Opportunities and Challenges of "the belt and road initiative" Emerging Pharmaceutical Market

As we all know, China has become the world's second largest biomedical market. However, in recent years, under the influence of a series of policies such as consistency evaluation and volume procurement, the domestic pharmaceutical market environment has changed dramatically, and international development has become an important starting point to promote the structural adjustment of China's pharmaceutical industry and the transformation and upgrading of pharmaceutical enterprises.

In the process of internationalization, on the one hand, the growth rate of the pharmaceutical market in developed countries and regions such as Europe and the United States has slowed down, the requirements of technical regulations are strict, and it is more difficult to enter; on the other hand, the potential of emerging markets is huge. According to statistics, 80% of the growth of drug sales in the future will come from emerging markets. By 2022, emerging markets will account for 56% of the global drug market, compared with 49% in 2012. The "Belt and Road Initiative" initiative provides a historical opportunity for international cooperation between domestic enterprises and emerging market countries.

The outlook for emerging pharmaceutical markets

On October 29, the "Belt and Road" emerging pharmaceutical market seminar and the signing ceremony of the strategic cooperation framework agreement between the China Chamber of Commerce for Import and Export of Medicines and Health Products and Corey Weian (ClarivateAnalytics) were held in Beijing. At the meeting, according to Wu Fang, researcher and deputy director of the "Belt and Road" Economic and Trade Cooperation Research Institute of the Ministry of Commerce, as of the end of August 2019, 136 countries and 30 international organizations have signed 195 joint construction with China. "One Road" cooperation document. Total trade in goods between China and countries along the Belt and Road increased from US $1.04 trillion in 2013 to US $1.27 trillion in 2018, accounting for 27.4 per cent of China's total trade in goods from 25.0 per cent.

According to the China Medical Insurance Chamber of Commerce, the huge population base, huge market capacity, low drug self-sufficiency rate and high import dependence in emerging markets, coupled with the continuous upgrading of the "Belt and Road Initiative" free trade agreement, have laid a solid foundation for domestic pharmaceutical enterprises to carry out medical and health cooperation in emerging markets.

Opportunities and challenges in major emerging pharmaceutical markets

Based on the emerging market analysis provided by the global strategy team of Corey Vivian, the Cortellis global drug regulatory intelligence database (CRI), clinical trial database (CTI), incidence and prevalence database (IPD) and comprehensive intelligence database (NewportPremium) of generic drugs, bulk drugs and intermediates under Corey Vivian, the profiles and trends of major emerging pharmaceutical markets such as the Middle East and North Africa (MENA), Sub-Saharan Africa (SSA), Latin America (LATAM), and the Russian pharmaceutical market are analyzed.

MENA Pharmaceutical Market

The MENA pharmaceutical market provides a profit opportunity for pharmaceutical companies. The biopharmaceutical market in the entire region exceeds US $20 billion and is growing at an annual rate of 8%, of which patented drugs account for 65-80% of the total sales of the entire pharmaceutical market. More importantly, MENA, as a region, has everything all drugmakers want: population growth and aging; unmet medical needs; a growing middle class; the desire to obtain and be able to pay for brand and generic drugs; longer life expectancy, lower mortality, higher income levels; increased prevalence of lifestyle-related diseases, such as diabetes; opening the door to the African market......

In addition, Ms. Zeng Yali also introduced the key points to succeed in the MENA market: 1. Whether generic drugs or patented drugs, brand effect should be established; 2. Use social media and mobile applications to provide patients with helpful health tools; 3. Raise community awareness of health problems and diseases; 4. Recruit and train skilled biopharmaceutical workers (for example: provide internships, online courses and scholarships);5. Provide regional training programs and scholarships for global conferences to help doctors in the Middle East and North Africa keep up with the pace of medical development; 6. Conduct local clinical trials of approved drugs to improve doctors' awareness;

SSA Pharmaceutical Market

SSA is emerging as a major pharmaceutical market, and due to the changing economic landscape, rapid urbanization, increasing healthcare spending and investment, and the rising incidence of chronic lifestyle diseases, business opportunities in the African pharmaceutical market are expected to reach $45 billion billion by 2020. In addition, Africa's tropical climate has made the continent the largest reservoir of infectious diseases, particularly malaria, tuberculosis and acquired immunodeficiency syndrome (AIDS). As Africa increasingly adopts Western lifestyles, the burden of disease shifts to non-communicable diseases (NCDs), which is also driving demand for chronic prescription drugs.

Opportunities and challenges coexist, the diversity of SSA pharmaceutical market supervision and drug listing is facing many difficulties:

1, marketing and clinical trial approval delay. Some low-and middle-income countries (LMICs) experience delays in market access approvals, which can be 4-7 years for medical products.

The SSA consists of 48 countries. Demand tends to vary widely between LIMICs, but it is difficult for pharmaceutical companies to develop the same drugs for different countries, and there is a lack of integration of approval mechanisms between countries.

Meeting needs is challenging. The challenges in this regard are mainly reflected in differences in the maturity and consistency of regulators, and large differences between countries in terms of market size, growth trajectory, macroeconomic landscape, legal structure and political complexity.

4. Different LMICs may have different requirements for stability. SSA covers three climatic zones: II,IVa and IVb, while pharmaceutical companies may only be aware of the first climatic zone and need to re-conduct stability tests to meet different needs, while the lack of foreseeable stability test requirements delays the time to market by at least 6 months.

LATAM Pharmaceutical Market

The Latin American pharmaceutical market is analyzed in the case of three key countries, Argentina, Brazil and Mexico.

Argentina Pharmaceutical Market: Argentina is LATAM's fourth largest pharmaceutical market, and after years of strong expansion, pharmaceutical sales growth has slowed, as a result of a sharp economic slowdown, reduced real income and persistent inflation. In this context, pharmaceutical companies face a dual challenge: on the one hand, to provide consumers with affordable and effective treatments, and on the other hand, to achieve revenue and market goals.

Brazilian pharmaceutical market: Brazil is the sixth largest market in the world. Although it has a national health care program SistemaUnicodeSaude, 25% of the population choose to purchase private insurance to obtain 2. third-line medical services, which leads to a large number of patients unable to obtain ultra-basic level care, making potential subjects in the early stage of treatment to a large extent, which not only promotes the participation of clinical trials, but also promotes the continuity of patients. In addition, competition for generics in Brazil is fierce, but the increasing focus on early-stage clinical trials is good news for innovative research efforts.

Mexico Pharmaceutical Market: Mexico is the 11th largest pharmaceutical market in the world, with a market size of more than 13.2 billion US dollars. With a 0.12 billion population, a stable economic situation, an expected 2.1 per cent growth in GDP, and extensive medical needs, especially those related to chronic diseases such as cardiovascular, diabetes and cancer, many multinational companies still consider Mexico to be an "emerging market".

The Russian Pharmaceutical Market

Russia remains a major emerging market with better growth prospects than the EU and US markets. From 2011 to 2019, Russia's compound annual growth rate (CAGR) exceeded 10%, and generic drugs accounted for more than 51% of the market capacity. Some reports also stated that generic drugs accounted for more than 70%, and generic drugs accounted for 20% of market sales revenue. It is expected that per capita drug consumption will continue to increase in the next few years, and the average annual growth of domestic drug production will be as high as 25%.

However, private health insurance continues to grow due to the insufficient coverage of voluntary health insurance (VHI) in Russia, which only covers the basic content, and the increasing number of private doctors for the rich. Compared with Russian pharmaceutical companies, foreign multinational companies are in the retail/prescription-private paid outpatient pharmacy-commercial part (accounting for 2/3 of sales), DLO (supplementary drug supply plan)-favorable to foreign innovative drugs (imports account for 47% of the total) and hospitals dominate the three market segments.

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