Here's a piece from the PharmaGossip blog authored by Hester Plumridge that describes troubles Big Pharma is still likely to encounter if it relies solely on sales from emerging markets to fill its revenue holes.
The piece makes several salient points:
- Many large pharma companies already have upt to 25% of their sales coming from emerging markets
- Growing sales do not equate with growing profits. Operating profits for many of the big guys in this region average 25-30% lower.
- Margins are lower in these regions due to a variety of factors - lower government spending, necessity of having to use a direct sales force (i.e. bans on ad use), greater generic & local competition.
- Language and regulator complexities
As noted in the piece, nothing about selling more in an emerging region fixes a broken pipeline nor adds innovation. The sentiments expressed in this post are very similar to ones I reblogged from PharmaTech Talk on May 12th here.
Again, it is clear tha these markets will be important to future growth in the World pharmaceutical industry, but it is also increasingly likely that they will NOT make up for all the deficits that many companies in the industry have in their portfolios/models.
Companies will still need to figure out how to bring innovative (value delivering) products to market regularly.
Posted by Bruce Lehr May 26th 2010.