LONDON--(BUSINESS WIRE)--Technavio’s latest report on the pharmerging markets provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
The top four emerging trends driving the pharmerging markets according to Technavio research analysts are:
- Strategic alliances
- Increase in generic sales
- Mergers and acquisitions
- Early drug launches in pharmerging markets
Forming strategic alliances for licensing and collaboration help in the co-development and commercialization of drugs and ensure the in-flow of adequate funds from both companies and help to reduce liability costs for individual companies in case of failures. They also attract more venture investments. Big pharmaceutical companies, to retain their presence in pharmerging markets, increasingly adopt partnership activities with local vendors for the development of new products, especially generic drugs.
“Pfizer announced its partnership with Laboratório Teuto Brasileiro to develop and commercialize generic medicines in Brazil in 2010. Eli Lilly expanded its strategic partnership with Chinese manufacturer Novast Laboratories in 2011 to serve Chinese patients with high-quality generic medicines,” says Barath Palada, a lead analyst at Technavio for healthcare and life sciences.
Increase in generic sales
Pharmerging countries mostly include developing or less-developed countries where the affordability of drugs plays a major role for the blossoming of the market. Hence, the utilization and sale of generic drugs are high. Though the sales of generics have slowed down, the sales still outpace the sales of originator molecules. Also, pharmaceutical companies such as Pfizer and Sanofi are showing an interest toward the development of generics for attaining considerable shares in the pharmerging markets. The weaker patent protection coupled with favorable government policies for local manufacturers help to increase the production and sales of generic drugs in pharmerging countries.
Mergers and acquisitions
Mergers and acquisitions help to generate better revenues and develop advanced drugs. Co-development and commercialization rights for the drugs also make sales easier. For instance, Novartis signed an agreement to acquire the specialty dermatology generics company Fougera Pharmaceuticals. This enabled the former to become the number-one generic dermatology medicines company. The acquisition of a local company helps pharmaceutical companies to strengthen their presence in these markets. For instance, Abbott Laboratories acquired Piramal Pharma Solutions for USD 2.12 billion in 2010, which enabled it to strengthen its position in India.
Early drug launches in pharmerging markets
The changing healthcare landscape drives pharmaceutical companies to adapt strategy of launching their products in pharmerging markets as well as in mature markets. Pharmerging markets hold huge potential for new launches, as initiatives are being taken by local governments to increase the reimbursement coverage for individuals and drugs. Also, careful planning is required before drug launch, which helps to attain better profits.
For instance, the revenue gained by the launch of the hepatitis B product Baraclude by BMS in China is significant. BMS attained this goal with intensive pre-launch research and training, the latter of which was given to healthcare specialists on the effects of the drug. “China remains the most popular destination for the majority of companies for early drug launches. However, the pattern of revenue generated from each of these early drug launches varies across pharmerging markets, unlike in mature markets,” adds Barath.
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