Heathcare report | What comes next?

 

What do pharmaceutical marketers need to be aware of as Asia enters the post-blockbuster drug era?

 

Key factors leading to changes include increased consumer activism and awareness, increased regulatory pressures on manufacturing, licensing, sales and marketing practices, increased pressure on pricing from payers at government level, increased generic competition, expiry of blockbuster patents and a decrease in number of new product registrations.

While there is a move to raise the protection of drug patent status in some markets, economic, local and governmental pressure in many markets means that even new drugs will continue to face generic competition, so companies need to have protection strategies in place from the beginning.

Do producers and government bodies need to take a more collective approach?

More and more, manufacturers and governments need to work together to plan both the introduction of innovative medicines and also devise strategies to provide appropriate and affordable medicines to a broad range of people. This may mean compromise on both sides, with governments agreeing to the introduction of more expensive but innovative medicines in return for the provision of a range of more affordable products for mass distribution.

Given the increasingly complex regulations surrounding the licensing, sales and marketing of medicines in the region, those companies that develop constructive links with key government decision-makers and work to achieve their shared objectives are best placed to grow.

There is also a trend for the pharmaceutical industry and governments to work together to raise the level of public knowledge and understanding of diseases as well as disease prevention, resulting in a win-win situation with increased drug demand together with a reduced disease burden.

How do you see multinationals operating in markets with dominant generics and pricing restrictions?
Multinationals need to change their business models and expand their portfolios to provide both innovative premium-priced drugs and a broad portfolio of high-quality affordable medicines covering the major disease states.

By leveraging this portfolio, they can continue to retain margins on their protected products, continue to obtain revenues on patent expired products, and develop new revenue streams in high-quality low-cost generics, backed up by the quality seal of a multinational company. We may very well see (and indeed are already seeing in China) a tiered approach to the delivery of medicines with branded products and branded generics being used in first- and second-tier cities, and lower cost locally produced unbranded generics finding their predominant use in third-tier cities and villages where the ability to pay a premium for a named brand is less.

What level of digital maturity do you see in pharmaceutical firms in Asia-Pacific and do traditional sales models have a future in the digital age?

Levels vary across the region. Indeed, compared to consumer goods, the level of maturity is considerably lower because of the historical dominance of the sales representative channel. However, across the region (more so in markets that are tightening up on sales regulations and access to doctors) we see an increase in the need to use digital channels to gain access and influence prescription and dispensing behaviour.

The need to start engaging with the end-consumer, where possible, will only accelerate this behaviour. While the current digital initiatives are still relatively simple, there is a significant increase in the digital delivery of information, although this currently is predominantly 'push' in nature. The number of sophisticated compliance and integrated CRM programmes is still relatively modest compared to developed Western markets.

Given the importance of personal selling in the region, we would not anticipate the demise of the traditional sales channel, but we are already seeing a marked shift in promotional spending away from this channel into digital, educational, service and support initiatives. The continued focus of multinationals on the US Foreign Corrupt Practices Act or its international equivalents also adds pressure to move away from traditional relationships towards more formal, fully transparent processes, many of which will now fall into digital realms.

Given the way that technology is currently developing in the region, we may see a marked increase in communications aimed at smartphone users rather than the traditional web-centric Western model.