trend in pharmaceutical market
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Trend In Pharmaceutical Market
SAMIK GHOSH
JSB BATCH (11-13)
Sem 6th
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Internet-savvyphysicians are no longer
an emerging group –
nearly all physicians are
online for professional
purposes weekly or
more.
Introduction
Technology has prompted drastic changes in the marketing world over the past decade, andpharmaceutical marketing has not been excluded from this evolution. Faced with shifting
consumer and physician media preferences and shrinking budgets - what is a smart
pharmaceutical marketer to do? The task is best summed up by the words of English naturalist
Charles Darwin, “It is not the strongest of the species that survives, nor the most intelligent that
survives. It is the one that is the most adaptable to change.” So change you must. The following
paper overviews the latest consumer and physician digital health trends, explores digital
marketing examples, and shares helpful resources for staying up-to-date on the latest digital
pharma news and information.
Digital Health Trends Physician Market Trends
The first and still the most prevalent, pharmaceutical drug promotions were aimed at the
gatekeepers of the prescription pad - physicians. Traditionally, pharmaceutical companies have
deployed sales reps armed with product information and freebies to promote products to
doctors. But technology trends and changing media
preferences are forcing pharmaceutical companies to reassess
how they reach and build relationships with physicians.
In the past, doctors were limited to offline materials like
journals and references for accessing medical information and
news. But those days are long gone, and with just a click of a
mouse or touch of a screen, physicians have access to all of
the resources they need to stay abreast of the latest
knowledge in the field. Internet-savvy physicians are no longer
an emerging group – this market is at a saturation point, as
nearly all physicians are online for professional purposes
weekly or more. In fact, the average physician now spends a
full work day (eight hours) per week using the Internet for
professional reasons, a substantial jump from only 2.5 hours in 2002. The trend of shifting to
digital channels is expected to continue, with physicians reporting that they expect to increase
their use of online resources in the near future. Professional content that have been feeling
“the shift” the most are clinical textbooks/references, journals, conferences, news, and
continuing medical education (CME).
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Mobile technology has played a significant role in increasing physicians’ dependency on online
resources – 64% of doctors own smartphones and are using them to supplement their desk or
laptop computer usage to be “always on.” Also, mobile devices help physicians to access clinical
resources at multiple points throughout their day, even to at the point of care. Currently,
physicians prefer to conduct easy tasks such as information-checking on mobile devices, while
leaving more complex activities like CME for completion on their PCs. But as mobile browsing
capabilities improve, physicians will start to use smartphones for more advanced activities than
just reference purposes.
Physician engagement in Web 2.0 has been one of the hottest topics over the past few years.
As a group, physicians have acclimated themselves to advanced online activities, such aswatching streaming video and listening to podcasts, at a much faster rate than consumers.
Doctors are also catching the social media fever. Many are collaborating in online communities
designed specifically for healthcare professionals; participation in these networks doubled
between 2008 and 2009. Just as the professional channel mix is evolving, so is the traditional
physician-sales rep relationship. Physicians are no longer limited to in-person details for
information and updates on pharmaceutical products, but can easily seek out this type of
information at any time via the Internet. In light of this, pharmaceutical companies are offering
physician online customer services such as customer service portals, live video reps, interactive
detailing, and e-sampling. Sales reps are also “digitalizing” their in-person visits with tools suchas tablet PCs.
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Consumer Market Trends
Unlike physician marketing, DTC advertising in the U.S. is a fairly recent development, only just
about to reach the quarter-century club. And the DTC advertisements that we know today have
only cropped up in just over the past decade, after the FDA amended its legislation on the
amount of risk information required for drug companies to append to promotional material.
Similar to the physician market, an emerging breed of eHealth consumers – those using digital
sources for health – is transforming direct-to-consumer (DTC) marketing.
Like in the case of the physician market, the consumer channels mix has been shifting
significantly towards digital over the past decade. An ever-increasing plenitude of media
sources has ultimately given individuals the upper hand in controlling their information
consumption, lessening advertisers’ ability to reach a concentrated consumer mass through anyone channel. Television, magazines, and newspapers no longer dominate the news and
entertainment world as they once did. In fact, less
than half of U.S. adults report to watch all of their
television programs lives on their TV set, indicating
the growing popularity of DVR, online video, and
other alternative viewing channels. Following suit
with the overall consumer channel shift, individuals
of all ages are turning to the Internet as tool to
empower healthcare decisions. This eHealthconsumer market is not yet at the point of saturation, but still is a substantial 60% of the U.S.
adult population. Health 2.0 is one of the hottest areas of online health. Over 60 million U.S.
adults consume or contribute health-related social media content, such as blogs, message
boards, chat rooms, online patient support groups and other networks. Patient online rating
and reviewing of doctors, health insurance plans, hospitals, and prescription drugs is one of the
fasting growing Health 2.0 activities - and is helping consumers to compare experiences and
become more empowered in their personal healthcare decisions. Consumers have not reached
the same adoption levels as physicians when it comes to smartphones and advanced mobile
technologies beyond just the cell phone. But an early adopter group of mHealth (mobile health)consumers is emerging, as already over 10 million consumers use mobile devices for health and
medical purposes. The mHealth trend has been largely driven by a plethora of new health-
related iPhone applications, ranging from weight loss trackers to diabetes management tools to
medication dosage references.
Less than half of U.S. adults
report to watch all of their
television programs lives on
their TV set.
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Major Industry Trends
Healthcare and pharmaceuticals are two distinct industries, but they are interdependent andare subject to similar trends, which is why they are covered together in this profile. Both are
benefiting from ageing populations in many advanced economies, and various developing
countries, such as China. In addition, important medical discoveries, including the decoding of
the human genome, are fueling scientific advances, and facilitating the release of new drugs
and treatments.
The Impact of the 2008 Recession and Growth through
2011
The investment community generally regards healthcare and pharmaceutical companies as
“defensive” stocks, because they tend to be relatively immune to the vagaries of the economic
cycle. While consumers may cut back on purchases of many discretionary items during a
recession, most people regard their health as a priority. In addition, while individuals may cut
back on private healthcare in times of economic hardship, this simply increases demand for
healthcare services provided by the public sector. Most healthcare spending in the Western
world is funded by governments, and such spending is highly sensitive in political terms. Most
democratically elected governments prefer to find savings in areas other than healthcare forfear of losing votes. Clearly, however, even healthcare spending comes under pressure during a
severe economic recession.
In both Europe and the United States, spending on health and government support for
healthcare for the vulnerable and the elderly is cited, along with state pension commitments, as
one of the more intractable drivers behind growing and unsustainable public sector deficits.
Beyond just looking up general health resources, 100 million consumers are online specifically
for pharmaceutical or prescription drug information. Individuals obtain this information from a
variety of sources, including blogs, insurance sites, general health portals, government sites,
Wikipedia, online communities, and of course the corporate and brand sites of the product
makers themselves.
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Online health and pharma digital trends are leading to better informed, more empowered
patients, and are impacting physician-patient interactions. Virtually all U.S. physicians report
that at least some of their patients bring health information they found online to an
appointment, and more than two-thirds of physicians believe that this trend is a good thing.
Additionally, the majority of physicians report they spend more time with a patient as a resultof the information they brought in to discuss. Traditional doctor-to-patient lectures are giving
way to two-way conversations between physicians and informed eHealth Consumers.
Rx Connect™ delivers comprehensive brand information with digital media---at the pharmacy
shelf next to targeted OTC products. Consumers get the information they need about the
prescription product as well as the condition it treats---facilitating a more informed patient-
physician dialogue.
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Market Analysis
Healthcare Spending
The total global expenditure for health is now more than US$4.7 trillion a year, according to the
World Health Organization, and health expenditure as a percentage of GDP has been increasing
among all major economies. Spending on healthcare varies widely from country to country, as
do outcomes. Nor is there necessarily a correlation between the amount of money spent and
the effectiveness of the healthcare system. The United States spends more on healthcare than
any other country, in both relative and absolute terms, yet its healthcare system scores poorly
in terms of its overall performance, according to the Commonwealth Fund Commission, a US
private foundation that supports independent research on healthcare issues. The Fund
produced a report on the performance of the US health system in 2008 (“National scorecard onUS health system performance”). The scorecard aimed to measure and monitor healthcare
outcomes, quality, access, efficiency, and equity in the United States. It ranked the United
States last out of 19 countries on a measure of mortality amenable to medical care.This poor
performance may reflect the nature of healthcare provision in the United States. The country
has several types of privately and publicly funded insurance plans that provide healthcare
services. However, the private sector dominates healthcare and the United States is the “only
wealthy, industrialized nation that does not ensure that all citizens have coverage” (that is,
some kind of insurance), according to the Institute of Medicine, a nonprofit organization for
science-based advice on matters of biomedical science, medicine, and health.
By contrast, a publicly funded healthcare system, the NHS, dominates healthcare in the United
Kingdom, accounting for more than 80% of healthcare spending in the country. Founded in
1948, it aims to provide a free, comprehensive healthcare service, with delivery at the point of
need, regardless of the ability to pay. It is the world’s largest publicly funded health service, and
claims it is also “one of the most efficient, most egalitarian, and most comprehensive.” Yet it
has many critics, who argue that it is inefficient and overly bureaucratic.
Other countries fund their health services in a variety of ways. According to Key Note Ltd, a UK-
based market-research company, the Netherlands operates a national insurance market for its
16 million residents. Plans may operate on a for-profit or nonprofit basis. The insurance marketis highly concentrated, with the top five plans accounting for 82% of enrolment. Plans typically
offer coverage in all areas of the country and include all providers, although selective
contracting is allowed. Children are covered in full through public funds. Premiums charged for
adults represent 50% of the expected annual costs. By contrast, according to Key Note, the
Swiss insurance system, which covers 7.5 million people, is highly decentralized. Only nonprofit
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insurers may participate in the scheme, and Swiss premiums vary widely according to the
health risks of insured pools across the country, and within regions.
Table 1.
Total healthcare spending as a percentage of GDP, 2012.
(Source: OECD,www.irdes.fr/EcoSante/DownLoad/OECDHealthData_FrequentlyRequestedData.xls)
Japan spends around 8.1% of its GDP on healthcare, almost half the amount of the United
States. Yet the Japanese have the longest healthy life expectancy on the planet. Diet and
lifestyle clearly play a key role, but the country’s universal healthcare system may also be an
important factor. Everyone in Japan is required to take out a health-insurance policy, either at
work or through a community-based insurer, according to Key Note. The firm adds: “The
government pays for those who are too poor. However, 80% of Japan’s hospitals are privately
owned—more than in the US—and almost every doctor’s office is a private business. The
Japanese Health Ministry tightly controls the price of healthcare, down to the smallest detail.
Every two years, the healthcare industry and the health ministry negotiate a fixed price for
every procedure and every drug.”
The US-based National Bureau of Economic Research conducted a study of ten OECD countries
and it points out that healthcare expenditure has been growing at a faster rate, often
considerably faster, than per-capita income. In the United States, healthcare expenditure hastripled as a share of GDP since 1950, from 5% to 15% of GDP. The NBER’s study found that the
primary cause of the continued ramping up of healthcare costs was the provision of increased
healthcare benefits. It points out that pushing up health benefits faster than per capita tax and
income growth is clearly unsustainable, but that major economies, the United States in
particular, currently show little sign of reining in the upward march of benefits, despite huge
cost increases. If this keeps up the United States will see a doubling in healthcare costs as a
Country Healthcare spending, % of GDP Australia 8.9
Canada 10.1
France 11.0
Germany 10.4
Italy 8.7
Ireland 7.6
Japan 8.1*
Portugal 10.2*
Spain 8.5
Sweden 9.1
Switzerland 10.8 (est.)United Kingdom 8.4
United States 16.0
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percentage of GDP within the next 20 years, and a tripling in the next 40 years. No country
could afford that, it points out, so the dilemma of what level of healthcare is appropriate
remains to be resolved.
Global R&D Spending ($ Billions) 1996-2009
Top 15 R&D Expenditure ($ Billion) 2011
COMPANY Money(Billion)
Novartis $9.58
Pfizer $9.1
Roche $8.8
Merck $8.4
Johnson & Johnson $7.5
GlaxoSmithKline $6.29
Sanofi-aventis $6.24
AstraZeneca $5.5Eli Lilly $5.00
Bristol-Myers Squibb $3.8
Abbott lab. $3.7
Takeda pharma $3.48
Boehringer ingelheim $3.2
Daiichi sankyo $2.2
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Astellas pharma $2.5
Total: Over $85 Billion
Overview of Pharmaceutical Industry
The Indian Pharmaceutical Industry currently tops the chart amongst India’s science-based
industries with wide ranging capabilities in the complex field of drug manufacture and
technology. The Indian Pharmaceutical Industry ranks very high amongst all third world
countries, in terms of technology, quality and the vast range of medicines that are
manufactured.
The Pharmaceutical industry has grown from mere US$ 0.3 billion turnover in 1980 to aboutUS$ 21.73 billion in 2009-10. The country now ranks 3 rd in terms of volume of production (10
per cent of global share) a 14th
largest by value (1.5 per cent of global share). One reason for
lower value share is the lowest cost of drugs in India ranging from 5 per cent to 50 per cent less
as compared to developed countries. Indian pharmaceutical industry growth has been fuelled
by exports and its products are exported to a large number of countries with a sizeable share in
the advanced regulated markets of the US and Western Europe.
Many Indian companies maintain highest standards in Purity, Stability and International Safety,
Health and Environmental (SHE) protection in production and supply of bulk drugs even to
some innovator companies. This speaks of the high quality standards maintained by a large
number of Indian Pharma companies as these bulk actives are used by the buyer companies inmanufacture of dosage forms which are again subjected to stringent assessment by various
regulatory authorities in the importing countries. More of Indian companies are now seeking
regulatory approvals in USA in specialized segments like Anti-infective, Cardiovascular, CNS
group. Along with Brazil & PR China, India has carved a niche for itself by being a top generic
Pharma player.
Increasing number of Indian pharmaceutical companies have been getting international
regulatory approvals for their plants from agencies like USFDA (USA), MHRA (UK), TGA
(Australia), MCC (South Africa), Health Canada etc. India has the largest number of USFDA-
approved plants for generic manufacture. Considering that the pharmaceutical industryinvolves sophisticated technology and stringent "Good Manufacturing Practice (GMP)
requirements, major share of Indian Pharma exports going to highly developed western
countries bears testimony to not only the excellent quality of Indian pharmaceuticals but also
its price competitiveness. More than 50 per cent share of exports is by way of dosage forms.
Indian companies are now seeking more Abbreviated New Drug Approvals (ANDAs) in USA in
specialized segments like anti-infective, cardio vascular and central nervous system groups.
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Exports
India currently exports drug intermediates, Active Pharmaceutical Ingredients (APIs), Finished
Dosage Formulations (FDFs), Bio-Pharmaceuticals, Clinical Services to various parts of the
world.
Export of Drugs and pharmaceuticals from 2007-08 to 2009-10 are given below:
YearExports
(US$ billions)
Growth
(in percent)
2007-08 6.3 14.4
2008-09 8.6 35.7
2009-10 9.1 5.9
Source: Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata
The domestic Pharma Industry
The domestic Pharma Industry has recently achieved some historic milestones through a
leadership position and global presence as a world class cost effective generic drugs'
manufacturer of AIDS medicines. Many Indian companies are part of an agreement where
major AIDS drugs based on Lamivudine, Stavudine, Zidovudine, Nevirapine will be supplied toMozambique, Rwanda, South Africa and Tanzania which have about 33 per cent of all people
living with AIDS in Africa. Yet another US Scheme envisages sourcing Anti Retrovirals from some
Indian companies whose products are already US FDA approved.
Many Indian companies maintain highest standards in Purity, Stability and International Safety,
Health and Environmental (SHE) protection in production and supply of bulk drugs even to
some innovator companies. This speaks of the high quality standards maintained by a large
number of Indian Pharma companies as these bulk actives are used by the buyer companies in
manufacture of dosage forms which are again subjected to stringent assessment by various
regulatory authorities in the importing countries. More of Indian companies are now seekingregulatory approvals in USA in specialized segments like Anti-infectives, Cardiovasculars, and
CNS group. Along with Brazil & PR China, India has carved a niche for itself by being a top
generic Pharma player.
Increasing number of Indian pharmaceutical companies have been getting international
regulatory approvals for their plants from agencies like USFDA (USA), MHRA (UK), TGA
(Australia), MCC (South Africa), Health Canada etc. India has the largest number of USFDA -
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Conclusion
Pharmaceuticals has emerged as one of the leading industries in the Indian Inc., with the
domestic market showing an unprecedented growth of around 9% to generate revenue of
about INR 554.5 Billion (US$ 11.1 Billion) in FY 2009. This dramatic growth in the Indian
pharmaceutical industry can be attributed to several factors such as growing middle class
population, rapid urbanization, increase in lifestyle-related diseases and acceptance of healthinsurance. Besides, the product patent regime has provided ample support to the industry to
sustain its growth pace despite the global economic downturn. Generic is emerging as one of
the leading segments to be benefited by many drugs going off-patent in due course of time.
According to our new research report “Booming Pharma Sector in India”, the Indian
pharmaceutical industry is projected to show double-digit growth in near future owing to rise in
pharmaceutical outsourcing and consolidation of highly fragmented industry. As exports from
major part of the pharmaceutical industry in India, leading players have started expanding their
reach towards the West. Thanks to investments in R&D and thriving for more and more ANDA
filings, the clinical trials market is expected to grow at blistering pace in coming years. Tosupport this evidence, we have done an extensive research and analysis of various segments of
the Indian pharmaceutical market. These segments include: Domestic & Export Market,
Branded & Generics Drugs, Formulations & Bulk Drugs, etc.
The baseline for optimistic future outlook of the pharmaceutical market is improvement in
access to medicines of Indian population. Emerging sectors like biogenerics and pharma
packaging will also pave the way for the pharmaceutical market to continue its upward trend
over the forecast period (FY 2010- FY 2013).
The report provides thorough statistical and analytical overview of the Indian pharmaceutical
market. It contains information about past, present and future trends, with focus on entirestructure, composition and working of the pharmaceutical market. The report extensively
discusses opportunities and challenges expected to arise within and outside the pharmaceutical
market. The report also analyzes emerging sectors, regulatory environment and distribution
system to identify strength and weaknesses of the pharmaceutical market. It has thoroughly
examined current market trends; industrial developments and competitive landscape to enable
clients understand the market structure and its progress in coming years. It also gives a brief
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