Frost & Sullivan: BRIC is Not Delivering Promises of High Growth in Healthcare Markets
21 May, 2013, 12:56 BST
-- The dialogue evolves as it's no longer about volume, cost and size
MOUNTAIN VIEW, California, May 21, 2013 /PRNewswire/ -- Healthcare organizations expanding into emerging markets like Brazil, Russia, India and China (BRIC) are realizing there are no shortcuts. This is proving particularly challenging, considering the current healthcare environment, especially in the United States. Companies must change the dialogue around BRIC, as it is now more about establishing value, customizing to local needs, and building regional partnerships to build a sustainable business.
"While mature economies across the globe grapple with reducing cost, towering budget deficits, and anemic growth, the BRICs are expanding rapidly and driving the global economy," said Frost & Sullivan Partner Reenita Das during a recent analyst briefing. Das continued: "Although emerging markets are often touted as the way forward for healthcare companies, recent protectionism laws and fierce competition from generics may have reduced the appeal of countries such as India and China, leading some to believe they aren't the 'promised land' they once were."
For a copy of her presentation, "Is BRIC the Savior for the Life Sciences and Medical Devices Sector?" please email Britni Myers, Corporate Communications, at britni.myers@frost.com, with your full name, company name, job title, telephone number, company email address, company website, city, state and country.
"There are currently needs often overlooked or investments in these areas that have not been sufficient enough," said Das. "For example, the level of education and training of physicians in the BRIC countries, particularly away from the Tier 1 cities, is often a lot lower than that of physicians in mature markets. Another weak point is the lack of partnerships with local governments, NGOs and other trade organizations – this is really a very critical aspect and shows governments the level of commitment organizations are willing to make."
Overall, the market is witnessing a slowing of growth. To further debilitate matters, the industry is seeing a changing attitude from regional BRIC governments, which is even more perplexing. In India, price cuts were introduced to make drugs or devices like stents more accessible to patients. China plans to introduce a fast-track approval process for new drugs that could exclude firms that have not conducted clinical trials in the country. Meanwhile, Russia is proposing to limit the state purchasing of foreign medicines, and Brazil has introduced higher import tariffs to encourage local industry. These trends impart a mark of further protectionism and control by the state, and more is expected to come.
"The success in the region will be less about emerging markets being cheap and more about how companies can capture the growth in these markets moving forward," said Das. "There is a real chance for the industry to innovate in emerging markets by using disruptive technology and establishing a new commercial model that has the potential to become a relevant option for use in the developed world as well."
Das concluded: "It is very clear we need to rethink emerging market strategies and start changing the dialogue. We must move away from looking at it as a volume business in terms of large number of patients and demographics to more about where we can deliver the value to create the access that is required to meet demand."
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