Vasant (Vas) Narasimhan, CEO of Novartis has recently announced that the Swiss pharma giant wants to turn India into its hub for innovation, with everything from artificial intelligence and data science and basic science research being carried out from this world’s fastest-growing economy. Currently, India, with as many as 8,300 associates, is one of the key global development sites for this $217 billion worth pure-play innovator which had 10 positive phase 3 readouts last year.

Like Novartis, top pharma and biopharma companies are increasingly shifting their focus to emerging pharma markets such as India with a revived interest charting out strategies for these dynamic economies as growth in their traditional strongholds stalls.

IQVIA data from the European Federation of Pharmaceutical Industries and Associations (EFPIA) shows between 2016 and 2021 the Brazilian, Chinese, and Indian markets grew by 11.7 percent, 6.7 percent, and 11.8 percent respectively in comparison with an average market growth of 5.8 percent for the top 5 EU markets and 5.6 percent for the U.S. market.

Sector analysts expect the global pharmaceutical industry to grow at just 2-3 percent annually at net prices; that is just half the rate of growth the industry experienced in the previous five-year period.

Increasing pressures on their top and bottom lines compel pharma executives to make fundamental changes in their business models.

Developing markets are back on pharma companies’ priority list. The longstanding skepticism about the future of their business models in developing countries gives way to confidence as the emerging economies move from the periphery to the center of pharmaceutical industry growth, say observers.

Besides changing demographics and economies, shifts in healthcare spending, treatment development, and regulations are among the key contributors that make the developing markets critical locations in the global pharmaceutical landscape.

As these markets evolve, they offer significant opportunities that require dynamic strategies suitable for each market.

Unique strategies

The pharma companies, on the other hand, are tailoring strategies to cater to the local needs of the promising emerging markets that are experiencing faster growth than the mature markets.

“We recognize that each country is unique, with its own set of market needs and challenges,” says Dr. Harald Nusser, head of global health and health equity, Merck KGaA.

“Our low and middle-income countries (LMICs) access strategy takes a holistic ‘triple A’ framework to tailor our approach: by looking at the factors affecting the availability, accessibility, and affordability of our portfolio, we can better understand how to maximize our impact in these dynamic markets.”

Each investment decision is different, explains Dr. Nusser, and foremost depends on the medical need. Business success eventually also hinges on the capacity of a health system and its willingness to pay for the value a pharmacological intervention yields to society. And here health priorities differ by country.

Every two minutes a child under the age of five dies of diarrhea, of malaria and of pneumonia­—preventable and treatable conditions. Every week, more than 4,000 adolescent girls and young women get newly infected with HIV in sub-Saharan Africa alone. Hence, it is clear that priorities are not the same. Investments in service delivery for primary healthcare and prevention therefore are important. According to Dr. Nusser, bending the curve of life with the latest high-tech innovation for the few may at times be less important in most parts of the world than the right to health and access to clean water for the many.

“While we recognize that the disease burden and demographics of the emerging markets are changing, we remain confident that our portfolio and pipeline will continue to address a significant proportion of patients in LMICs,” affirms Dr. Nusser.

Merck KGaA has committed to increasing the number of patients treated with its healthcare portfolio from over 55 million per year in 2022 to over 80 million per year by 2030 under the LMIC strategy, in addition to the over 90 million patients per year to be reached with its established product and innovation for schistosomiasis.

The German major is working to eliminate schistosomiasis, which is having a devastating impact mostly in African countries, in partnership with the WHO.

The company continues to develop new health solutions for schistosomiasis and malaria, and work with stakeholders to realize sustainable financing mechanisms to support these innovations, says Dr. Nusser.

Merck KGaA ranks fifth among the 20 largest pharma companies worldwide based on initiatives to advance global access to medicines in LMICs, improving from eighth place in the 2021 ATM Index.

Similarly, Bristol Myers Squibb (BMS) announced a new ten-year strategy in May which involves several tailored approaches to increase the affordability and availability of BMS medicines in LMICs.

Called ASPIRE, which stands for Accessibility, Sustainability, Patient-centric, Impact, Responsibility and Equity, the strategy supports BMS’ goal to reach more than 200,000 patients in LMICs by 2033.

ASPIRE ensures that 100% of its marketed products are supported by access plans.

BMS has also introduced local brands of many of its medicines to address affordability issues, expand access and help reduce the time lag between availability in higher-income countries and lower-income countries.

According to the company, ASPIRE strategy includes creating new access pathways for BMS’ medicines by launching Emerging Market Brands (EMBs), which use a tiered pricing approach that reflects each country’s ability to pay; collaborating with the Access to Oncology Medicines (ATOM) coalition to increase access to cancer medicines in LMICs; enabling access with BMS-IMAP (Innovative Medicine Access Program) and partnering with healthcare providers and healthcare facilities in underserved countries to tackle systemic barriers and improve the quality of care.

Collaboration is key

In early July, AstraZeneca India announced an investment of $30 million to expand its Global Innovation and Technology Center (GITC) in Chennai, India, which includes close to 1,300 roles focused on driving innovation, enhancing efficacy and streamlining operations across the company globally.

India’s rich talent pool and dynamic ecosystem for digital advancements make it a pivotal hub for AstraZeneca’s global operations, said Dr. Sanjeev Panchal, country president and managing director, AstraZeneca India in a statement.

A couple of months ago, Dr. Panchal announced the company’s plans to launch at least fifteen new medicines by 2030 across therapy areas.

AstraZeneca’s strategy for driving innovation and growth in specialized areas is tailored to the evolving needs of the Indian market. As a global science-led biopharmaceutical company, AstraZeneca prioritizes collaboration within and outside the industry, engaging in co-creation to develop innovative solutions. This collaborative approach ensures the accessibility and affordability of the innovations, he said.

Collaborations and partnerships are among the major routes pharma firms explore while planning to expand into emerging markets. Building partnerships with local manufacturers, governments, NGOs and other industry stakeholders helps pharma companies to understand the market better and establish strong distribution channels.

For example, Merck & Co entered into a licensing pact with Indonesia’s Biofarma in December 2022 to produce the MSD’s tetravalent HPV vaccine locally.

Cervical cancer is the second most frequent cancer among women in Indonesia and the second most chronic cancer among women between 15 and 44 years of age, according to Indonesia’s HPV Information Center.

The pact was part of the country’s efforts to launch a national HPV immunization program in the following year. MSD and Biofarma have had a partnership since 2016, reports show.

It was around that time that AstraZeneca entered a strategic partnership with local company G42 Healthcare aimed to boost pharmaceutical production in Abu Dhabi.

Sanofi’s tie-up with Chinese company Innovent Biologics to develop and commercialize innovative treatments for patients with hard-to-treat cancers in China in 2022; Roche’s strategic collaboration with Hong Kong Science and Technology Parks (HKSTP) to support start-ups and promote technology and data sharing; and Mexico’s m8 Pharmaceuticals’ exclusive promotion and distribution agreement with Janssen Cilag S.A de C.V.(Johnson & Johnson Innovative Medicine) to commercialize and promote a portfolio of selected central nervous system brands in the Mexican market (2020) are among other instances of such successful collaborations.

Critical locations

Emerging and developing markets across Asia, Africa, and Latin America are home to 6.82 billion people as of 2024, as per IMF data.

The expanding middle class in these markets which is able to afford health care services and treatments presents a growing customer base for seeking pharma companies.

As much as 75% of the 537 million adults living with diabetes live in LMICs, according to Global Diabetes Industry Overview 2023 by Aging Analytics Agency. Also, two-thirds of the 1.28 billion adults with hypertension live in developing countries and emerging markets, according to a 2023 report by WHO. The numbers can only go up as more people settle into middle-class lifestyles.

Reports indicate that the burden of infectious diseases and nutritional disorders is gradually being replaced by chronic non-communicable diseases (NCDs) in developing economies.

“We recognize the rising burden of NCDs in emerging markets,” comments Dr. Nusser. As much as 86% of premature deaths from NCDs occur in LMICs. Many patients’ conditions are not diagnosed and if they are, the link to care lacks effectiveness.

As an example, Dr. Nusser cites the burden of thyroid diseases. While over 200 million people are affected worldwide with thyroid problems, gaps remain in the accessibility of diagnostics and treatment. Merck KGaA sees the opportunity to work together with local stakeholders in these maturing health systems to address the barriers to health care and improve treatment outcomes for patients.

Increasing healthcare budgets, improving healthcare infrastructure, and expanding access to essential medicines by governments in many emerging markets provide a conducive environment for pharma firms to work with governments.   

Some emerging economies are reportedly working on their regulatory frameworks as well as their intellectual property rights laws to keep them updated with internationally accepted practices. These efforts are expected to ease up some major entry barriers to these markets.

Lower costs, ethnic and diverse patient populations, and faster patient recruitment are some of the unique advantages developing countries offer for clinical trials.

“It is important to note the increasing and increased capacity in many countries to be part of clinical research. That will also speed up the availability of new medicines,” comments Dr. Nussar.

Complex challenges

Even as emerging markets represent a growing share of global healthcare spending having a significant proportion of the world’s population and trade, navigating the complex landscape of these markets companies encounter many challenges. Unlike advanced economies the challenges in emerging markets are different.

Apart from regulatory complexities, IP and ethical issues, high political instability, etc, one of the most significant challenges companies are facing in emerging economies is how to expand the pharmaceutical market ensuring equitable access to therapies across diverse socioeconomic segments. Higher access to the population will depend on effective and differential pricing as well as partnerships with local companies in manufacturing and distribution strategies.

“Indeed, opportunities for greater accessibility and affordability can rarely be reaped through one company alone,” points out Dr. Nusser of Merck KGaA.

Given the number of households that need to pay out of pocket for their healthcare indicates, cross-sector collaboration is needed. Studies have shown that the poorest pay the most, even in absolute terms for an essential medicine, and that was in a situation when the usual questions around regulatory, IP, and price had been addressed appropriately before. Starting with a situational analysis, very much like prior to a launch in a high-income market, data generation, local partnerships, and fit-for-purpose commercial approaches are paramount for achieving desired health outcomes, in any market, he adds.