Pharmerging Market:Greenfield Investment Increase Global Share In Healthcare Industry

A robust revenue growth of the global pharmaceutical market is poised to break horizon from the pharmerging market. Sales growth in the matured markets such as the U.S., Canada, Western Europe, U.K., and Japan is expected to slow down owing to patent expirations followed by the prevalence of low-cost generics. Introduction of new molecular entities will only drive these shrinking (matured) markets in future. However, as research consumes long periods and huge costs, pharmaceutical multinationals are eyeing the pharmerging market to offset for their investments and sustain a modest growth in the global pharmaceutical market.

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IMS has defined pharmerging markets or countries as those having a per capita GDP threshold of USD 25,000 and more than USD one billion spending growth from 2012 to 2016. Thus includes 21 countries which are identified based on the IMS defined parameters coupled with the macroeconomic factors and respective pharmaceutical market forecasts. IMS estimates that these 21 pharmerging markets will add USD 187 billion in annual sales to the global pharmaceutical market between 2012 and 2017. This value represents two third of the global pharmaceutical market growth which will be an increase of global share from 23% in 2012 to 33% in 2017. The BRIC nations i.e. Brazil, Russia, Indian and China will lead the pharmerging market.

IMS has classified the pharmerging markets into three categories as tier 1, tier 2 and tier 3 markets. Tier 1 pharmerging market includes China which is the largest and fastest growing pharmaceutical market. It will be the largest pharmerging market supported by the growing healthcare spending by Chinese government, implementation of the four year plan (2012 – 2015) for the prevention and control chronic diseases and drug cost lowering measures. Tier 2 category includes India, Brazil and Russia. Pharmaceutical market in these countries is expected to be driven by rising government healthcare expenditure, increasing purchasing power of general population, roaring access to medicines, rising and aging population and growing burden of chronic diseases. Tier 3 category includes the rest 17 countries which is further differentiated into two groups based on the average pharmaceutical spend per capita.

The spending growth in the pharmerging market is expected to grow with a CAGR of 12% to 15% which will expedite the market growth in these countries. Moreover, the pharmerging market is witnessing an increase in mergers and acquisitions among multinationals, to seize best of the opportunities in these revenue driver markets. For instance, Abbott Laboratories acquired Piramal Healthcare in 2010 becoming a leader in the Indian Pharmaceutical Market. Besides, Eli Lilly expanded a strategic partnership with Chinese manufacturer Novast Laboratories Ltd. in 2011 to provide Chinese patients with high-quality generic medicines. Such activities are expected to grow further which will boost the pharmerging markets further in the near future. Moreover, apart from the inorganic route, multinationals are also growing through organic route by investing in these countries to establish their research or manufacturing facilities. Greenfield investment will prove to be a long term boon for these pharmerging countries. One of the biggest challenges faced by the multinationals in the pharmerging market is pricing pressure which impacts the profit margin of these companies. Big pharmaceutical companies need to lower their prices to compete in the local market.

Some of the key players present in the pharmerging market include Abbott Laboratories, Amgen Inc., Merck & Co Inc., Novartis International AG, Bristol-Myers Squibb Co, Boehringer Ingelheim Pharmaceuticals Corporation, Bayer HealthCare AG, AstraZeneca plc, Sanofi S.A., Pfizer Inc., Novo Nordisk A/S., Johnson & Johnson, GlaxoSmithKline plc and Eli Lilly and Co.

This research report analyzes this market on the basis of its market segments, major geographies, and current market trends. This report provides comprehensive analysis of
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