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Opportunities and challenges of the “One Belt, One Road” emerging pharmaceutical market


China has become the second largest biomedical market in the world. However, in recent years, under the influence of a series of policies such as consistency evaluation and quantity procurement, the domestic pharmaceutical market environment has undergone drastic changes, and international development has become an important starting point for promoting the restructuring of China's pharmaceutical industry and the transformation and upgrading of pharmaceutical companies.

In the process of internationalization, on the one hand, the growth of the pharmaceutical market in developed countries and regions such as Europe and the United States has slowed down, the technical regulations are strict, and the difficulty of entry has increased; on the other hand, the potential of emerging markets is huge. According to statistics, 80% of the growth of pharmaceutical sales in the future comes from emerging markets. By 2022, emerging markets will account for 56% of the global pharmaceutical market, and in 2012 this figure was only 49%. The “One Belt, One Road” initiative provides a historical opportunity for international cooperation between domestic and emerging market countries.

Prospects for the emerging pharmaceutical market

On October 29th, the “One Belt and One Road” Emerging Medicine Market Seminar and the China Pharmaceutical and Health Products Import and Export Chamber of Commerce and the Clarivate Analytics Strategic Cooperation Framework Agreement Signing Ceremony were held in Beijing. At the meeting, according to Wu Fang, researcher and deputy director of the “Belt and Road” Economic and Trade Cooperation Institute of the Ministry of Commerce, as of the end of August 2019, 136 countries and 30 international organizations had signed 195 co-constructions with China. All the way "cooperation documents. The total trade volume of goods between China and the “Belt and Road” countries increased from 1.04 trillion US dollars in 2013 to 1.27 trillion US dollars in 2018, accounting for 27.4% of China's total trade in goods.

According to the China Medical Insurance Chamber of Commerce, the huge population base of emerging markets, huge market capacity, low drug self-sufficiency rate, high import dependence, and the escalation of the “One Belt, One Road” FTA have been carried out for domestic pharmaceutical companies in emerging markets. Health care cooperation has laid a solid foundation.

Source: China Medical Insurance Chamber of Commerce Statistics

Opportunities and challenges in major emerging pharmaceutical markets

Ke Ruiwei's Life Science and Pharmaceutical Solutions Consultant Zeng Yali is based on the emerging market analysis provided by the Corey Safe Ball Strategy Team, the Cortellis Global Drug Regulatory Intelligence Database (CRI), Clinical Trial Database (CTI), and Incidence Rate and Prevalence Database (IPD) and Generic Drugs, APIs and Newport Premium, analyzing Middle East and North Africa (MENA), Sub-Saharan Africa (SSA), Latin America (LATAM), Overview and trends of major emerging pharmaceutical markets such as the Russian pharmaceutical market.

MENA Pharmaceutical Market

The MENA pharmaceutical market provides a profitable opportunity for pharmaceutical companies. The biopharmaceutical market in the region is over US$20 billion and is growing at an annual rate of 8%, with patented drugs accounting for 65-80% of total drug market sales. More importantly, MENA acts as a region with all the conditions that all pharmaceutical manufacturers want: population growth and aging; unmet medical needs; a growing middle class; wanting to get and pay for brands and generics; Long life expectancy, lower mortality, higher income levels; increased prevalence of lifestyle-related diseases, such as diabetes; opening the door to African markets...

In addition, Ms. Zeng Yali also introduced the key points for success in the MENA market: 1. Branding effects should be established for both generic and patented drugs; 2. Use social media and mobile applications to provide helpful health tools to patients; 3. Improve community awareness of health issues and diseases; 4. Recruit and train skilled biopharmaceutical workers (eg, provide internships, online courses and scholarships); 5. Provide regional training programs and scholarships for global conferences to help the Middle East and North Africa The doctors in the area keep pace with the development of medicine; 6. Conduct clinical trials on the approved drugs to improve the doctor's awareness;

SSA Pharmaceutical Market

SSA is gradually becoming a major pharmaceutical market, with business opportunities in the African pharmaceutical market expected by 2020 due to the changing economic landscape, rapid urbanization, increasing medical expenditures and investments, and the rising incidence of chronic lifestyle diseases. Will reach $45 billion. In addition, Africa's tropical climate has made the continent a major reservoir for infectious diseases, particularly malaria, tuberculosis and acquired immunodeficiency syndrome (AIDS). As Africa adopts Western lifestyles more and more, the burden of disease shifts to non-communicable diseases (NCDs), which also drives demand for chronic prescription drugs.

Opportunities and challenges coexist, and the diversity of regulation in the SSA pharmaceutical market and the listing of drugs face many difficulties:

1. The listing and clinical trials were delayed. Market access approvals for some low- and middle-income countries (LMICs) are delayed, and for medical products, the delay may be 4-7 years.

2. The SSA consists of 48 countries. Between LIMICs, demand tends to vary widely, but it is difficult for pharmaceutical companies to develop the same drugs for different countries, and the lack of integration of approval mechanisms between countries.

3. Meeting the needs is challenging. The challenges in this area are mainly reflected in the differences in the maturity and consistency of the regulatory bodies. There is a huge gap between countries in terms of market size, growth trajectory, macroeconomic structure, legal structure and political complexity.

4. The requirements for stability for different LMICs may vary. The SSA covers three climatic zones: II, IVa and IVb, while pharmaceutical companies may only be aware of the first climatic zone. If they want to meet different needs, they need to re-test the stability without a predictable stability test. The time to market is delayed by at least 6 months.

LATAM Pharmaceutical Market

The Latin American pharmaceutical market is exemplified by three key countries: Argentina, Brazil and Mexico.

Argentine pharmaceutical market: Argentina is the fourth largest pharmaceutical market for LATAM. After years of strong expansion, pharmaceutical sales growth has slowed down, the economy has slowed down sharply, real income has decreased and inflation has continued. In this context, pharmaceutical companies face the dual challenge of providing consumers with affordable and effective treatment on the one hand and income and market goals on the other.

Brazilian pharmaceutical market: Brazil is the sixth largest market in the world. Despite having a nationwide health care project, Sistema Unico de Saude, 25% of the population chooses to buy private insurance to get second- and third-line medical services, which leads to a large number of patients. Obtaining an ultra-basic level of care allows potential subjects to be largely in the early stages of treatment, which not only promotes the involvement of clinical trials, but also promotes patient continuity. In addition, Brazilian generics are highly competitive, but increasing attention to early clinical trials is good news for innovative research.

Mexican pharmaceutical market: Mexico is the 11th largest pharmaceutical market in the world with a market size of more than $13.2 billion. With a population of 120 million, a stable economic situation, an expected GDP growth of 2.1%, and a wide range of medical needs, especially related to chronic diseases such as cardiovascular, diabetes and cancer, many multinational companies still consider Mexico to be an “emerging market”.

Russian pharmaceutical market

Russia remains a major emerging market with better growth prospects than the EU and US markets. In 2011-2019, Russia's compound annual growth rate (CAGR) exceeded 10%, generics accounted for more than 51% of market capacity, and some reports also said that generics accounted for more than 70%, and generics accounted for 20% of market sales. It is expected that per capita drug consumption will continue to increase in the next few years, and domestic drug production will grow at an average annual rate of 25%.

However, private medical insurance continues to grow as Russia's coverage of voluntary medical insurance (VHI) covering only basic content is insufficient and there are more and more private doctors facing the rich. Compared with Russian pharmaceutical companies, foreign multinationals are in the retail/prescription-private paid outpatient pharmacy-commercial segment (2/3 of sales) and DLO (Supplementary Drug Supply Program) - which is beneficial to foreign innovative drugs (imports accounted for 47% of the total) and the three market segments of the hospital dominate.