Healthcare Need & Commercial Opportunity

Emerging Markets

MeTA

Need

State of the art care for the few?

Basic care for everyone?

Quality essential care for everyone?

MeTA

Needs

BRICs– Diabetes, cardiovascualar, anti infectives, vaccines

Developing World– Vitamin A, parasite control, malaria, insecticides,

reproductive health

MeTA

The Objective

Equitable access– Social cohesion

Affordable care– Appropriate price and cost

Sustainability– Balance between best care for all and efficient optimisation

of care

MeTA

Healthcare System Design

Complex systems in government hands– Efficient?– Cost effective?

Role of the Private Sector– Cost efficiency– Allocation of resources– Insurance model

MeTA

Commercial Opportunity

IMS Health Emerging Markets Forecast– 12% growth– By 2020 30% of Global Pharma Sales– 50% of Global Pharma Sales Growth– China drug spend $15 per person per year, US $950

Global Pharma Sales Growth Forecasts

MeTA

Recent Developments

Big Pharma looking for growth– GSK new senior Executive– Pfizer major part of new strategy– Sanofi new markets for ex branded drugs

J&J referenced need for– Emerging markets appropriate products

MeTA

Issues

Access

Reimbursement

IP respect

Corruption

MeTA

Access

Marginal price should equal Margin willingness to pay, but– In different countries willingness to pay is dramatically

different– Universal Global Pricing denies access to enormous

numbers of patients Should there be Tiered Pricing?

ProducerRevenue

Price

Quantity

Demand Curve

Efficiency Loss

Price

Quantity

Demand Curve

Efficiency Loss

ProducerRevenue

Current drug access

No/limited access

People

Price

Access?

MeTA

Reimbursement

Reimbursement system will determine access and cost parameters

Fundamental problem with buyer knowledge in healthcare markets

Managed Care as the informed pricing agent Government buyers e.g. UK’s not so nice NICE

MeTA

IP

Lack of IP enforcement– IP underpins the innovation model– Investment is unattractive– Multinationals may not participate– R&D cross fertilisation is inhibited

MeTA

Corruption

Negative relationship between economic development and corruption

Positive relationship between multinational penetration and lower corruption

High human cost of fake drugs– 30% of drugs in government hospitals in India are

counterfeit, 60% of which have no active ingredient

MeTA

Other Opportunties

Outsourcing R&D and Manufacturing– well underway

Services Offshoring R&D internalisation

– The long game Medical Tourism

– $160bn market by 2012 per The Economist