The key emerging markets targeted by big players in the pharmaceutical space (aka "Big Pharma") include China, Russia, Brazil, Mexico, Turkey, Korea and India.
Emerging markets represent significant commercial potential thanks to increased demand for medicines. Factors like increases in chronic diseases, population growth, government initiatives for healthcare, increasing use of generics and increasing prosperity are expected to drive growth in emerging markets.
The US and European markets are turning out to be relatively less attractive due to the impact of the health care legislation in the former and austerity measures in the latter.
According to data provided by the IMS Institute, spending on medicines in emerging markets will double to $285-$315 billion in the next five years from $151 billion in 2010, driven by strong economic growth coupled with endeavors of governments to expand access to healthcare. This will catapult "pharmerging" markets to the second position by 2015 in terms of spending on medicines.
Generic Threat? Emerging Markets to the Rescue
Since most of the Big Pharma players are likely to suffer significant losses in revenues following the genericization of key products, they are banking on growth in emerging markets to mitigate their losses.
With blockbuster drugs such as Pfizer's Lipitor (anti-cholesterol) and Eli Lilly's Zyprexa (schizophrenia and bipolar disorder) already off-patent in the US and other blockbuster drugs such as Bristol-Myers/Sanofi's blood thinner Plavix, Forest Laboratories' (NYSE: FRX) Lexapro (anti-depressant) expected to follow suit shortly, sales of branded drugs in the US and EU are likely to suffer significantly in the coming years. Consequently, growth in emerging markets could help stabilize the core business during the industry's patent cliff in the 2010-15
|SOURCE Zacks Investment Research, Inc.|
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