Data & strategy adaptation and adoption in international pharma markets

How do companies adapt and evolve to different data needs, especially when they are expanding their international presence?

A few years ago, multinational pharma companies seeking growth and respite from market uncertainty in Europe and the United States found a haven in emerging markets. Their rapid economic growth triggered an expansion in healthcare coverage and the emergence of a new cohort of consumers able to afford larger out-of-pocket spending on drugs. But early euphoria was soon replaced by a more sombre outlook.

Some emerging markets either suffered downturns or showed weaker growth forecasts as commodity prices fell; some healthcare systems struggled to scale up adequately their provision of care; and local companies became increasingly effective competitors in the pharma market. Furthermore, multinationals themselves often found it difficult to scale up in emerging markets, with challenges in talent recruitment, compliance, and organisational setup. By contrast, developed markets like the United States were doing rather well.

Building sustainable data leads in product launches

As launches become more complex, companies are looking towards strategic questions and specific launch and market insight requirements to build sustainable data leads in product launches. In addition to the need for customisation, and thus the need to first understand each market and its characteristics fully, there are multiple other obstacles to tackling emerging markets. These include things like poor healthcare infrastructure, limited public funding, minimal or no intellectual property protection and regulations, complex market access regulations, and local competition, often in the form of generics.

To overcome these hurdles, pharma needs to work closely with a range of local and global stakeholders. Succeeding in international markets has been a challenging undertaking for multinational pharma companies, but those that adapt their end-to-end model for emerging markets could well thrive.

To capture opportunities for growth in these markets, multinationals must be prepared to take a long-term view, continue investing in emerging markets, and take calculated risks. To succeed in this and move on from the old “go and grow” mind-set, they need to (1) define clear long-term strategic objectives for emerging markets, (2) adapt the business model to the nature of emerging markets, and (3) build an agile organisation tailored to emerging-market needs.

Market analogues versus proxy markets in smaller international countries

With pharmaceutical market research being subjected to ever-tighter budgets and timelines, marketers and managers alike are increasingly tasked with deciding which markets will be most relevant to their business and yield the greatest return on investment. As conducting market research in all markets of interest is rarely a viable option, country archetypes (i.e., countries which are like one another) are a hot topic. Specifically, one might want to identify markets within a region to conduct research in and use as a proxy to understand other markets. How well this works depends on the extent to which markets can act as effective proxies for one another to meet the project objectives:

• If you need to explore emotional aspects of patient attitudes and behaviour, it is probably reasonable to use proxies, as long as the markets have similar lifestyles and consumption habits.
• For branding and communication testing, reactions from health care professionals across the region may be similar, although there is a need to consider language (in terms of messaging).
• For projects where you are looking to increase market understanding or evaluating more tactical aspects of a launch, proxies are advised against due to the diversity of health care systems within each region.
• Assuming it is reasonable to use proxy markets based on the project objectives, consider emerging markets in tiers based on size. The number of middle classes within a market is closely linked to pharma market size and opportunity.
• Within each tier of markets, there are a number of secondary considerations, including: timing and cost-effectiveness; size of market; internal strategic importance of market; client infrastructure within market; language and culture; and political stability.

Some of the practices which have helped pharmaceutical firms to emerge successful have been noted as below:

Think global, go local.

• It needs to be kept in mind that the needs and regulations of emerging markets differ not only between countries, but also between regions, including between urban and rural areas. A strategy that works in rural Brazil will not necessarily work in urban cities in the same country and can likely also not be directly translated to most rural areas in India or Mexico. That said, customer clusters based on common demographic features and health needs can be identified both within and between regions and will help when designing market access or marketing strategies.

Local market trends to be prioritised when gathering market data

• Gaining insights into the current and anticipated future market trends is key to navigating any emerging market. This includes gathering insights on things such as local healthcare access, care paths, reimbursement, and funding (including for both original and generic products), health policies, market demands, the competitive landscape, and the data requirements for market access. This can be done on a large scale by analysing quantitative data from similar markets and/or by collecting qualitative insights directly from local healthcare stakeholders, such as physicians, payers, and patients. For the latter approach, digital technologies such as online advisory boards and virtual collaboration tools can be leveraged to streamline the progress.

Standard skeleton approach, yet flexible

• Currently, country- and region-specific regulatory and submission requirements vary, and there are limited enforcement resources. This can lead to long delays in getting approval for a product. Hence, as one of the first steps to developing a successful strategy for navigating emerging markets, a “standardised” approach for navigating foreign rules and regulations is needed. However, at the same time, this approach must be able to account for the variability in national or regional regulatory requirements and market demands. Although regulations vary between markets, there are also common steps for all regions and products. By understanding which points will vary and which are commonalities, companies can plan their timelines and processes accordingly. Establishing a harmonised approach will no doubt be difficult, but is by no means impossible.

Resource allocation and budgeting

• When entering a new emerging market, many pharmaceutical companies choose to partner with a local third-party or business partner familiar with the current regulatory and reimbursement landscape. This can be done for specific phases or for the whole process. Although this will require substantial upfront costs, the time-saving of such a partnership often proves well worth the investments. Related to this, and just like it is important for companies to create a single, coherent strategy - rather than trying to coordinate multiple strategies - there is likewise a need to centralise the company’s resource allocation to avoid duplication of efforts and partnerships.

Conclusion

Market research and forecasting are key pillars of any pharmaceutical industry. They become even more important when considered on an international scale. There is no one size fits all approach in this case. Generally speaking, a pharmaceutical market research and forecast needs to model both a disease and a healthcare system, and the key to doing this well is using the available data to reflect this complexity in a way that supports effective decision-making. There is a lot of data involved, but for that data to be valuable, it is important to consider how it is used, integrated, and delivered. Making the right decisions with the right information and insights will always be key for any business, and the challenge is to bring all these different elements together.

The integration of these concepts – diverse decision-makers, sophisticated methods, broad relevance, and strategic application – creates tremendous value and competitive advantage for an organisation. To be successful, a pharmaceutical organisation needs to bring a holistic perspective in not only driving efficiencies, but gaining trust in the local market to establish themselves. After all, the product is going to a patient and a patient is a life.