Finding the best entry strategies into new markets
Exploring the four key routes to market
White Paper
Jan 31, 2019

For biopharma companies, extending focus to new markets presents a great potential but navigating the entry – be it into emerging or well-established markets – can be complicated, costly, and time-consuming. This paper outlines the obstacles biopharma companies can face when entering new markets, the benefits and risks of different market access strategies, and how to choose an approach that delivers long-term value to their business.

As the biopharma and healthcare industries become more global, markets outside companies' primary existing focus are becoming more attractive. For some companies, this may mean exploring beyond their established markets of the U.S., Japan, and EU5 into emerging markets such as Turkey, the BRIC (Brazil, Russia, India, China) countries, or the Middle East, Africa, and Latin America. For domestic companies that are established in their own market, such as those with a well-known brand in countries like Japan, China, or India, this could mean staking a claim in Europe or the U.S.


BUILDING A BASE IN THE EMERGING MARKETS

The share of biopharma spend in the emerging markets has grown from 13% in 2007 to 24% in 2017, an average rate of increase of 12.8%. While the rate of growth is slowing, it's still expected to continue to grow by 6-9% to $345- 375 billion by 2022. The growth in the emerging markets is driven by aging populations, improved prosperity, and government initiatives to bolster access to better healthcare. The need for more robust pharmaceutical treatment options in many of the emerging countries remains substantial. Populations in these countries suffer from a myriad of chronic health issues, including diabetes, cancer, heart disease, and others. China and India have high populations of people with diabetes with 121 million and 74 million, respectively. The highest upsurge is expected to be in African, Middle Eastern, Northern African, and South-East Asian regions over the next three decades. The leading cause of death in Russia is cardiovascular disease, accounting for over half of deaths in this region. In Brazil, the top three causes of death are ischemic heart disease, stroke, and lower respiratory tract infections.

The growth of developed markets is slowing. Branded drug net spending growth has flattened over the past five years. This means that emerging markets aren’t just going to be a 'nice to have' side business. In the coming years they are likely to represent larger proportions of sales volumes, making them vital to long-term profitability. While these countries still have relatively low price thresholds, the large volume of need makes them important strategic destinations for biopharma companies, but only if they can develop targeted market plans that address the unique needs of local consumers, physicians, regulators, and payers.


GROWING OUT OF A DOMESTIC BASE

It's not just about the emerging markets though. For a domestic company, for example in India or China, extending into other markets would allow them to access the opportunities in the U.S. or Europe. As an example of an opportunity, specialty pharmaceuticals are growing in the developing world. The predicted 2018 specialty spend in the developed world has grown from $172 billion in 2013, and now makes up 41% of developed market spending.

Bringing a drug to market in a new destination country can be fraught with risk. Evolving regulations, lack of an inhouse sales network on the ground, unfamiliar marketplace mechanics, and uncertainty about local laws and IP protection are just a few of the challenges that biopharma companies face when they try to break into an unfamiliar market. It can be difficult for larger biopharma companies that may have the time and resources to establish the necessary infrastructure, relationships, and feet on the ground to establish its brand in these destinations. For small and mid-sized companies, choosing the right strategy is vital for success. Companies, both large and small, are looking for smarter ways to enter new regions.


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