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Emerging markets: healthcare need & commercial opportunity


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Emerging markets: healthcare need & commercial opportunity

  1. 1. Healthcare Need & Commercial Opportunity Emerging Markets
  2. 2. Need <ul><ul><li>State of the art care for the few? </li></ul></ul><ul><ul><li>Basic care for everyone? </li></ul></ul><ul><ul><li>Quality essential care for everyone? </li></ul></ul>
  3. 4. Needs <ul><li>BRICs </li></ul><ul><ul><li>Diabetes, cardiovascualar, anti infectives, vaccines </li></ul></ul><ul><li>Developing World </li></ul><ul><ul><li>Vitamin A, parasite control, malaria, insecticides, reproductive health </li></ul></ul>
  4. 5. The Objective <ul><li>Equitable access </li></ul><ul><ul><li>Social cohesion </li></ul></ul><ul><li>Affordable care </li></ul><ul><ul><li>Appropriate price and cost </li></ul></ul><ul><li>Sustainability </li></ul><ul><ul><li>Balance between best care for all and efficient optimisation of care </li></ul></ul>
  5. 6. Healthcare System Design <ul><li>Complex systems in government hands </li></ul><ul><ul><li>Efficient? </li></ul></ul><ul><ul><li>Cost effective? </li></ul></ul><ul><li>Role of the Private Sector </li></ul><ul><ul><li>Cost efficiency </li></ul></ul><ul><ul><li>Allocation of resources </li></ul></ul><ul><ul><li>Insurance model </li></ul></ul>
  6. 7. Commercial Opportunity <ul><li>IMS Health Emerging Markets Forecast </li></ul><ul><ul><li>12% growth </li></ul></ul><ul><ul><li>By 2020 30% of Global Pharma Sales </li></ul></ul><ul><ul><li>50% of Global Pharma Sales Growth </li></ul></ul><ul><ul><li>China drug spend $15 per person per year, US $950 </li></ul></ul>
  7. 8. Global Pharma Sales Growth Forecasts
  8. 10. Recent Developments <ul><li>Big Pharma looking for growth </li></ul><ul><ul><li>GSK new senior Executive </li></ul></ul><ul><ul><li>Pfizer major part of new strategy </li></ul></ul><ul><ul><li>Sanofi new markets for ex branded drugs </li></ul></ul><ul><li>J&J referenced need for </li></ul><ul><ul><li>Emerging markets appropriate products </li></ul></ul>
  9. 11. Issues <ul><li>Access </li></ul><ul><li>Reimbursement </li></ul><ul><li>IP respect </li></ul><ul><li>Corruption </li></ul>
  10. 12. Access <ul><li>Marginal price should equal Margin willingness to pay, but </li></ul><ul><ul><li>In different countries willingness to pay is dramatically different </li></ul></ul><ul><ul><li>Universal Global Pricing denies access to enormous numbers of patients </li></ul></ul><ul><li>Should there be Tiered Pricing? </li></ul>
  11. 13. Producer Revenue Price Quantity Demand Curve Efficiency Loss
  12. 14. Price Quantity Demand Curve Efficiency Loss Producer Revenue
  13. 15. Current drug access No/limited access People Price Access?
  14. 16. Reimbursement <ul><li>Reimbursement system will determine access and cost parameters </li></ul><ul><li>Fundamental problem with buyer knowledge in healthcare markets </li></ul><ul><li>Managed Care as the informed pricing agent </li></ul><ul><li>Government buyers e.g. UK’s not so nice NICE </li></ul>
  15. 17. IP <ul><li>Lack of IP enforcement </li></ul><ul><ul><li>IP underpins the innovation model </li></ul></ul><ul><ul><li>Investment is unattractive </li></ul></ul><ul><ul><li>Multinationals may not participate </li></ul></ul><ul><ul><li>R&D cross fertilisation is inhibited </li></ul></ul>
  16. 18. Corruption <ul><li>Negative relationship between economic development and corruption </li></ul><ul><li>Positive relationship between multinational penetration and lower corruption </li></ul><ul><li>High human cost of fake drugs </li></ul><ul><ul><li>30% of drugs in government hospitals in India are counterfeit, 60% of which have no active ingredient </li></ul></ul>
  17. 19. Other Opportunties <ul><li>Outsourcing R&D and Manufacturing </li></ul><ul><ul><li>well underway </li></ul></ul><ul><li>Services Offshoring </li></ul><ul><li>R&D internalisation </li></ul><ul><ul><li>The long game </li></ul></ul><ul><li>Medical Tourism </li></ul><ul><ul><li>$160bn market by 2012 per The Economist </li></ul></ul>