Emerging markets might not be all they’re cracked up to be for healthcare companies, according to a Frost & Sullivan report, as protectionist import policies and competition from generics prove to be big challenges.
Markets the so-called BRIC countries – Brazil, Russia, India and China – aren’t proving to be as easy to penetrate as healthcare companies once thought, according to F&S partner Reenita Das.
"Although emerging markets are often touted as the way forward for healthcare companies, recent protectionism laws and fierce competition from generics may have reduced the appeal of countries such as India and China, leading some to believe they aren’t the ‘promised land’ they once were," Das said, according to a press release.
"There are currently needs often overlooked or investments in these areas that have not been sufficient," she added. "For example, the level of education and training of physicians in the BRIC countries, particularly away from the Tier 1 cities, is often a lot lower than that of physicians in mature markets. Another weak point is the lack of partnerships with local governments, NGOs and other trade organizations – this is really a very critical aspect and shows governments the level of commitment organizations are willing to make."
As an example, take India, where regulators have slashed the reimbursement rate for medical devices and drugs, including a 62% cut for drug-eluting stents.
"Success in the region will be less about emerging markets being cheap and more about how companies can capture the growth in these markets moving forward," Das said. "There is a real chance for the industry to innovate in emerging markets by using disruptive technology and establishing a new commercial model that has the potential to become a relevant option for use in the developed world as well."
