Drugmakers need to think local in emerging markets, execs say
Drugmakers know by now that emerging markets aren’t a quick fix. Though fast-developing countries such as China and India offer the promise of fast growth in drug sales, it’s more difficult to tap those markets-and as Booz & Co. points out in a new report, every country requires its own idiosyncratic strategy.
Too bad drugmakers didn’t know this out of the gate. Big drugmakers have made a laundry list of mistakes as they move to conquer emerging markets, Booz says. As one of the consulting firm’s pharma sources said, «One of our biggest mistakes was to treat emerging markets like mature markets. We were wrong. Pharmaceutical strategies have to fit a country’s individual needs and its development.»
Still, pharma leaders figure they’re now ready for the challenge. In a study of top pharmaceutical executives, Booz found that a majority expect more than 30% of their global sales to originate in emerging markets by 2018. The hottest markets-Brazil, Russia, India, China, Mexico and Turkey-will remain the hottest. But second-tier markets like Poland and Indonesia are increasingly important.
So, if real estate’s mantra is location, location, location, then pharma’s emerging-markets approach should be local, local, local. Especially in top-tier emerging markets, pharma companies see local R&D and manufacturing as «the most effective levers for commercial success," Booz says. Three-fourths of surveyed executives favor a local sales force. It’s key to build good relationships with local governments and local industry players, they said. And recruiting local talent-not to mention keeping it-can be a make-or-break proposition.