As China, India, and other developing countries have come better into focus, pharmaceuticals have started to realize the potential wealth hidden amongst these burgeoning economies. It is a stale story, re-washed and hung time and over again, that the pharma industry is stressed. Billion-dollar revenue blockbusters are in transition from going to exclusive patented positions to the common hands of generic makers. Therefore, pharma is looking at several methodologies to reinvigorate its business model—from changing pre-clinical experimental phase to acquiring thriving generic companies.
As money has flowed into the BRIC countries, a new class has started emerging—one that can afford better services in both hospital care and pharmaceutics quality. The percentage of this group with a viable purchasing power has grown (as can be also seen through other booming industries such as restaurants and retail in the same countries). And pharmas have realized this, as they sign off deals to build additional plants or better their emerging markets area. Take for example, Sanofi Aventis and the insulin factory that it bought in Russia late in 2009 to establish a stronger presence in the developing country. Furthermore, to strengthen its foothold, the French company also entered into a partnership with the Pharmapolis project – a project driven by the Russian government to create a thriving pharmaceutical hub in the country. And Pfizer, which purchased the rights to sell several Indian-made generics in Western markets.
There is sense in such investment, especially as the “power of the purse” no longer belongs in the few hands of the developed countries. Will this reinvigorate the struggling big pharmas? One can only hope but it is almost certain that it will not hurt.
