An At-a-Glance Overview of the Emerging BRIC Nations

By Steve O’Hara, Executive Vice President, and Yoko Okamoto, Vice President

If you follow the money and the leading health care marketers, the path will almost certainly take you beyond the domestic marketplace. It’s the next logical step toward innovation in an economy that rewards only the most resourceful business minds.

For leveraging your brand, the BRIC nations (Brazil, Russia, India and China) present a new horizon of possibilities. This article provides insights from GfK Healthcare’s recent webcast on the topic.

In fact, with the U.S. pharmaceutical economy shrinking and the E7 pharma markets (BRIC plus Indonesia, Mexico and Turkey) citing their optimistic growth rate projection (11.5 percent annually from 2007 to 2012), you may consider joining a number of our affiliates that have jumped on the global bandwagon.

So, where is your strategic GPS system taking you? Begin by asking yourself some important questions:

• What is the future need for your product in various countries?
• What product messaging and positioning is appropriate in each country where you want to compete?
• Do you have the necessary resources to execute against your strategies in each of these countries?

With these and other key questions in mind, examine the BRIC marketplace(s) that best meets your objectives. To that end, here is a brief snapshot of the health care dynamics in each of these countries.

Brazil at a glance Estimated pharmaceutical market: valued at US$10.9 billion as of 2006 ANVISA (Agência Nacional de Vigilância Sanitária) is the federal agency for pharmaceutical issues. The public health care system (Servico Unico de Saude, or SUS) guarantees health care for all Brazilians, with the private system covering only 20 percent of the population. Drug coverage is minimal, even among patients with private insurance. The population relies heavily on specialists and hospital-based care, with no gatekeeping by general practitioners. Not surprisingly, the country’s wealthiest are responsible for 48 percent of all branded drug purchases. Things to consider when doing research Brazilian physicians tend to be enthusiastic and that is reflected in their responses to ratings questions. Plan to conduct up to eight central location interviews per day. While all methodologies are accepted, Internet data collection may require additional field time. When to avoid conducting research February, during Carnevale. Key challenges Counterfeit drugs and compulsory licensing.

 

Russia at a glance Estimated pharmaceutical market: valued at US$8.3 billion as of 2007 Federal Oversight Services for Healthcare and Social Development (Roszdravnadzor) handles pharmaceutical and health care issues. Under Obligatory Health Insurance (OHI), health care is supposed to be free in Russia, but every hospital has its under-the-table price list. Private Health Insurances (PHIs) serve the wealthy, resident foreigners and employees of larger corporations. Things to consider when doing research Unless in-hospital, most physicians don’t stock medications; therefore, physicians should be screened based on their prescribing behaviors. Plan to conduct no more than six central location interviews per day. Online research is not yet feasible in Russia. When to avoid conducting research Summer months – Russian physicians receive 40 days’ vacation time. Key challenges Self-medication is widespread. Intellectual property protection is an issue with very little protection for patent holders.

 

India at a glance Estimated pharmaceutical market: valued at US$10.4 billion as of 2006 The Central Drug Authority (CDA) was to be modeled after the U.S. Food and Drug Administration; however, the government faces resistance from the state-level Drug Control Agencies (DCAs) that fear loss of control and revenue from pharma licensing. Ninety percent of the country has access only to the limited and low-quality public health network, with the middle-class population accounting for 75 percent of all health care spending. Drugs are sold through a highly fragmented network of licensed pharmacies, hospitals, clinics, MDs and other retail channels. Private sources and out-of-pocket payments account for 80 percent of total pharmaceutical sales. Things to consider when doing research Plan for up to five central location interviews per day. Internet data collection should be supplemented by alternative methods. When to avoid conducting research During major holidays, such as Diwali (mid-October). Key challenges Market access and counterfeit issues, highly pronounced gap in wealth.

 

China at a glance Estimated pharmaceutical market: valued at US$22.6 billion as of 2007 China’s regulatory oversight authority is the State Food and Drug Administration (SFDA). China is characterized by a total lack of a primary health care system, with government health care programs grossly underfunded. Both public and private health care programs exist and while Private Health Insurance (PHI) is a growing sector, it only covers a small proportion of the population. The majority of branded pharmaceuticals are often acquired out-of-pocket, primarily from physicians, and government reimbursable drugs are subject to tight price controls by the Chinese government. Traditional Chinese Medicine (TCM) is an important aspect of health care. Things to consider when doing research Expect to conduct approximately seven central location IDIs per day. Culturally, telephone interviewing is not a popular approach. With increasing Web access, Internet-based research with physicians is possible. Among physicians, Western medications, particularly those from the United States, Europe and Japan, are considered to be of superior quality. When to avoid conducting research During holidays and special days of observance including the Chinese New Year (typically early February) and Chinese “Golden Week” (early October). Key Challenges SFDA requires foreign manufacturers to complete a Phase III clinical trial study in China. Poorly funded health care system – generally high out-of-pocket cost for pharmaceuticals make end users reluctant.

What to look for in a research partner

Your U.S.-based research team should function as the “central command center.” Feedback from your research vendor derived from briefing, debriefing and providing post-project analysis from their local partners is critical to ensure consistency.

In-depth experience is the differentiating factor for your global research partner. Having conducted 108 global projects in 2008 – more than 50 percent of which involved at least one BRIC nation as well as additional countries, such as Korea, Turkey, Poland, Australia, Mexico, and Canada – we understand the challenges and opportunities.

It’s important you have a working knowledge of the culture and infrastructure of your research regions, from medical and reimbursement systems to treatment practices to road conditions and barriers. Something you think inconsequential may make or break your research objectives.

For example, you may think because English is spoken in India that conducting research in the language is a logical choice. But even though Indian physicians communicate well in the language, literal translations can result in misstatements and ultimately inaccurate research.

Global expertise, together with local knowledge, will get you where you want to go.

The information shared here captures some key points of interest on the BRIC nations. For more comprehensive information and data, please access GfK Healthcare’s complete BRIC webcast. (Click here to view the archived presentation.) Please note: You must enter your contact information to access the presentation.


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