Understanding emerging markets

Andrew Thompson shares insights on preparing for success in emerging markets.

“Disease profiles in emerging markets are evolving to more closely resemble those of developed countries, shifting from infectious disease control to management of more chronic conditions”
-Andrew Thompson

As economic, demographic and social changes sweep through the developing world, pharmaceutical companies are looking beyond the leading industrial nations (the 'G7') to the growing potential of emerging markets. What is the potential for pharmaceutical products in emerging markets?
Andrew Thompson. PriceWaterhouseCoopers estimates that the GDP of the 'E7' - the seven major emerging countries which include Brazil, China, India, Indonesia, Mexico, Russia and Turkey - will triple over the next decade, and by 2020 could account for close to 14 percent of a projected global pharmaceutical market of $800 billion. Further, disease profiles in emerging markets are evolving to more closely resemble those of developed countries, shifting from infectious disease control to management of more chronic conditions such as cancer, diabetes, and respiratory and cardiovascular disease. According to the World Health Organization, in the US only 12 percent of deaths from cardiovascular disease occur in working-age people, compared with 28 percent in Brazil, 35 percent in India and 41 percent in South Africa. There is a growing market for products that address unmet medical needs in these countries - and those that also enhance therapeutic benefits such as dosing regimens and targeted dosage forms (such as via drug delivery technologies) greatly increase the potential for commercial success.

Pharmaceutical companies seeking to market their products in the first world generally face a stringent approval process. How does the regulatory environment in emerging markets compare, and how can companies prepare?
AT. Generally, regulatory dossiers such as a US Food & Drug Administration (FDA) approval or a EU Certificate of Pharmaceutical Product (CPP) meet the standards of developing countries, nand could over time become the benchmark for regulatory approval in emerging markets. With more than 20 products sold in over 50 emerging countries since 2002, Eurand has demonstrated success and experience in providing technologically advanced products to partners addressing unmet medical needs in these markets. Eurand's successful record with the FDA, including recent approval of several products, has resulted in strong data packages that can help streamline registration timelines for these partners. The launch of a once-daily formulation of the muscle relaxant cyclobenzaprine in Korea in September 2009, for example, came just 17 months after finalizing the licensing deal with a major local pharmaceutical company, Daewoong, in April 2008. 

Approved by the FDA in 2007 and marketed in the US by Cephalon as AMRIX (Cyclobenzaprine Hydrochloride Extended-Release Capsules), the product uses Eurand's Diffucaps technology and reduces the need for patients to take multiple daily doses of cyclobenzaprine while improving the safety profile and tolerability of the drug by reducing the levels of somnolence associated with the standard immediate release (IR) drug formulation. In addition to Korea - a pharmaceutical market that increased 8.5 percent from 2007-2008 - Eurand has also finalized deals with local companies to market cyclobenzaprine ER in Turkey, South Africa and Israel, where growth over the same time period was 12.9, 7.8, and 5.3 percent, respectively.

Despite increasing similarities to the developed world, emerging markets present their own unique challenges.  What other considerations must companies make before planning to enter an emerging market?
AT. Review of emerging markets is a very dynamic process, and perceptions and direction can often change. Companies seeking to succeed in these markets must be armed with substantial information, prepared to create local partnerships for the long term, and willing to be flexible and creative in their planning. Eurand's experience has led to the development of an intensive process for assessing each market, working closely with local partners to leverage their understanding of market dynamics. Key factors in this process include assessment of the region's healthcare system, trading environment and taxation issues; the local competitive landscape, therapeutic class analyses; as well as a review of regulatory, pricing and reimbursement practices. With the right information, the right products and the right partners, companies that make the investment now can successfully tap into the great potential of emerging markets.

Andrew Thompson is Vice President of Commercial Operations at Eurand. He has 25 years experience in international marketing and operations in the pharmaceutical industry, including increasingly senior positions at ICI Pharmaceuticals, Glaxo Wellcome and Spanish pharmaceutical group Almirall. In 2007 he joined Eurand, where he is responsible for the company's pharmaceutical technology business outside the US.