Japan pharma: post-quake analysis
Recent expansion into international markets and the outsourcing of production to networks of external vendors spared Japanese drugmakers from major earthquake-inflicted disaster, writes Ian Haydock.
Even Hollywood couldn't come up with a disaster scenario like this. One of the biggest earthquakes in history spawns a monster tsunami that wipes out whole towns and wrecks a major nuclear power station. Unfortunately the calamitous triple whammy to hit Northeast Japan on 11 March was all too real and was not over after two hours sitting in a cinema.
In trying to assess the likely impact on Japanese business, there are no easy answers and few hard figures. But a look at some of the information suggests that there will be few significant long-term effects on either the Japanese industry or on multinationals operating in Japan. Given that the total economic impact of the disaster has been estimated at 3-5% of Japan's GDP, or $193-303 billion, this may seem hard to believe. But the initial signs are that the sector is coping well and can absorb any losses.
Major Japanese players such as Takeda and Eisai are much less reliant on their home market than they used to be, following the drive to build up their international presence over the past decade. For these two particular firms, Japan now accounts for less than half of their total prescription sales.
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Five ways to get it right in India
Unsure how to drive growth out of a market as diverse as India? Anju Ghangurde outlines five steps to success for foreign pharma.
Transposing Western pricing models and margin expectations to India will not work, in particular because a large proportion of Indians lack adequate health insurance and pay for healthcare out-of-pocket. The most successful Indian subsidiaries of multinationals price products based on purchasing power, rather than aligning them with prices in the country of origin.
The classic example is Merck & Co's antidiabetic Januvia; MSD India, the company's Indian subsidiary, markets the product at one-fifth of the US price, in spite of a valid product patent in India. Japan's Eisai has similarly developed an affordable pricing policy; since 2005, it has been supplying India with Aricept and Pariet at "affordable prices" commensurate with the country's social, economic and healthcare environment.
Other multinationals have used multiple approaches. Pfizer has developed a patient assistance programme, making its anticancer Sutent available to all patients, irrespective of income. It offers eligible patients either partial or fully-subsidised treatment, based on medical and socio-economic criteria. Sutent is provided free to Indian patients who are below the poverty line. In addition, tiered pricing for different income groups improves access.
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For more data and analysis on India, visit www.scripintelligence.com/india
Asian-flavoured pharma deals
Over the past year, companies from China, India, Japan and South Korea dominated licensing activity in the APAC region, as might be expected given the sizes of their pharmaceutical markets and growth prospects, write Patricia Giglio and Dr Brian Bialkowski.
At 33%, the proportion of total APAC product deals accounted for by drug licensing and development agreements was higher than the figures for US and European counterparts, at 23% and 25%, respectively.
The number of Asian transactions is on the rise compared with the previous year. In particular, Indian companies showed a marked increase in licensing activity, signing 17 deals, up 50%. This is a sign that Indian companies are increasingly using business development to support the strong R&D activity that is being carried out in the region.
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