent of growth will come in the seven so-called Pharmerging markets-Brazil, Russia, India, China, Mexico, Turkey and South Korea -where growth in 2006 was just 16 percent. At today’s prices, these countries still only account for 12 percent of the global dollar value of the pharma industry (about $80 billion), but that still represents a significant shift in market dynamics.

Despite the current economic crisis, most of these seven markets are expected to continue growing, and David Campbell, senior principal, emerging markets platform at IMS Health, believes that at least four of them will experience double-digit growth. “The Chinese and South Korean markets are now expected to surpass the predictions we made in September 2008,” he says. 

The main factor driving this growth is government policy-notably the recent Chinese commitment to invest $123 billion in reforms that will improve healthcare provision for its 1.3 billion citizens. IMS predicts that by 2013, China will be the third largest pharmaceutical market worldwide in value terms-up from ninth in 2003. 

Many pharma companies are now realizing that a lot of future growth is likely to occur outside their core markets, and are placing focus on these rapidly growing areas. However, Campbell says, the industry has never been good at maximizing its opportunities in these markets, and only fairly recently-since about the mid-1990s- has there been talk of emerging markets’ potential to drive future sales. 

The potential for increasing revenue is enormous, as these pharmerging markets represent about 45 percent of the world’s population, and half a billion of the people living there can afford Western medicine. That’s more than the population of the European Union. “[These countries] will be very important in driving growth,” says Campbell. “We are seeing an urgency among our clients to increase the profile of emerging markets in their commercial organisations.”

Part of the problem facing companies is that they have traditionally considered the global pharma market as a two-tier model; they only think of launching a drug in emerging markets once it’s on sale in developed ones. Indeed, according to IMS data, only two-thirds of the 420 NCEs introduced between 1997 and 2008 have yet reached emerging markets. 

An additional problem is that emerging markets are complex and different, both from the established markets and each from the other. In China, for example, traditional medicine is still very important, and the widespread population provides an extra layer of difficulty. While healthcare is readily available in \big cities, it is in remote, rural areas. Turkey, meanwhile, is investing heavily in its healthcare system as it tries to join the European Union, and that country’s new model is much more stable and transparent. Brazil’s market is highly genericized, with many local players targeting low-income consumers. 

“[Pharma companies] are still wrestling with how to understand the markets,” Campbell says. “They have tried to duplicate their existing development strategies, but we have already seen that does not work.”

Europe-based companies have a head start over their US rivals. Bayer, for example, has been operating in the Chinese market since the late 19th century, thanks to its chemicals business; this has led to a strong pharma presence. “US companies have historically done well in US markets, and European ones less well,” claims Murray Aitken, senior vice president, healthcare insight, at IMS. This meant that in the past European companies were more inclined than their US counterparts to look elsewhere for additional sales. “While there was robust growth in the US, why should [US companies] bother with emerging markets? The urgency has not been there. That will change. Some of the companies most dependent on the US market are now in trouble.”

Emerging markets provide new challenges for pharma companies, but the rewards are there if they pick the right products and look to meet unmet medical needs. This doesn’t have to mean cheap generics-Campbell cites an example of a client who is launching a major innovative biologic in African countries such as Senegal and Côte d’Ivoire-but it does mean picking the right strategy for the right market. 

“We believe we are facing a new world order in emerging markets coming up the global rankings,” he says. “This is an indication that we are going to have to shift expectations from making money in established markets. The industry is going to have to adapt.” 

Articles

News Analysis

Pharma is wrestling to understand the emerging markets will be the engine of growth for future sales.

Understanding the New World Order of Emerging Markets

Oscient Pharmaceuticals, last week, announced that it will be ending all promotion activity for two of its treatments, and decreasing its sales force and marketing team by 180 bodies to compensate. 

All marketing activities for the antibiotic Factive and the cholesterol treatment Antara will cease, but the company insists that it would still support and sell the drugs, and that doctors should not switch patients to different treatments. 

Antara and Factive are the only two treatments Oscient is currently marketing. Additionally, it has an intravenous version of Factive for bacterial infections in preclinical trials and an antibiotic-associated diarrhea treatment in Phase II.

The company has been battling at least two other companies that are looking to release generic versions of Antara. Last month, Oscient found out that it will be facing generic competition for its Antara from Paddock Labs. Antara accounted for $70 million, or about 80 percent of the company’s total revenues.

The latest layoffs come in the wake of a restructuring plan, announced in February, that saw the Oscient aggressively trim 30 percent of its workforce of 305 people. 

"Given current capital market constraints and our limited cash resources, we determined that the best way to position our organization for a potential partnership or acquisition was to take the difficult steps to realign our commercial organization and reduce cash required for operations," stated Steven M. Rauscher, president and CEO of Oscient, in a release. "We appreciate the many contributions of those employees impacted, and will work to ease their transition.”

Oscient trims 180 sales, marketing, and corporate jobs in the wake of patent expirations, generic competition.

Oscient Pharmaceuticals Lays Off 180 Reps

Biopharmaceutical company UCB is out to prove that social media shouldn’t be a dirty word in pharma. The drug firm is joining forces with social network architect PatientsLikeMe to reach out to epilepsy patients.

PatientsLikeMe builds free online communities around specific disease states that allow patients to share structured health information, including their own outcomes, treatments, and symptoms. Rather than creating a marketing tool that drives consumers to a drug through health information or branded marketing, UCB is going to use this Web 2.0 tool to gather data about epileptics, including whether or not they are currently on a UCB treatment. 

"Drug companies get longitudinal outcomes data as well as achievements and intervention," said Benjamin Heywood, co-founder and CEO of PatientsLikeMe. "UCB wants to explore the comparative effectiveness of all the different therapeutics and interventions on the quality of life of epilepsy patients."

Think of it as a large-scale clinical study with thousands and thousands of patients. 

Similar to Facebook, patients in this online community will have health-centered profiles; users will answer a series of questions to measure where they are at in their illness. "In the case of epilepsy, the program will help patients understand their experiences with seizures as well as the different interventions they are trying," Heywood said.

Digging That Data
 Additionally, PatientsLikeMe will be studying drug safety, data mining and pharmacovigilance on UCB’s products and service within the community. 

“This might be a first-of-its-kind partnership, where industry works with patients through social media to really understand drug safety and side effects in a way that they haven’t been able to before,” Heywood said.

At a time when pharma seems scared to death to have patients post adverse events on a public forum, this begs the question: How can USB get around the regulatory restraints and respond to patients through social media?

“We’re taking it head-on, and having a pharmacovigilance person in the community,” Heywood said. What’s makes this situation unique is that the company can garner much more data on adverse events and different dosages. 

Heywood makes it clear that this is not a UCB community. This is a community that anyone can enter and share information about any treatment options or services-not just those provided by UCB.

The day-to-day control will be monitored and handled entirely by PatientsLikeMe, and that company promises a lightweight moderation model to encourage the community to comment freely. Transparency will play a big part on the site. PatientsLikeMe fully discloses exactly what it does with its data, who its sponsors are, and how it turns a profit. 

“Our patients are excited that industry is partnering with us,” Heywood said. “Ultimately, for them, anyone willing to listen and engage with their disease is positive-particularly with the life-changing illnesses that we are working with.”

In an effort to learn as more about epilepsy sufferers, UCB will implement a social network that allows patients to communicate about their disease state and treatments. Think of it as one giant, online clinical trial.

UCB Teams with PatientsLikeMe to Learn What Patients Want

FDA, on Monday, was quick to explain the results of a study that found a minute correlation between the sudden death of children and the death of children in car accidents, and the use medication for the treatment of attention-deficit hyperactivity disorder.

The agency co-funded a study that looked at the use of stimulant medication in children that died of sudden cardiac deaths. Conducted by Columbia University, the study used a case-control method that studied medication usage patterns in people who have the outcome of interest-sudden unexplained death-and people who don’t.

They assessed usage of stimulant medication in 564 children who died of SUD, and compared it with patterns of stimulant medication usage in 564 children that died in car accidents. Of the children that died of SUD, 10 had used stimulant medication, compared to only two in the control group. 

While FDA doesn’t find the results of the study reassuring, neither does the agency think they are threatening. Rather, FDA advises that doctors continue to distribute stimulant medication for ADHD according to the current labeling. 

“This has been an area of interest for us for a considerable period of time,” said Robert Temple, FDA's director of medical policy. “The drugs that we are talking about are relatives of amphetamines, which are relatives of drugs that are known to stimulate the heart.”

FDA had already concluded that these drugs pose to risk to children with underlying heart disease, which led to new labeling on ADHD drugs. The question has been whether or not there is a risk for people that don’t have an underlying heart disease. 

“Everything depends on whether the people who died were or were not taking an amphetamine, and since the deaths took place a long time ago-and in most cases blood levels weren’t relevant-all this depended on the memory of people involved with the victim,” Temple said in a conference call.

The study’s limitations include:
  •The difference in circumstance of death may have accounted for a difference in family or caregiver recall of information relating to medication use at the time of death
  •Sudden unexplained death in a child would be more likely to trigger a post-mortem inquiry into the cause of death than death due to blunt force trauma as a result of a motor vehicle collision
  •There was a low frequency of stimulant use reported in both the study group and the control group.

Two additional studies are underway to further delve into the possibility that amphetamine use could raise the risk of SUD.

Feds claim results of study comparing car crash deaths and children on ADHD drugs were not paramount to pulling kids off of ADHD treatments.

Pharmaceutical Executive-06-18-2009

Understanding the New World Order of Emerging Markets

Oscient Pharmaceuticals Lays Off 180 Reps

UCB Teams with PatientsLikeMe to Learn What Patients Want

Sudden Deaths and ADHD Meds Not Necessarily Related