March 2008
	GfK Latin America Summit Reveals Great Opportunity I’ve never done this before! After 35 years in pharmaceutical marketing research, I don’t get to say this very often about the use of a methodology. But I recently had the opportunity to do something I have never done before, but will certainly do again. You’ve often heard me quote from the PricewaterhouseCoopers forecast that the size of the pharmaceutical market worldwide will double by 2020 with much of this growth coming from developing countries that have generally been ignored by a pharmaceutical industry focused on the United States and G5 countries. As a result, we as an industry must learn to understand these developing countries far better than we do now if we want to turn the growing top line into growing profit. As Group Chief Executive Officer of GfK’s health care companies in the United States and recently charged with providing support to GfK’s health care research in Canada and South America as well, I decided that, given my ignorance of health care delivery and pharmaceutical marketing practices in these areas, I had best quickly get myself up to speed. To this end, I began with three key steps down a path that, I must admit, is far from its end. First, I decided to focus my attention initially on South America (which, including Central America, I refer to as Latam). My clients have shown increasing interest in Brazil and other countries in this region, Latin America is growing rapidly and there have been few requests for research in Canada. Second, I asked my friend and colleague, Jane Sarasohn–Kahn, who has tremendous expertise and research ability in the area of pharmacoeconomics, to conduct a secondary data search of what could be learned about health care in these countries. As expected, Jane came back with valuable information and profound insights that are set forth in this month’s published document for The Orange Pages. In fact, Jane’s pronouncements were sufficiently intriguing that, as I alluded to in the opening of this article, I decided to do what I had never done before: I convened a summit of GfK’s marketing research management from the major Latam countries; we met in Miami Beach during February, and for two days we discussed health care, pharmaceutical marketing and pharmaceutical marketing research. Because we did this with the participating countries collectively, we were able to discern both commonalities and differences among the countries. In no particular order, I would like to share with you some of the major findings of this summit. Later, when I have a transcript and more time to ponder the insights of this session, I’ll provide more specific information in a more organized fashion. But here are the big pieces. First, the attendees came from GfK companies that do pharmaceutical marketing research not exclusively, but as part of a mix of marketing research that includes fast-moving consumer goods, telecom, etc. In fact, they reported that little emphasis has been placed on pharmaceutical research in Latam, although the volume of business is beginning to rise significantly. According to our participants, no pharmaceutical marketing research agency dominates Latam, but the largest players include Ipsos, TNS and GfK. As Jane’s report indicated, Latam countries need to be prioritized, using a formula we will have to develop that includes population size, population wealth, generic vs. branded drug use, etc. One of the major topics we discussed is that over-the-counter products in Latam include many which are prescription products in most developed countries. To avoid the fee for a physician visit, many Latam consumers will try to treat themselves using this wide array of medications. Consumers are provided with information about these products through institutional advertisements on television and in other media. While not direct-to-consumer advertising in the U.S. sense of the term – since the product is not mentioned – institutional advertising identifies the manufacturer and condition to be treated, but not the product name. Research methodologies employed in Latam, which will be covered more extensively in other pieces we write, obviously differ significantly from those employed elsewhere in the world. The Internet, for example, is relatively unused, while telephone and face-to-face interviewing remain alive and well. Also receiving major attention were differences in Latam governments in terms of their impact on health care in general and pharmaceuticals in particular. For example, most countries are trying to increase the percentage of their population that has access to medical care. A primary way they are doing this, it should be noted, is by encouraging the use of generic products through different techniques. In some countries, for example, the government mandates that prescriptions be written for products using the generic rather than brand name of the product, thus making the pharmacist an especially important decision maker in determining what product is used to fill a prescription. In addition, it was reported that most countries offer both private and public health care systems, with significant differences in the level of participation each experiences by country. Other governmental initiatives of importance to the pharmaceutical industry were also discussed. For example, it is less than surprising that many Latam governments are attempting to increase the percentage of pharmaceuticals manufactured in their own countries, by their own companies, in comparison to the percentage imported from multinational companies. It should also be noted that the participants in our summit were anxiously anticipating a more extensive involvement in the world pharmaceutical market. Many feel they have been ignored long enough, and look forward to forces such as growing economies helping bolster their pharmaceutical marketing research practices. To conclude my initial description of major findings of this summit, let me simply say that I was greatly impressed by the differences we encountered, both between Latam countries in the aggregate and other areas of the world and among the specific countries themselves. As an industry, we had best get up to speed very quickly in terms of these differences, if we are to develop strategies and tactics responsive to this changing marketplace and others like it. I also left with the impression that a significant opportunity awaits pharmaceutical companies that do their homework on these countries and approach them correctly, and that to show up late for this party will be a strategic error of some consequence. Lastly, let me say that our GfK colleagues from Latam were extremely nice and cooperative, and that I look forward to working with them to improve health care, pharmaceutical marketing and pharmaceutical marketing research in a vast and growing area of the world to which little attention has previously been paid and where the environment is changing rapidly. Richard B. Vanderveer, Ph.D. Group Chief Executive Officer GfK U.S. Healthcare Companies