The next billion patients
Until recently, multinational pharmaceutical and life sciences companies have focused their clinical research efforts/clinical development programs almost exclusively on mature markets: North America, Europe and Japan in particular. However, rapid changes are underway in emerging markets.
Firstly, we are seeing an expanding middle class. Virtually every emerging market, from Indonesia to Mexico and from China to Brazil, is witnessing an increase in the proportion of patients who now qualify as middle class, and wealth is increasing commensurately, enabling more individuals to afford essential care or purchase private health insurance. This growth is set to continue. In parallel, we are seeing an increased focus among emerging market governments on public healthcare reform: expanding their populations’ access to medicines by establishing universal healthcare coverage (such as JKN in Indonesia and Seguro Popular in Mexico) and deepening access by expanding formularies to include more drugs (despite these often being set in the context of aggressive cost containment measures).
Greater purchasing power and improved market access are growing the opportunity for innovative medicines in these markets. The vast populations of many emerging markets mean they constitute a high proportion of the world’s "next billion patients", which pharma simply cannot afford to overlook.
The rise of chronic diseases
So what are the healthcare needs of these "next billion patients"? Rising wealth is not only linked to affordability for medicines, it is also associated with changing lifestyles. As people in emerging markets flock to urban areas, we are seeing an explosion in the prevalence of "diseases of affluence", i.e. obesity, hypertension, diabetes – chronic conditions linked to sedentary lifestyles and the ‘Westernization’ of diets that come hand-in-hand with city living. Emerging markets’ demand for effective long-term medications for these chronic conditions is therefore growing, with the fastest rate of growth among those who have the ability to afford premium priced products.
Dual disease burden
At the same time, communicable diseases have yet to be eradicated in emerging markets. The rapid urbanization described above is also linked to the spread of infectious diseases as newly-formed megacities facilitate the incubation of new epidemics. This means emerging markets’ healthcare systems are finding themselves increasingly grappling with keeping infectious disease outbreaks under control while also managing the onslaught of chronic diseases.
From a demand perspective, ultimately this means there is also growing need for infectious disease prevention and treatment – in the context of greater affordability to fund it.
Taking the "neglected" out of "neglected tropical diseases"
Historically, diseases that are exclusively prevalent in tropical areas (in which many emerging markets are located) have been ignored by pharma and life sciences companies. This is due to the limited potential for return on investment of developing medicines to prevent or treat them, given few people (outside of travellers to the regions) could afford to purchase them at a premium price, and the access challenges associated with public funding in resource limited settings. Hence the term "neglected tropical diseases" or NTDs.
While NTDs undoubtedly remain a significant global health challenge, we are seeing early signs that are making the development of medicines designed to combat these diseases more commercially viable. This is evident in the healthy pipeline of vaccine candidates for mosquito-borne diseases, for example. We may see a trend towards filing regulatory submissions in highly endemic, middle-income countries first, rather than going straight to the FDA (US) and EMEA (Europe) as per the typical pathway for new molecular entities.
With the era of blockbuster drugs for chronic diseases behind us, and payers in mature markets putting manufacturers under increased pricing pressure and subjecting them to increasingly stringent demands, pharma has found itself forced to focus on developing in new directions, including personalized medicine and rare diseases. With emerging markets experiencing growing purchasing power and improving access through strengthening public healthcare systems/universal healthcare coverage, NTDs prevalent in these countries also represent an increasingly enticing prospect into which R&D investment can be channelled.
There is still the need to better incentivize development of some NTDs, especially those for niche populations or restricted to resourced limited settings (looking beyond emerging markets to frontier markets). From 2000-2011, only 1% of new chemical entities approved were for neglected disease. That said, the global health community and donors are increasingly working with pharma in partnership to fight against diseases in these settings or through access-to-medicine programs. The 2016 US$5 million purchasing commitment from Gavi for Merck’s Ebola vaccine candidate represents an example of the role donors can have in ensuring future clinical development meets the needs of not only the ‘next billion patients’ but the global poor, or bottom of the pyramid. We expect such initiatives to become increasingly important going forward with pressure from the global health community (e.g. ranking their efforts in Impact Indexes) and increasing emphasis on partnership and collaborative solutions.
Competition from within
Up until now, we’ve been focusing almost exclusively on the perspective of multinational pharmaceutical companies headquartered in mature markets – North America, Europe or Japan. But increasingly we are seeing that the domestic pharmaceutical industries in major emerging markets, particularly China and Brazil, are growing into forces to be reckoned with on the global stage. Developing medicines focused on the specific needs of their local populations is understandably a key priority for these companies, and they also have a local advantage when it comes to getting their products into the domestic market. For example, China’s regulatory body (the SFDA) typically demands clinical trials to be conducted within a Chinese population – with arguments that dosing requirements may differ due to different drug metabolisms and average body mass among different ethnicities. This demand for local clinical trial data is becoming increasingly common across emerging markets, and a local presence may also be essential. The Brazilian government also has a strong emphasis on establishing technology transfers in partnership with foreign companies to move towards local production and decrease reliance on imports.
Meeting local needs
Beyond the regulations, we are well aware from our market research experience that patient and prescriber preferences for drugs frequently vary in emerging markets – we see different cultural preferences in terms of mode of administration or formulation, for example. Some countries have a stronger appetite for fixed drug combinations than others, and the perceived value assigned to clinical trial endpoints is rarely consistent and often unexpected. Understanding of these preferences and key considerations at an early stage through market research is therefore fundamental to inform drug development and clinical trial design and ultimately ensure acceptability and maximize uptake in emerging markets. And whilst global pharma is starting to recognize the importance of taking a more patient-centric approach, in emerging markets patient centricity is absolutely critical because many patients have to for their healthcare out of pocket and the lack of a formal primary care or referral system means they are the only constant in the patient journey.
Multinational companies are finding themselves needing to factor in these considerations at an increasingly early stage of their clinical development programs as the opportunity is too big to ignore – they cannot afford for conducting local clinical trials or understanding local preferences to be an afterthought in their drug development plans. No longer can they get away with just rolling out whatever tested well in mature markets. This is reflected in the trend we are seeing towards our clients including emerging markets in their early stage opportunity assessments.
In conclusion, it is vital that pharma and life science companies look to the developing world when setting out their strategic vision for the future. The different disease profiles that exist present new opportunities (to be realized either commercially as a result of increasing affluence/improving public healthcare access, or in partnership with global health donors/as part of access-to-medicines initiatives). Emerging markets also represent increasing opportunity for their chronic disease treatments as diseases once more common in the west become more prevalent. Effectively capturing this opportunity will require meeting the local clinical trial requirements, finding a way to compete or work in partnership with domestic players, and developing products that are designed with the local audience in mind.