Making A Mark In Emerging Markets

Q. What do emerging markets offer pharma manufacturers and what must manufacturers do to make the most of the opportunities present in these regions?

Emerging markets, especially those in Asia such as China and India, offer pharma companies a unique growth opportunity during the coming 20 years. However, companies face the difficulty of applying a well-adapted strategy to these markets and maintaining it long term.

Imposing Western business models on emerging markets is not the proper answer because so many things are different, including culture, speed of action (very fast in Asia) and the landscape, which can change quickly in terms of regulations, government, competition and clients. A second big mistake to avoid is to consider Asia as one homogenous market. Each country needs a special set of tailored actions and strategies. China and India, for example, are very different environments for pharmaceutical manufacturing.

Marc Prieur

To be successful in emerging markets, pharma companies should capitalise on their existing strengths and know how to fill any gaps in the new environment. However, it is a must to be "local" with production, R&D and sales and marketing forces. It is also important to analyse local market needs and existing competition, and support the strategy with a local team. Building any industrial footprint in a new market requires a strong local team, which can take years to establish, particularly in countries where staff turn over tends to be high.

Q. What were the challenges in China?

The main challenges were the organisational and administrative hurdles that needed to be overcome to create a strong Chinese team. This included developing appropriate skills such as molding engineers, sales persons with an international mindset and good command of the English language, and production managers that could use modern techniques, understand the concept of lean manufacturing and obtain a license to manufacture drug delivery devices for the Chinese pharmaceutical market. In recent years, the requirements from the Chinese FDA (SFDA) have increased drastically, bringing the level of quality and compliance closer to that of Europe and the US.

Q. What progress has your company made in the emerging markets and what have been the main challenges?

Aptar Pharma was the first foreign drug delivery device company to obtain an SFDA license to manufacture in China. Since then, we have continued to develop our Suzhou site by expanding local molding and assembly capacities, and adding new product lines that serve China and other Asian countries.

In India, we established our presence in 1999, and have been growing it ever since. Our strategy in these markets is long term so we concentrate on growing progressively. The main challenge was to respond to the needs of clients involved in generic drug manufacturing, who wanted to target both local markets and the more heavily regulated markets of the EU and the US. The challenge here was to combine high quality and performance with affordable prices. The other hurdle for our company was to culturally adapt to India's way of doing business, which we achieved by using a local Indian team.

Q. How do China and India compare against one another in terms of opportunities and challenges for pharmaceutical investment?

China is a large country with an immense domestic potential for pharma, particularly in light of the government's multi-year spending plan on healthcare, which began in 2008. Right now, however, sprays and aerosols are still underprescribed and not up to the normal level of use versus the prevalence of allergic rhinitis and asthma/chronic obstructive pulmonary diseases. China only has a few pharma companies that manufacture pressurised metereddose inhalers and prescription nasal sprays, and most are only focused on the domestic market. India, on the other hand, is the land of generics. Many of these companies cater to the domestic market, but they also export a lot to more developed markets. Both countries offer opportunities, but regulatory compliance is more difficult to manage in China than India. On the other hand, however, establishing industrial activity in China is easier than in India in terms of infrastructure and government help. On another note, the language barrier is also something to consider. India tends to speak English, which eases communication and business, whereas an interpreter is be a must in China.

Both markets offer opportunities and challenges, but research into both, prior to investment, is a necessity.

Marc Prieur, President Asia at Aptar Pharma offers some insights into experiences in India and China, and explains how the company has made its mark in these countries.