Roberto Carminati and Caterina Lucchini
During a recent online seminar Frost & Sullivan’s analysts and experts wondered whether the so-called Bric area can indeed be the saviour for the life sciences and medical devices sector; or not. There is no doubt in fact that Brazil, Russia, India and China still represent a huge market opportunity for pharmaceutical companies from all over the western world but still they need to be handled with care. To develop a successful business model in the emerging nations many different and critical issues have to be taken into account, frequently depending on factors such as a very peculiar regulatory landscape, a complicated bureaucracy and the prominent role of local governments in many aspects of the overall entrepreneurial activities. And you’d also have to add the portrait the fact that nations like India and China still host some vast and somehow unexplored rural areas where access to drugs and therapies is extraordinarily difficult; and, in the same regions, the lack of modern infrastructures. Let’s take India, for instance. Participated by Reenita Das, Eduardo Golisano, Sandeep Sinha, Siddharth Saha and Glenn Hou the Frost & Sullivan’s webinar showed how the local government is trying to attract foreign investments in healthcare but “bureaucratic hurdles make investors tread with caution”; whilst “per capita spending in healthcare” lies among “the least compared to other Bric nations”. But watch out: this does not mean the nation is not growing up fast and will not be able to provide producers interesting chances of business.
The importance of being organised
Together with the improvement of hospitals and medical infrastructures Frost & Sullivan strongly underlined the “massive uptake of medical devices and consumables” and the robust engagement of private equity investments in healthcare delivery, “boosted by private health insurance adoption and hence service utilization”. Also, F&S noted that “in the diagnostic service business, 80% of provision is in the unorganised sector which represents a huge opportunity” and that “90% of retail pharma is unorganised”, thus granting organised players further spaces of growth. It is the private sector to provide 70-75% of total healthcare in the country and this is the reason why the webinar considered the government funding both “inadequate and inconsistent”, stressing the high urban-rural divide. Also, while the low cost and generic drugs industry is nowadays expanding, a “license by government” is “compulsory for low cost pharma products to reduce the cost of treatment”. To succeed in the Indian market corporate need a tailor-made business model based on forms of private-public partnerships and designed to include a series of products and services for various segments of population and healthcare providers. Reasonably, producers will have to deploy a paradigm of pay per use services in medical technology and IT Healthcare sectors; assuring a portfolio of products and services able to reduce “the initial cost of establishment for hospitals”. Frost & Sullivan’s online event finally focused on few best practices to approach the Indian market in three different business segments. In the healthcare and consumer goods supply a key to success comes from the ability “to reach masses by way of community programs, health and hygiene campaigns and to reach bottom of pyramid” creating “huge brand loyalty”. Leading skin and wound care manufacturers based their strategies on quality products and innovation; but also managed to deliver added value by the means of training and education both addressing partners and distributors, on the one hand; and (potential) customers on the other. Last but not least, it is a strong distribution network together with top quality premium solutions and maximum reliability that made the fortunes of few international pharma and diagnostic suppliers who built a strong brand awareness among doctors and hospitals by leveraging and treasuring up on the reliability of their therapies and solutions for oncology and cancer treatment.