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This point of view highlights five branded generics strategies that global pharmaceuticals should master to win in emerging markets
Emerging markets can be tricky for pharmaceutical players that are more comfortable operating in a developed market especially as big pharma companies often feel a need to compete more aggressively with a class of products known as branded generics.
Branded generics are generic versions of products sold either by the original manufacturer of the patented drug or by generic manufacturers that build up brand equity for their generic versions of the medication, which they introduce right after the patent expires on the original product.
The original manufacturers attempt to build on the name recognition of the branded drug to maintain market share in face of the generic manufacturers. On the other hand, generic manufacturers strive to build their brand equity with support from their sales, marketing and medical organizations.
Given these realities, global pharmaceutical companies, with a core competency in commercialization and R&D, need to either compete with or against the branded generics to be successful in the emerging markets.
While branded generics in emerging markets offer pharma companies opportunities to expand, success is uncertain. Multinational companies (MNCs) should consider the following five winning elements of successful branded generics strategies:
Establish sustained capabilities with strong local talent: Have a local manufacturing or distribution presence, which is also a show of goodwill to the authorities. Additionally, set up local R&D capabilities to attune product portfolios to the urgent needs of the country, and hire and retain local talent to benefit from local resources.
Enhance contracting capabilities: Create high-volume sales opportunities to overcome low margins on off-patent products, and have the ability to manage accounts receivables and credit risk.
Engage in portfolio marketing: Enable sales teams to promote multiple products with physicians as physician engagement and brand equity are critical for success.
Recalibrate regulatory affairs: Know how to navigate government relationships and have the ability to file for the fastest route for approval so as to outpace generics.
Bolster the sales force with multichannel engagement: Create trust and recognition among health care providers and provide lower-cost solutions for lower-priced markets.
Branded generics in emerging markets offers big pharmaceutical players a viable growth avenue, but companies need to understand the unique challenges they face in pursuing this opportunity.
With the increasing pressure on government budgets and cost containment, the window of opportunity that branded generics present may not stay open for long. Therefore, MNCs should consider exploring and pursuing a select combination of the strategies discussed in this paper.
The five elements of winning branded generics game plans can help leaders identify potential gaps in their go-to-market plans, and prepare them for the unconventional aspects of doing business in many of these markets.
December 3, 2012
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