Murray Aitken, IMS senior vice president, Healthcare Insight, told attendees at a London conference sponsored by The Economist on Feb. 27, based on IMS forecasts, emerging markets will become an increasingly important driver of global pharmaceutical growth in future years.  Annual pharmaceutical sales in emerging markets is expected to reach $400 billion by 2020, equivalent to current sales in the U.S. and the five major European markets combined.  His comments were reported by Reuters and other major news outlets.

“By 2020, emerging markets will contribute more than 50 percent of worldwide pharmaceutical market growth, up from just 13 percent of growth in 2001 and an expected 33 percent in 2011,” said Aitken.  “IMS forecasts growth of 12-13 percent per year in countries including China, India, Brazil, Russia, Mexico, South Korea and Turkey, while mature markets are expected to grow only at low single-digit rates.”

Aitken stated that several of the largest multinational pharmaceutical countries already are generating strong growth in emerging markets, but others have been less successful.

“Emerging markets can be perilous for companies looking for quick and easy profit,” Aitken said.  “Many companies’ product portfolios and business models do not match the needs of the emerging markets environment, and domestic competition can be intense.  Intellectual property rights also remain an issue, and the rate and pace of market evolution can take unexpected detours.”

Emerging markets are tackling the same issues of balancing access, cost and quality that developed markets have been dealing with for decades.  As national health systems are developed in emerging market countries, pharmaceutical companies can provide leadership in areas such as promoting preventative care, establishing guidelines for pharmaceutical manufacturing and clinical trials, and evaluating drugs based on health economics and outcomes research.

Aitken added that, in order to be successful in emerging markets, pharmaceutical companies must align their interests with healthcare advancement and be prepared to adapt their business models to reflect local and regional political issues and economic disruptions.

“Above all, pharma managers need to remain flexible and be willing to focus time and energy on building their capabilities in emerging markets,” Aitken concludes.  “That’s where the prospects are for future growth and prosperity.”