Merck tailors emerging market strategies
By 2013, Merck & Co wants the leading emerging markets to account for a quarter of its revenues, representing a 50% hike from 2010. Dr Merv Turner explains to Mike Ward how the company, currently ranked fifth in emerging markets, plans to hit such an ambitious target.
A common theme among pharmaceutical futurologists is the growing importance of emerging markets. Indeed, while growth in the traditionally lucrative markets of North America and Western Europe slowly grinds to a halt, and in some cases goes into reverse, pharmaceutical sales in emerging markets – led by China – are set to achieve attractive rates of growth. Not surprisingly the world's leading pharma companies are all paying attention.
"We've made a clear commitment that we aim to generate, by 2013, 25% of our revenue from the emerging markets of Brazil, Russia, India, China, South Korea, Turkey and Mexico," Dr Turner told Scrip. In 2010, these same markets accounted for about 17% of Merck's global sales of $45.9 billion.
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Abbott in India: bullish, yet humble
One year after acquiring Piramal's Domestic Formulations business in a deal that made it India's largest pharmaceutical player, Abbott remains confident about its growth prospects in India, where it hopes to be generating $2.5 billion in sales by 2020. But facing fierce competition from domestic firms, Abbott isn't about to get complacent, Michael Warmuth tells Pete Chan.
Michael Warmuth is a senior manager for Chicago-headquartered Abbott, but his turf is distinctly non-American. For the past year, the Basel-based executive has led Abbott's Established Products Division (EPD), a $5 billion business unit formed in May 2010 to sell the company's branded generics outside the US. The EPD has a particular focus on emerging markets, which account for about 20% of Abbott's pharmaceutical sales. Like many leading healthcare companies, Abbott has noticed that middle-class patients in emerging markets tend to favour company and drug names that they recognise. They attach such importance to factors like product quality and security of the supply chain that they will pay a premium price for a branded generic compared with a pure generic. Confident in its "brand equity", Abbott wants to leverage its branded generics portfolio to drive business from the world's high-growth economies.
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Dr Reddy's ready to enter US generics big league
India's third-largest domestic pharma company is set for a significant scale-up of its US operations, including developing partnerships and a possible rebuild of its research presence in this critical market. Mindful of the limitations of organic growth, a large acquisition may also be on the cards, GV Prasad tells Anju Ghangurde.
Like many companies in emerging markets, Dr Reddy's Laboratories' growth, in parts, mirrors Jonathan Livingston Seagull's fascinating journey of flight, replete with its own share of struggle, setbacks, successes – and the desire to soar higher.
Little wonder that the Indian-headquartered company's vice-chairman and CEO, GV Prasad – who believes that biosimilars, a scale-up of the US business, a differentiated product approach in Germany, and partnerships with both Indian and foreign firms will help drive growth – was an avid bird-watcher in his youth.
Mr Prasad, a chemical engineer who graduated from the Illinois Institute of Technology in Chicago, believes "there is a lot to learn from nature", referring to his childhood passion and some land he owns near Hyderabad, featuring a lake where birds can be seen, especially in winter. Just as birds migrate to warmer climes with the approach of winter, Dr Reddy's is positioning itself for the onset of 'large value' patent expiries in biologics, alongside the projected decline of the small molecules pipeline around 2013.
"We are looking at biosimilars as a driver of growth beyond 2014 onwards, depending on patent expiries both in emerging and regulated markets. We hope to be among the first few companies [there]," Mr Prasad told Scrip in an exclusive interview.
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Related links:
India's top 10 pharma companies
India's top 10 CMOs
For more data and analysis on India, visit www.scripintelligence.com/india
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Sponsored by
Aptalis leverages strategic partnerships
Kevin Ostrander discusses the current role of formulation and licensing partnerships in the pharma industry.
 Q: Why does pharma need drug
delivery enhanced products?
A: Difficult to formulate molecules
and a decline of New Chemical
Entities (NCEs) for new therapies
have resulted in pipeline gaps,
weakened product portfolios and
a challenging R&D environment.
Influencing factors include
lengthened discovery timelines
requiring large investment
coupled with high/risk reward
ratios associated with the drug
development process.
Additionally, stricter requirements
to gain both regulatory approval and insurance coverage on existing
molecules requires demonstration of improved clinical outcomes
such as increased efficacy and/or reduced side effects.
In addition to these macro trends there is the steady growth of
the oral drug delivery segment, which remains the largest segment
of the overall drug delivery market with more than 50% market
share. It is currently valued by industry sources at $49 billion and is
expected to continue to grow to $92 billion by 2016. This is driven
by the continued preference of oral drug forms by both patients and
clinicians due to their low cost, their ease of administration and the
low level of side effects associated with oral drugs in comparison to
other more invasive delivery routes.
Q: What is the expanded role for drug delivery solutions in this
current environment?
A: Traditionally, patent expirations have led pharmaceutical
companies to seek adoption of new drug delivery systems for
marketed products, potentially adding years of additional patent
protection and enhanced market longevity. Today, however, drug
delivery technologies are leveraged in many stages of the product
life cycle. For example, pharmaceutical companies use drug
delivery technologies to optimize returns on R&D investment
by reformulating existing products and/or creating effective
formulations for promising, but difficult to deliver molecules that
may have been stalled in clinical development. Early application of
drug technologies can strengthen market adoption by creating a more
differentiated, attractive product upon market entry. This type of
approach adds further market protection to the brand by establishing
a broader IP estate to challenge generic entry through the addition of
new patentable material and extended patent expiry dating.
By moving away from the traditional business model that has
shaped the pharmaceutical industry in the past, pharmaceutical
companies can look to drug delivery companies as full strategic
partners. These partnerships will enable increased R&D productivity,
improved drugs, extension of product life cycles and strengthened
offerings resulting in patient benefits that reshape health care.
| Aptalis Pharmaceutical Technologies... |
Develops and manufactures enhanced pharmaceutical and
biopharmaceutical oral products for partners based on its
proprietary formulation technologies |
| Offers a broad and validated portfolio of technologies including
bioavailability enhancement, customized drug release and
taste-masking |
| Provides resources for both product co-development and license/
commercial supply agreements |
| Utilizes its technologies in formulations across a range of
therapies, including GI, cardiovascular, pain, nutrition, respiratory
and CNS |
| Generates success including development of 7 FDA-approved
products over the last 10 years |
| Offers global capabilities including integrated manufacturing and
R&D facilities in the US and Europe. |
| www.AptalisPharmaTech.com |
Q: Which of your portfolio technologies will realize the greatest
growth in addressing unmet medical needs in Asia’s emerging
markets?
A: According to GBI Research, the oral drug delivery market
has seen a significant increase in licensing and the partnership
deals over the last few years with a focus on the development of
controlled release drug forms. This rise can be linked with the
pharmaceutical companies’ growing interest in drug delivery
systems as a key product lifecycle management tool and as a
strategy to increase patient acceptance and compliance. Sustained
release (SR) products have seen a constant demand during
2007-2009 and are expected to grow to more than $42 billion by
2015 due to the launch of a number of SR oral drugs in various
therapeutic areas.
A case in point, Aptalis Pharmaceutical Technologies created a
once-daily formulation of cyclobenzaprine, a muscle relaxant that
had been on the market for several years, to reduce the need for
frequent daily dosing. The result was AMRIX® (Cyclobenzaprine
Hydrochloride Extended-Release Capsules), an FDA-approved
product that is marketed in the U.S. by Cephalon, designed to
provide optimal drug-release profiles with the convenience of
once-daily administration. The new extended release (ER) drug
formulation reduces the need for patients to take multiple daily
doses of cyclobenzaprine, and improves the safety profile and
tolerability of the drug by reducing the levels of somnolence
associated with the standard immediate release (IR) drug
formulation. This created a successful product with rapid sales
uptake in a generic market, with IMS recording sales of $119 million
for calendar year 2009. Today, the product is licensed in more
than 20 countries around the world including South Korea, China,
Turkey, Israel, South Africa, Russia, Pakistan and South America. |
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