South East Asia’s Pharmerging Landscape presentation given at the SEA Pharmaceutical Forum Sep 2012


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IMS Consulting Group's presentation on the South East Asia’s Pharmerging Landscape for the IBC Asia South East Asia Pharmaceutical Forum Sep 2012.

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South East Asia’s Pharmerging Landscape presentation given at the SEA Pharmaceutical Forum Sep 2012

  1. 1. South East Asia’s Pharmerging Landscape IBC Asia South East Asia Pharmaceutical Forum Sep 2012 Singapore
  2. 2. Over the next 30 minutes we will touch briefly upon… • The “Asian” Pharmerging Markets and growth opportunities therein • Dynamics & trends that make South East Asia a unique and challenging environment • Key success factors in South East Asia 2 • Q&A
  3. 3. Pharmerging Markets will drive c.65% of global pharma growth over the coming 5 year horizon. The “Asian” Pharmerging Markets Global pharmaceutical market by region in USD Billions, 2011-2016 United States Size: US$322Bn CAGR 2011-16: 2.4 % Japan Size: US$115Bn CAGR 2011-16: 2.6% Top-5 Europe Size: US$154Bn CAGR 2011-16: 0.6% Rest of World Mature markets expected to see minimal growth Aging population and price reforms benefitting patent brands to drive growth 3 Note: *China, Brazil, Russia, India, Venezuela, P oland, Argentina, Turkey, Mexico, Ukraine, Vietnam, S.Africa, Thailand, Indonesia, Romania, Egypt, Pakistan Source: IMS Health Market Prognosis, May 2012; IMSCG analysis “Pharmerging” Markets* Size: US$186Bn CAGR 2011-16: 14.3% Rest of World Size: US$165Bn CAGR 2011-16: 3.5% “Pharmerging” markets redefined in 2010 from 7 to 17 countries*Positive growth expected, as economies recover from the Global Economic Crisis Global Market 2011 Size: US$942Bn 2016 Size: c.US$1211Bn CAGR 2011-16: c.5.2% ● Pharmerging Markets , US and RoW Emerging Markets are expected to drive growth ● Historical growth (2006-2011) was c.6% but distributed across all regions
  4. 4. c.55% of this Pharmerging Market growth will be driven by Asia Growth prospects in Tier 2 markets, while dwarfed by China, are not insignificant The “Asian” Pharmerging Markets Pharmerging Markets in Asia, 2016 (FCAGR %) • Asian Pharmerging Markets will add c.US$97Bn in annualized market value by 2016, c.75% of which is in China alone • Tier 2 Pharmerging Markets will add an annualized c.US$8.5Bn by 2016 • The expanded SEA region (ASEAN + South Asia ex-India) will grow by c.US$11Bn in 143Bn (16%) 4.1Bn (15%) 4.4Bn (19%) 4 Tier 1 Pharmerging Markets Source: IMS MIDAS data; IMSCG Asia ex-India) will grow by c.US$11Bn in annualized market value by 2016 • This represents over c.US$30Bn in cumulative value over the next 5 years! Tier 2 Pharmerging Markets 26Bn (15%) 3.9Bn (3%) 7.6Bn (12%) 4.4Bn (19%) TH: Retail Pharmacy, UPC | PH: BGx/UGx | MY: Public Hospitals BGx/UGx, Private Sector Ox So, where will the growth opportunities in this region be?
  5. 5. Growth opportunities in SEA region are numerous, but diverse Consequently, the “cost” of achieving success is high Opportunities and Prospects for Growth …with numerous ways to tap into this growthSplit of forward growth across the expanded SEA region… • NHI expansion • Expansion of value-conscious middle class + strong retail pharmacy influence • FDI in healthcare Growth driver Portfolio beneficiary • HC reform targeting primary care in cities and provinces Expansion of specialty care • Gx, Spec Ox • Gx, Affordable Ox, OTC • Pri + Spec Ox, BGx Vietnam $2.6 Indonesia $3.2 • Local Gx • Gx, Pri + Spec Ox 5 • Expansion of specialty care infrastructure & delivery + FDI • Expansion of value-conscious middle class • Broad-based expansion in access & affordability • Pockets of growth in private and retail pharmacy sectors • Ongoing healthcare reform • SEA’s new growth frontier? $1.9 TH $0.6 Malaysia, Thailand & Philippines PK $2.1 Bangladesh & Pakistan Myanmar MY $0.6 $0.1 – Could be higher? $2.8 PH $0.8 BD $0.7 Incremental annualized growth by 2016, US$Bn Source: IMS Analysis, IMS MIDAS Data • Gx, Pri + Spec Ox • BGx, Affordable Ox, OTC • BGx, Affordable Ox, OTC • Broad Ox + Gx, but limited in uptake, OTC MY: 1C1M Priority TAs such as CVM, Onco, COPD/Asthma, MH; Vaccines + Preventative Care; Medical Tourism; Gx in public sector | TH: Retail pharmacy driven Affordable Ox, OTC • Gx, Affordable Ox?
  6. 6. To leave an imprint… Pharmerging’s next frontier? Asia-Pacific market potential assessment* Countries >10M population Nascent markets Emerging markets Developed markets Healthcareexpenditurepercapita (US$2009) 10,000 1,000 100 Mongolia ThailandMalaysia China Taiwan South Korea JapanAustralia Opportunities and Prospects for Growth 6 Note: Asia-Pacific region as defined by UNESCO Source: IMSCG Healthcareexpenditurepercapita (US$2009) 100 10 1 Market size (US$bn in 2011) 1,000.00100.0010. Nepal Mongolia Laos Sri Lanka Pakistan Myanmar Cambodia Bangladesh Viet Nam Thailand Philippines Malaysia Indonesia India China
  7. 7. The dominant trend impacting the region today is healthcare reform and cost containment Healthcare is firmly on the agenda in SEA – While this drives overall growth, it also entails cost containment to balance budgets Dynamics and Trends in SEA Thailand + Move towards universal coverage – NLED de-listings in 2008 – CSMBS budget cuts & restrictions on prescribing & reimbursement, ’09 – Hospital audits (CSMBS), ’10 Vietnam + Expansion of social health insurance – Emphasis on local generics via tendering system – Reductions in hospital budget for originator products – DAV control on price increases 7 Malaysia + 10MP plan to expand primary care sector + “1 Care for 1 Malaysia” aiming for universal coverage – Generic emphasis for public sector Indonesia + Plan to implement universal coverage by 2014 and beyond (likely run by ASKES) – Compulsory prescribing of Gx in 2010 Singapore + Upgrading primary care sector (polyclinics & financial support for GPs) with focus on aging popl. – Fast-tracking of Indian Gx, ‘10 Philippines + KP reform aiming for UC by 2016 + Expanded medicines access via Philippines Medicines policy in 2011 – Cheaper medicines act & price cuts in 2009 & 2010 – Maximum drug retail price, 2010 Source: IMS Analysis, IMS Market Prognosis
  8. 8. Cost containment tools FR DE IT ES UK AUS CH IN JP KR TW ID MY PH TH VN VBP / Risk sharing agreements - HTA/ cost effectiveness assessments - - Quality/ innovation/ therapeutic value rating Generics promotion - - - - EU APAC ASEAN oftool ASEAN countries are increasingly adopting more sophisticated methods of cost containment Dynamics and Trends in SEA 8 Generics promotion - - - - International price referencing - - - Spending caps Patient contributions Prescribing controls - - Mandatory price cuts / controls - Only recently implemented/ limited application Complexityoftool FR: France, DE: Germany, IT: Italy,, ES: Spain, UK: United Kingdom, AUS: Australia, CH: China, IN: India, JP: Japan, KR: Korea, TW: Taiwan, ID: Indonesia, MY: Malaysia, PH: Philippines,, TH: Thailand, VN: Vietnam Source: IMSCG Most cost containment tools used are at the relatively low complexity end of the scale -
  9. 9. Reform and containment, coupled with strong local generics plays, is making SEA an increasingly difficult turf for MNCs MNCs have lost market share to generics firms recently, as patent expiries, pricing pressure and increasingly aggressive generics competitors come into play Dynamics and Trends in SEA 60 57 4442 60 56 43 41 45 65 60 55 50 -4% -2% -3% -4% -2% +1% Expanded SEA Top 10 MNC* Market Share by Country (2010 vs 2011) Share and Share change (%) Branded Generics players have stolen a march over MNC innovators, supported by • Cost-containment • Government emphasis on 9 39 20 18 8 34 41 37 19 17 8 32 25 20 15 10 40 35 PKVNIDTotal BD SG 30 0 -4% -5% 5 +1% MYTHPH -4% 20112010 Source: IMS Analysis, IMS MIDAS Data; *Top-10 MNCs for 2011 comprise Pfizer, Novartis, Merck, Sanofi, AZ, Roche, GSK, J&J, Abbott and Lilly LoE LoE Pri • Government emphasis on and support for generics • Public tendering in many SEA countries • Increasing reputation of branded generic manufacturers • LoE for blockbuster products • Prescribing according to national formulary listing
  10. 10. Generic penetration varies across SEA and has increased overall across countries 52% 85% 64% 62%Pakistan 1.729% 9% Indonesia 4.216% 20% Bangladesh 1.06% 9% 100%90%80%70%60%50%40%30%20%10%0% ASEAN* 16.433% 15% Expanded SEA Overall Market – Originator vs Generic Penetration (2011) Ox BGx Gx 9% 13% 13% 14% 18% 10% 12% 13% 13% 12% 18% 14% 2006- 2011 CAGR Dynamics and Trends in SEA 10 62% 54% 51% 37% 27% 28% 2.837% 13% Vietnam 1.731% 15% Pakistan 1.729% 9% Malaysia 1.354% 19% Thailand 3.049% 14% Philippines 0.760%Singapore 12% Originators Branded Generics Generics USD Billions Source: IMS Analysis, IMS MIDAS Data 12% 18% 14% 30% 36% 33% 3% 9% 10% 7% 8% 8% 21% 20% 29% 8% 12% 11%
  11. 11. MNCs can still win in the SEA region However, winning will entail a tailoring strategies to the region’s unique challenges Key Success Factors …and how MNCs could overcome themChallenges faced by MNCs in the SEA region… Diverse & heterogeneous market landscape • Tailored portfolio strategies, with an openness to adopt alternative commercial models for low priority brands • Active support of ASEAN harmonization, possibly more so than today Access & affordability • Willingness to partner with payers to improve access to high- quality primary care medicines • Supporting patient access and innovative pricing schemes to drive access and compliance for specialty medicines 11 Competitive, low compliance business environment • Partnering with local competitors possessing complementary capabilities (ex., local manufacturing, knowledge of local regulatory and tendering complexities, sales & distribution footprint outside top cities) • Selectively leveraging strong MNC brand identity in alternative business models (ex., OTC, BGx) • Working with local industry leaders to develop and adhere to basic ethical compliance norms Talent & capability • Openness to acquire talent from regional and leading local generic firms, with commitment to training and “moulding” to meet global MNC norms and expectations
  12. 12. About IMS Consulting Group IMS Consulting Group is present across 70 countries with over 500 consultants across the globe. As it focuses only on healthcare and life-sciences sector, our team of consultants bring a wide- and in-depthfocuses only on healthcare and life-sciences sector, our team of consultants bring a wide- and in-depth skill set that is unmatched by any other firm. IMS Consulting Group works with clients to facilitate a wide range of mission critical business decisions. Some typical work includes strategies to enter to specific geographic/ business/ therapy/ product markets and operational excellence initiatives to cover sales force as well as internal operations. If you would like to know more about what we can do for your business, contact us at: Dr. Srikanth Rajagopal: / +65 6412 7381