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South East Asias Pharmerging Landscape
IBC Asia South East Asia Pharmaceutical Forum
Sep 2012
Singapore
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Over the next 30 minutes we will touch briefly upon
The Asian Pharmerging Markets and growth opportunities therein
Dynamics & trends that make South East Asia a unique andchallenging environment
Key success factors in South East Asia
Q&A
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c.55% of this Pharmerging Market growth will be driven by AsiaGrowth prospects in Tier 2 markets, while dwarfed by China, are not insignificant
Tier 1 PharmergingMarkets
Source: IMS MIDAS data; IMSCG
The Asian Pharmerging Markets
Pharmerging Markets in Asia, 2016 (FCAGR %)
Asian Pharmerging Markets will addc.US$97Bn in annualized market value by2016, c.75% of which is in China alone
Tier 2 Pharmerging Markets will add anannualized c.US$8.5Bn by 2016
The expanded SEA region (ASEAN + SouthAsia ex-India) will grow by c.US$11Bn inannualized market value by 2016
This represents over c.US$30Bn incumulative value over the next 5 years!
Tier 2 PharmergingMarkets
143Bn (16%)
4.1Bn (15%)
26Bn (15%)
3.9Bn (3%)
7.6Bn (12%)
4.4Bn (19%)
TH: Retail Pharmacy, UPC | PH: BGx/UGx | MY: Public Hospitals BGx/UGx, Private Sector Ox
So, where will thegrowth opportunities in
this region be?
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Growth opportunities in SEA region are numerous, but diverseConsequently, the cost of achieving success is high
Opportunities and Prospects for Growth
with numerous ways to tap into this growthSplit of forward growth acrossthe expanded SEA region
NHI expansion
Expansion of value-consciousmiddle class + strong retailpharmacy influence
FDI in healthcare
Growth driver P o r t f o l i o b e n e f i ci a r y
HC reform targeting primary
care in cities and provinces
Expansion of specialty careinfrastructure & delivery + FDI
Expansion of value-consciousmiddle class
Broad-based expansionin access & affordability
Pockets of growth in privateand retail pharmacy sectors
Ongoing healthcare reform
SEAs new growth frontier?
Gx, Spec Ox
Gx, Affordable Ox,OTC
Pri + Spec Ox, BGx
$1.9TH $0.6
Malaysia,Thailand &Philippines
PK $2.1
Vietnam $2.6
Indonesia $3.2
Bangladesh& Pakistan
Myanmar
MY $0.6
$0.1 Could be higher?
$2.8
PH $0.8
BD $0.7
Incremental annualizedgrowth by 2016, US$Bn
Source: IMS Analysis, IMS MIDAS Data
Local Gx
Gx, Pri + Spec Ox
BGx, Affordable Ox,OTC
BGx, Affordable Ox,
OTC
Broad Ox + Gx, butlimited in uptake,OTC
MY: 1C1M Priority TAs such as CVM, Onco, COPD/Asthma, MH; Vaccines + Preventative Care; MedicalTourism; Gx in public sector | TH: Retail pharmacy driven Affordable Ox, OTC
Gx, Affordable Ox?
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To leave an imprintPharmergings next frontier?
Asia-Pacific market potential assessment*Countries >10M population
Note: Asia-Pacific region as defined by UNESCO
Source: IMSCG
Nascent markets
Emerging markets
Developed markets
Healthcare
expenditure
percapita
(US$
2009)
10,000
1,000
100
10
1
Market size (US$bn in 2011)
1,000.00100.0010.001.000.100.01
Nepal
Mongolia
Laos
Sri Lanka
Pakistan
Myanmar
Cambodia
Bangladesh
Viet Nam
Thailand
Philippines
Malaysia
Indonesia
India
China
Taiwan
South Korea
JapanAustralia
Opportunities and Prospects for Growth
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The dominant trend impacting the region today is healthcarereform and cost containmentHealthcare is firmly on the agenda in SEA While this drives overall growth, italso entails cost containment to balance budgets
Dynamics and Trends in SEA
Malaysia+10MP plan to expand primary
care sector+1 Care for 1 Malaysia aiming
for universal coverage Generic emphasis for public
sector
Indonesia+Plan to implement universal coverage
by 2014 and beyond (likely run byASKES)
Compulsory prescribing of Gx in 2010
Thailand+Move towards universal coverage NLED de-listings in 2008 CSMBS budget cuts & restrictions on
prescribing & reimbursement, 09 Hospital audits (CSMBS), 10
Singapore+Upgrading primary care sector
(polyclinics & financial support forGPs) with focus on aging popl.
Fast-tracking of Indian Gx, 10
Philippines+KP reform aiming for UC by 2016+Expanded medicines access via
Philippines Medicines policy in 2011 Cheaper medicines act & price cuts in
2009 & 2010 Maximum drug retail price, 2010
Vietnam+Expansion of social health insurance Emphasis on local generics via
tendering system Reductions in hospital budget for
originator products DAV control on price increases
Source: IMS Analysis, IMS Market Prognosis
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Cost containment tools FR DE IT ES UK AUS CH IN JP KR TW ID MY PH TH VN
VBP / Risk sharingagreements
-
HTA/ cost effectivenessassessments
- -
Quality/ innovation/therapeutic value rating
Generics promotion - - - -
International pricereferencing
- - -
Spending caps
Patient contributions
Prescribing controls - -
Mandatory price cuts /controls
-
Only recently implemented/ limited application
EU APAC ASEAN
Complexityofto
ol
FR: France, DE: Germany, IT: Italy,, ES: Spain, UK: United Kingdom, AUS: Australia, CH: China, IN: India, JP: Japan, KR:Korea, TW: Taiwan, ID: Indonesia, MY: Malaysia, PH: Philippines,, TH: Thailand, VN: Vietnam
Source: IMSCG
Mo s t c o st c o n t a i n m e n t t o o l s u s e d a r e a t t h e
r e l a t i v e l y l o w c om p l e x i t y e n d o f t h e s c a le-
ASEAN countries are increasingly adopting more sophisticatedmethods of cost containment
Dynamics and Trends in SEA
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Reform and containment, coupled with strong local genericsplays, is making SEA an increasingly difficult turf for MNCsMNCs have lost market share to generics firms recently, as patent expiries,pricing pressure and increasingly aggressive generics competitors come into play
Dynamics and Trends in SEA
6057
4442
39
20
18
8
34
60
56
4341
37
1917
8
32
25
45
20
15
10
65
60
55
50
40
35
PKVNIDTotal BD SG
30
0
-4%
-2%-3%
-4%
-5%
5
-2%
+1%
MYTH
+1%
PH
-4%
20112010
Expanded SEA Top 10 MNC* Market Share by Country (2010 vs 2011)
Share and Share change (%)
Source: IMS Analysis, IMS MIDAS Data; *Top-10 MNCs for 2011 comprise Pfizer, Novartis, Merck, Sanofi, AZ,
Roche, GSK, J&J, Abbott and Lilly
LoE LoE Pri
Branded Generics playershave stolen a march overMNC innovators, supported by
Cost-containment Government emphasis on
and support for generics
Public tendering in manySEA countries
Increasing reputation ofbranded genericmanufacturers
LoE for blockbusterproducts
Prescribing according tonational formulary listing
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Generic penetration varies across SEA and has increased overallacross countries
52%
85%
64%
62%
54%
51%
37%
27%
28%
2.837% 13%
Vietnam 1.731% 15%
Pakistan 1.729% 9%
Indonesia 4.216% 20%
Bangladesh 1.06% 9%
100%90%80%70%60%50%40%30%20%10%0%
Malaysia 1.354% 19%
Thailand 3.049% 14%
Philippines
ASEAN* 16.433% 15%
0.760%Singapore 12%
Originators Branded Generics Generics
USD Billions
Source: IMS Analysis, IMS MIDAS Data
Expanded SEA Ove r a l l Market Originator vs Generic Penetration (2011)
Ox BGx Gx
9% 13% 13%
14% 18% 10%
12% 13% 13%
12% 18% 14%
30% 36% 33%
3% 9% 10%
7% 8% 8%
21% 20% 29%
8% 12% 11%
2006- 2011 CAGR
Dynamics and Trends in SEA
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MNCs can still win in the SEA regionHowever, winning will entail a tailoring strategies to the regions unique challenges
Key Success Factors
and how MNCs could overcome themChallenges faced by MNCs inthe SEA region
Diverse & heterogeneousmarket landscape
Tailored portfolio strategies, with an openness to adoptalternative commercial models for low priority brands
Active support of ASEAN harmonization, possibly more sothan today
Access & affordability
Willingness to partner with payers to improve access to high-quality primary care medicines
Supporting patient access and innovative pricing schemes to
drive access and compliance for specialty medicines
Competitive, low compliancebusiness environment
Partnering with local competitors possessing complementarycapabilities (ex., local manufacturing, knowledge of localregulatory and tendering complexities, sales & distributionfootprint outside top cities)
Selectivelyleveraging strong MNC brand identity inalternative business models (ex., OTC, BGx)
Working with local industry leaders to develop and adhere tobasic ethical compliance norms
Talent & capability
Openness to acquire talent from regional and leading localgeneric firms, with commitment to training and mouldingto meet global MNC norms and expectations
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About IMS Consulting Group
IMS Consulting Group is present across 70 countries with over 500 consultants across the globe. As itfocuses only on healthcare and life-sciences sector, our team of consultants bring a wide- and in-depthskill set that is unmatched by any other firm.
IMS Consulting Group works with clients to facilitate a wide range of mission critical business decisions.Some typical work includes strategies to enter to specific geographic/ business/ therapy/ productmarkets and operational excellence initiatives to cover sales force as well as internal operations.
If you would like to know more about what we can do for your business, contact us at:
Dr. Srikanth Rajagopal: [email protected]/ +65 6412 7381
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