The report, released today, says the global drug firms are counting on emerging markets to extend the life of their mature (off patent) products as well as to develop new markets for their ethical (patented) products.
“The emergence of a middle class with growing disposable incomes in rapidly expanding countries with large populations, such as Brazil, Russia, India, China, Korea, Mexico, represents tens of millions of new customers, who will demand improved healthcare. Executives surveyed discussed the importance of having an emerging market strategy and many mentioned that their companies have extensive expansion plans underway to increase market share in emerging markets,” the report said.
Highlighting the importance of emerging markets, Hitesh Sharma, national leader & partner, healthsciences practice, Ernst & Young India said: "Growth in emerging markets like India will play a key role in current times for the pharma industry. Companies need to consider how they increase the speed of change by prioritizing, allocating resources effectively and exercising rigor in project management. The finance function and risk and control functions will take a more prominent role and will be tasked with driving more sophisticated financial strategies more specifically targeted on value creation.”
According to the study, pharmaceutical executives are exploring more strategic and sustainable approaches to create lasting cost advantages. “They aim to rely less on cost-cutting campaigns that ignore or imperil long-term growth plans. Only 40 per cent of executives ranked optimizing costs as their most important initiative, compared to a similar study in 2007 in which 92 per cent of executives ranked cost reduction as their number one initiative,” the report said.
