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Improve access to medicines in emerging markets with a pharma supply chain strategy

Learn how rethinking the pharmaceutical supply chain can help you improve patient access to medicine and enter emerging markets.

Overview

One of the key developments of the past two decades is the rise of the emerging middle class—nations of lower-middle income and upper-middle class consumers with an average per capita income between $1,000 and $12,000. Globally, this group accounts for an estimated $300 billion pharmaceutical market.

These consumers offer life sciences companies extensive market opportunities. But how successful companies will be in these markets depends on how they position their supply chains to gain the best patient access possible.

Background

Life sciences companies are paying more attention to developing markets. To be successful, research shows a proactive access to medicines strategy correlates with business performance.

Our research shows the top 10-ranked pharmaceutical companies that have improved patient access to medicines have outperformed their peers by 20 percentage points of stock price growth each year.

The correlation between access strategy and strong overall financial performance supports the importance of a long-term growth strategy for life sciences companies.

Key Findings

Five billion middle-income people constitute the majority of the global economic pyramid. New measures of their consumer behavior and aggregate purchasing power suggest significant opportunities for life sciences companies to reach these patients through shared value partnering and supply chain excellence.

Further, the demand in both emerging and developing markets is shifting away from infectious diseases to non-communicable diseases (NCD) and chronic conditions such as cardiovascular disease, cancers, diabetes, and respiratory disease. Eighty percent of NCD deaths now occur in the emerging markets, and lower-middle income people in these markets are especially vulnerable.

This is a rising “call to action” for life sciences companies to bring their innovative NCD portfolios and differentiated capabilities to meaningfully address this rising, yet preventable epidemic.

Analysis

Looking at the leaderboard, the top multinational pharmaceutical companies have ranged widely in their success in emerging markets.

These top-ranked companies are recognized as best-in-class for their commitments, transparency, performance and innovation in access to medicines strategy. Overall, these companies are becoming more organized in their access approach, products and pipelines are meeting more needs, and more companies are using tiered pricing schemes. It makes sense that these companies are seeing financial returns consistent with their access initiatives. By focusing on serving the "next 5 billion" in emerging markets, companies see steady growth in the revenue stream through volumes over margins play. The establishment of this strong patient base will be worth the entry price as markets continue to grow and purchasing power increases over time.

Recommendations

Accenture recommends a structured five-step approach for improved market access in emerging markets:

  1. Start with the Patient—Build visibility with patient centricity

  2. Turn Insight into Action—Embed agile planning to rapidly create actionable business intelligence and insight

  3. Take it over the Last Mile—Anchor around demand-driven execution to adjust quickly to changing market and demand conditions

  4. Tap into Mobile as a Connector—Tap into social and mobile networks to augment traditional supply chain capabilities

  5. Create Shared Value—Converge public and private partnerships to open grassroots channels