– Is your strategy the right strategy?
Pharmaceutical companies and companies active in the Consumer Health and OTC industries are seeking to optimize their business strategies in order to increase company growth and revenue. Chameleon Pharma Consulting helps many business concerns develop successful international Pharma Strategies and supports new market entries in emerging markets all over the world.
Shift from a home market focus to an international focus
Due to increasing globalization, businesses are committed to adapting corporate goals and strategies to contemporary challenges and opportunities. Global market dynamics compel healthcare companies to adjust to the demands of globalization, and an international Pharma Strategy is needed to ensure growth and achieve their ambitions.
To achieve growth through international sales while simultaneously fostering current business, companies’ main focus and investment must shift from mature — frequently home — markets to international and emerging markets. Consequently, this involves a shift to adopting an international Pharma Strategy.
This change in business creates great business opportunities (see figure 1), since there are numerous emerging markets that are only beginning to grow and are most suitable for a new market entry.
Can you list the Top 10 international countries that best fit your specific products for international growth?
Mature and home markets might still be profitable, but, compared to emerging markets, price regulations are tightening and annual growth rates are not significant.
Emerging markets, on the other hand, have very promising annual growth rates and a great deal of development potential. These markets represent 70% of the world’s population and will, by 2020, account for 36% of global OTC, pharma and cosmetic spending (see figure 2).
Where you fit in the picture
As a result, many highly profitable business opportunities are being created for international companies and investors, including opportunities such as:
- Increasing healthcare expenditures
- Rising healthcare expenditures per capita
Foreign businesses and investors can take advantage of recent institutional transformations within emerging markets and of structural inefficiencies. Current investments have good prospects of turning out to be highly worthwhile and to promise long-term rewards.
It is worth noting that success in emerging markets does not require one particular approach but instead demands the adoption of numerous models and strategies most suitable for the company and the market to which it belongs.
An international pharmaceutical strategy enables companies to avoid dependence on single markets in times of globalization!
For whom should an international Pharma Strategy be of interest?
There is not only one particular, correct global Pharma Strategy available. The pharma strategy must be individually customized for each company, and there are significant differences depending on which segment you operate in, e.g. OTC, Medical Devices, Cosmetics, Pharma Rx., VMS, Consumer Health or in the alternative pharma and healthcare sectors.
Your current condition
There are, among others, two basic situations in which one might seek to implement or optimize your international Pharma Strategy:
- You are looking for an opportunity to increase your international sales and revenue!
- You seek to optimize your already-established international country structure!
Companies seeking to enter an emerging market will have good chances of success, as the markets in Russia, Ukraine, Turkey, Brazil, Mexico, Indonesia, South Korea, the Philippines, Colombia, India, Poland etc. all have great potential for the pharmaceutical industry and international investors!
Size does not always matter!
Establishing or extending global business markets is often associated with a large companies and financial strength. This perception can be misleading, since big companies generally move rather slowly due to time-consuming decision making. This generates many opportunities for mid-sized and family-owned companies, as the first competitors frequently have the best chances of success.
More and more pharmaceutical companies see value in focusing on international pharma strategies and their processes. A company must now assess:
- What are my best-fitting products?
- Which are the most promising markets?
- Why are the products and the market compatible?
5 Steps to a systematic approach to additional international success
The following will describe a systematic approach to how to enter a new emerging market.
The approach includes five substantial actions to be undertaken: international portfolio selection, country selection, market entry plan & strategy, and a regulatory and systematic local partner selection process (Figure 3).
1 International Product Portfolio
The development of a wide product portfolio as part of your international Pharma Strategy is of high importance, because it creates the opportunity to offer a large range of products across different health care systems.
It is also important to analyze markets individually and to go beyond IMS data, since such data can be quite misleading when not analyzed in depth. One market might show the most rapid growth, but issues regarding trademarks, registration rights and high market entry costs might be present.
At this stage of your international Pharma Strategy, suggested consumer prices for your products will be analyzed based on their competitiveness in potential markets and new niche sectors will be assessed based on your products.
The outcome of this first step is the identification of key products which can go international to gain further sales and why these products are suitable.
2 Country Selection
Two aspects should be kept in mind when selecting a country/countries: BRIC does not make sense for Pharma! It is necessary to identify the best-fitting markets for your specific portfolio.
Furthermore, success is not guaranteed for those who simply enter an emerging market; a new market entry often involves as many challenges as opportunities. Here are three important considerations one should keep in mind:
Knowledge of the particular market regulations
- Rules need to be known in order to establish a business and this knowledge supports the identification and determination of local partners and investors.
Consideration of the market’s incalculability
- It is critical that market knowledge and knowledge of specific market drivers is acquired, since quick and correct adaptations to changes in the market are vital.
Importance of previously gained knowledge of the particular sector
- This assists in many aspects of the integration process, e.g. finding local partners/investors and the development of a mixed marketing strategy
3 Market Entry Plan & Strategy
After conducting the selection of countries, it is advisable to work out a market entry plan & strategy in order to understand the real potential of your products in the specific market. Factors such as the cost of market entry, competitors within and outside pharmacy and your potential in the new target market will be analyzed and assessed at this point of your global Pharma Strategy (see Figure 5).
This step results in a suitable business plan that fits the plans for the product and market, as well as creating a well-tailored overall market entry plan & strategy.
Knowledge and understanding of each country’s regulatory entrance criteria are vital to have when striving to enter a market, as there are notable national differences and the success depends on the local status of your product e.g. Pharma Rx. Consumer Health, Medical Devices, Food Supplements, Cosmetics etc.
Before your product is registered in a new market, the registration criteria that have to be met mostly include a CTD-dossier. The right registration category and strategy will be identified and options for fast-track registrations and product labelling will be sought.
As we have expertise in regulatory affairs in emerging markets, we support you in questions concerning registration (see figure 6).
5 Systematic Local Partner Selection Process
As with any international market success, more than 70% of success is dependent on finding the right partner. Hence, a systematic search for the best-fitting partner will be conducted as part of your global Pharma Strategy.
Selecting the wrong partner can result in the company having to change partners within a few years of the launch, meaning that time, money and energy needs to be reinvested, particularly as retail outlets have to be convinced to sign with a product a second time around.
Dynamic and suitable local partners will not necessarily visit international trade shows and exhibitions, and too often the focus of companies seeking to expand internationally lies in how well local companies manage to present themselves externally. Frequently, the best-fitting local companies do not actively seek to shape their outward appearance to meet the foreign, Western expectations, so finding the best-fitting partner for your brand is more difficult than it at first seems.
A screening of available partners should be conducted to assess which company fits your requirements the best and vice versa. Thanks to our experience and network, you save valuable time and money involved in “getting to know meetings” in the partner selection process.
We, Chameleon Pharma Consulting, are OTC & Pharma Experts in Emerging Markets with a team that has more than twenty years of experience. We support you in all stages of the process: from the identification and assessment of your international portfolio to finding your most suitable local partner. With our longstanding network and knowledge of the industry, we can assist you in the development of your international Pharma strategy, which will save you both time and money.