mena pharmaceutical review, strategies and outlook pptx
TRANSCRIPT
MENA pharmaceutical market overview Strategies and outlook
1
Wesam Nehad
2
Global pharmaceutical market overview and outlook
Agenda
What are the Growth
drivers?
Transformation in diseases and
treatments?
How will it look like?
3
MEA
Agenda
PEST Analysis
Market Entry
challenges
Go to market approaches Establishment and registration
Pricing and reimbursementDistribution
Sales and Marketing
4
Global pharmaceutical market overview and outlook
Global overview and outlook
2014
World fact book 2014 5
6
Global overview and outlook
447
289
73
38
245
AmericasAsia / Pac.
Cen. / E. Eur.
M. East / Afr.
West. Eur.
Global overview and outlook
Slow but accelerating growth
USD1,280bn
7Global Outlook for Medicines Through 2018, November 2014
2018
Global overview and outlook
Slow but accelerating growth
CAGR
Global Outlook for Medicines Through 2018, November 2014 8
http://www.worldometers.info/ 9
Global overview and outlook
What are the Growth drivers?
7,282,490,400
Net growth 80M/Year – growth rate is 1.1%
Population growth
Highest growth rate 2.1% for ME&AF
Global Outlook for Medicines Through 2018, November 2014 10
Global overview and outlook
Change in life style &
aging population
By 2018
What are the Growth drivers?
Global Outlook for Medicines Through 2018, November 2014 11
Global overview and outlook
New Innovations
Oncology $100bn
Diabetes$78bn
HepatitisC$100bn
Fewer patent expiries, launches of more innovative medicines and price increases.
What are the Growth drivers?
12
Global overview and outlook
Improved access to medicine and economic improvement
中国
Brasil
India
Россия
Tier 3 pharmerging
Tier 3 Pharmerging :Algeria, Argentina, Colombia, Egypt, Indonesia, Mexico, Nigeria, Pakistan, Poland, Romania, Saudi Arabia, South Africa, Thailand, Turkey, Ukraine, Venezuela, Vietnam
日本AFME
What are the Growth drivers?
Sources of growth
13IMS Market Prognosis, September 2014; IMS Institute for Healthcare Informatics, October 2014
North America is leading, Emerging markets are gaining, Europe is losing
How will it look like?
14
Brands Vs Generics Growth
IMS Market Prognosis, September 2014; IMS Institute for Healthcare Informatics, October 2014
Generics continue to drive growth globally and 50% of AFME growth
How will it look like?
15
Specialty Vs Traditional Growth
IMS Market Prognosis, September 2014; IMS Institute for Healthcare Informatics, October 2014
Traditional medicines are the strong growth driver in AFME region
How will it look like?
16
Transformation in treatment
How will it look like?
Oncology
Diabetes
Hepatitis C
Greater spending on specialty medicine:
Strategy pharma-emerging markets 17
Development of disease patterns
IMS Market Prognosis, September 2014; IMS Institute for Healthcare Informatics, October 2014 18
Top 20 classes by 2018
19
Number of products in pipeline by phase and therapy area
Products in pipeline
20
Hepatitis C regimen roadmap
21
PD-1 targeting drugs that boost immune system response
CDK inhibitors, which inhibit cancer cell proliferation
CAR-T cell therapies are the next generation of personalized medicine, modifying the body’s own T-cells to kill cancer cells
ALK inhibitors address crizotinib resistance and will become the standard of care in the next five years
CTLA-4 immune activation having proven success with ipilumumab
New immunotherapies
22
Conclusions
Growth patterns in developed markets will continue to flatten or decline
MNCs are shifting more of their focus to find new sources of revenues andprofitability in emerging markets
Traditional branded and Generic pharmaceutical will lead the growth in the next 5Y vs new specialty products
Pharmaceutical companies have an opportunity to market their traditional globalbrands in an extended markets (Emerging markets) (diabetes, oncology, anti-infectives and antivirals, and cardiovascular diseases)
Major five therapeutic classes will lead the growth over the next five years , diabetes,oncology, anti-infectives and antivirals, cardiovascular and CNS
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MEA
24
MEA PEST analysis
Political
MENA remains a region in political transition
Jordan, Morocco and Gulf Cooperation Council (GCC) countries maintained stability and focused on preserving and furthering social and economic gains
The Arab Spring
War in Iraq & Syria
25
MEAF PEST analysis
Economic GDP (current US$) $3.90 trillion 2014
Population, total 594 million 2014
Urban population (% of total) 60% 2014
Nevertheless
Oil prices drop greatly affect exporters in GCC, Libya, Iraq, and Iran
26
MEA PEST analysis
Economic
27
MEA PEST analysis
Economic Out-of-pocket expenditure
28
MEA PEST analysis
Socio-Cultural Youth % of population and unemployment rates
http://www.usfunds.com/investor-library/frank-talk/why-high-oil-prices-are-likely-here-to-stay/
29
MEA PEST analysis
Socio-Cultural and lifestyle diseases
30
MEA PEST analysis
Economic
31
MEA PEST analysis
Socio-Cultural and Cancer
32
MEA PEST analysis
Socio-Cultural and lifestyle diseases
33
MEA PEST analysis
Technological
Pharmaceutical R&D
USAMEA
34
Corporate R&D spending
35
Market Entry challenges
Tier 3 Pharmerging 36
Key Challenges MEA
37
Market Entry challenges
Go to market approaches
Establishment and registration
Pricing and reimbursement
Distribution Marketing and sales
Path to Market
Path to Patient
Patient
Awareness
Healthcare
Access
Diagnosis
Treatment
38
Market Entry challenges
Go to market approaches
78%75%
58%
41%
29%
43%46%
19%
1%
41%
28%
22%
16%
0%
42%
Subsidiary/independentcommercial presence
Own sales force Ownmanufacturing/packaging
facilities
Own R&D departments Partnerships with localcompanies
Which local infrastructure do you consider most relevant for commercial success in different emerging markets?
BRICMT ME Africa
Survey for Key pharma leader /strategy and analysis pharma merging
39
Market Entry challenges
Go to market approaches
KSA Market entry by global pharma
40
Competitive analysis of pharmaceutical manufacturing using the Porter's Five Forces model
Market Entry challenges
Go to market approaches
• High government incentives
• High capital requirements / Long payback periodThreat of new
entry
• Imported raw materials and machinery
• Low supplier concentrationSupplier Power
• preference for imported pharmaceuticals
• Branded substitutes priced higher / Limited price elasticityThreat of
Substitutes
• Government is the single largest buyer
• Low switching costs for consumers / Highly regulated pricing systemBuyers Power
• Strong market presence of multinational companies
• opportunities arising from expiry drug patentsCompetition
Doingbusiness.com 41
Market Entry challenges
Establishment and registration
Economy
Ease of Doing
Business
Rank
Filtered
Rank
Starting a
Business
Dealing with
Construction
Permits
Getting
Electricity
Registering
Property
Getting
Credit
Protecting
Minority
Investors
Paying Taxes
Trading
Across
Borders
Enforcing
Contracts
Resolving
Insolvency
United Arab Emirates 22 1 2 1 1 1 3 1 1 1 12 6
Saudi Arabia 49 2 8 4 2 4 1 4 3 10 8 17
Qatar 50 3 7 5 5 5 12 9 1 8 5 1
Bahrain 53 4 11 2 9 2 5 7 4 9 13 5
Tunisia 60 5 6 9 4 8 7 5 14 4 2 2
Oman 66 6 10 6 11 3 7 9 5 7 15 8
Morocco 71 7 1 7 13 15 5 9 12 2 3 9
Kuwait 86 8 17 10 14 7 7 1 6 13 16 11
Malta 94 9 12 11 17 9 14 3 7 3 7 4
Lebanon 104 10 9 16 7 12 7 8 8 11 9 12
Egypt, Arab Rep. 112 11 4 14 15 10 1 13 18 12 18 10
Jordan 117 12 5 12 6 13 18 16 9 5 10 14
Iran, Islamic Rep. 130 13 3 17 16 19 3 16 16 19 1 13
Yemen, Rep. 137 14 13 8 18 6 18 18 17 16 4 16
West Bank and Gaza 143 15 19 18 12 11 7 14 10 14 6 18
Algeria 154 16 14 13 19 18 14 12 20 15 11 7
Djibouti 155 17 20 15 20 17 16 18 13 6 19 3
Iraq 156 18 15 3 3 14 16 15 11 20 17 18
Syrian Arab Republic 175 19 18 19 10 16 13 5 15 18 20 15
Libya 188 20 16 19 8 20 18 20 19 17 14 18
http://www.doingbusiness.org/rankings
42
What do Free Zones /UAE offer?
100% Foreign ownership 100% Tax exemption for corporate, import/export, personal income 100% Repatriation of capital & profits State-of-the art purpose built infrastructure No foreign exchange controls Residence visas granted for 3 years (renewableAssistance with labor recruitment, and additional support services, such as sponsorship and housing
Market Entry challenges
Establishment and registration Free Zones
45 FZ /UAE , 4 Economic Cities/KSA
43
Market Entry challenges
Establishment and registration
Journal of Drug Delivery & Therapeutics; 2013
Regulatory Barriers
• Western approval
• CPP
• GMP
• Pricing approval
• Document authentication
• Harmonization
44
Market Entry challenges
Establishment and registration RA Challenges
Lack of harmonization in regulatory requirements
Absent, new or changing regulations
health authorities have limited resources
Lack of formal pre-submission meetings or scientific advice.
Long review timelines for registration hence more uncertainty.
More detailed documentation, SOPs, validation requests
More requests for inspections,
45
Market Entry challenges
Establishment and registration
Frequent and early communication with Health Authorities
Early integration of emerging market strategy into development plans and
integration of regional requirements into a global regulatory plan
Be the first with a product for an unmet medical indication and proper invest
in the region
Strategies for Success
Proper Time management as the registration and company success depends
upon the time taken by product to reach the market first
Know and be compliant with national requirements
Health authority relationships critical, local talent important
Journal of Drug Delivery & Therapeutics; 2013
46
Market Entry challenges
Establishment and registration
Data requirements for pharmaceutical product registration for different region
47
Market Entry challenges
Establishment and registration
Data requirements for pharmaceutical product registration for different region
Journal of Drug Delivery & Therapeutics; 2013
48
Market Entry challenges
Pricing and reimbursement
Internal Reference Pricing
Fixed Generic Price Reductions
Internal Reference Pricing
Reference Pricing
Free Pricing and Indirect Control
Value-Based Pricing
49
Reference Pricing
Market Entry challenges
Pricing and reimbursement
common feature of reference pricing systems is the desire to reduce the cost of reimbursement for healthcare providers
refers to the price of a similar medicinal product in a defined basket of countries
Taking the average price of the pharmaceutical product
in several countries
Percentage reduction on the mean average
Selecting the lowest price of the pharmaceutical among
selected countriesAverage of the three
External reference pricing,
50
Market Entry challenges
Pricing and reimbursement
Internal Reference Pricing
Utilize the prices of drugs already marketed within the same country as reference points for the pricing of new drugs
The reference price established through this type of system is usually the reimbursement price for a group of drugs, rather than for a single product, this could lead branded drugs to be effectively forced down to the price of the lowest generic
Fixed Generic Price ReductionsFix the level of discount of the first and subsequent generics to enter the market, in comparison to the originator product
Saudi Arabia, the price of the originator drug is reduced by 20% upon registration of the first generic alternative, which itself is priced at 35% less than the originator. Subsequent generics are priced at 10% less than the previous one
51
Market Entry challenges
Pricing and reimbursement
52
Market Entry challenges
Pricing and reimbursement
pricing and reimbursement decisions are important in determining the likely commercial success of a pharmaceutical product in the marketplace
The ultimate goal is to secure the required medicines at the best possible price
Free Pricing and Indirect Control
non-reimbursed medicines and over-the-counter (OTC) products
free pricing for reimbursed pharmaceuticals is unrealistic, In the US prices for prescription medicines are negotiated with private Health Maintenance Organisations (HMOs) and Pharmacy Benefit Managers (PBMs) Most HMOs and PBMs use drug formularies, with around one third using 'closed' formularies that prevent reimbursement of non-listed drugs
53
Market Entry challenges
Pricing and reimbursement
Value-Based Pricing
The perceived value of a treatment
central to the German AMNOG (Arzneimittelmarkt Neuordnungsgesetz) system manufacturers had been free to set their own prices for new medicines in Germany. However, the new system introduced mandatory pricing assessment for newly introduced drugs in the German healthcare system, whereby the price of medicines is determined by the added benefit they bring to patients
http://www.forbes.com/sites/theapothecary/2014/06/17/the-sovaldi-tax-gilead-cant-justify-the-price-its-asking-americans-to-pay/
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Market Entry challenges
Pricing and reimbursement
Wholesale and Pharmacy Mark-ups
The percentage mark-up is regressive and dependent on the ex-factory price
Mark-ups available to wholesalers and pharmacies are controlled by thegovernment
55
Reimbursement Lists
Market Entry challenges
Pricing and reimbursement
Positive and Negative Lists
A list of medicines are selected for use in public healthcare institutions or for ambulatory prescription under national health systems or for use by major health insurers
Drugs not onto the positive list are generally not eligible for reimbursement
Negative lists are also employed for non-reimbursable drugs
56
Market Entry challenges
Pricing and reimbursement
SAUDI ARABIA
Since July 2009, the Saudi Food and Drug Authority (SFDA) has been responsible for pharmaceutical pricing
Factors affecting pharmaceutical pricing include:Therapeutic significancePharmacoeconomics studiesPrices of similar, alternative registered drugsEx‐factory, wholesale and consumer prices in the country of originProposed cost, insurance and freight (CIF) price to Saudi ArabiaExport price to countries where the drug is registeredDrug prices in the official basket of reference countries
Prices for imported drugs are calculated by the country's pricing committee, which considers manufacturers' wholesale and retail prices in the 'country of origin' along with export (CIF) prices to Saudi Arabia and 30 other countries. In most cases, the lowest price is accepted
57
Market Entry challenges
Pricing and reimbursement
SAUDI ARABIA
Tendering Procedures MoH & governmental and public institutions
Secretariat General of Health (SGH)
The GCC members practice collective purchasing of pharmaceuticals and vaccines through the Secretariat-General of Health (the SGH Tender).
National Unified Procurement Company for Medical Supplies
NUPCO's major customers are:
MoH
The National Guard Health Affairs;
The Ministry of Defense & Aviation's medical services department
The Ministry of Higher Education's university hospitals and healthcare centres
King Faisal Specialist Hospital and research centers
58
Country Regulatory Authority Pricing Reimbursement
EgyptCentral Administration for Pharmaceutical Affairs
Reference price system.Positive list of drugs available for reimbursement in hospitals and primary care units
KuwaitMoH, Drug and Food Control Administration
Decision based on the price in the country of origin and CIF prices
Public medicines list reimbursed in public sector.
Morocco MoH, Drugs & Pharmacy DirectorateTwo pricing structures, for calculation method of pricing domestic drugs and for imported drugs.
Positive list, although most pharmaceuticals are privately funded.
Saudi Arabia SFDA Reference price system.Pharmaceuticals listed on government formularies are fully reimbursed, although there is no national policy.
South Africa DoH Pricing CommitteeSingle exit price set by manufacturers, incorporates wholesale and distributor fees Dispensing fees set separately
Essential drugs list. Drugs used in public sector primary care are 100% reimbursed by the government. For drugs used in hospital care or those obtained on prescription, patient co-payments may be required
TurkeyMoH, Department of Pharmaceutical Pricing; Reimbursement Commission, Ministry of Finance.
Reference price system based on lowest price among reference countries for reimbursable drugs For products not valid for reimbursement, pricing is set at 100% of the highest reference country.
Positive list. Since November 2011, prescribed medicines have been reimbursed at up to 10% above the lowest priced drug in their category
United Arab Emirates
MoHThe MoH has implemented a unified pricing system.
Reimbursement through compulsory private health insurance. Expatriates can receive 50% discount for treatment in the public sector on production of a contributory health card
Market Entry challenges
Pricing and reimbursement
59
Market Entry challenges
Distribution What distributor does?
Distributor
RA and local
authorities relations
Custom clearance
Storage and distribution
Collection and
payment
Tendering and market
access
60
Market Entry challenges
Distribution
Manufacturer Distributor
Retail Pharmacies
Private Hospitals
Wholesaler
Governmental tenders
Governmental hospitals
PC outlets
Retail consumer
Super markets
End User
What distributor does?
61
Market Entry challenges
Distribution
Man
ufactu
rer
Distributor
Exclusive
Non-exclusive
Direct to Market
Terms should be included in the agreement
• The products soldwhere and to whom the distributor will resell these products
• Ownership of inventory• Sales targets
Annual sales & Growth targetMechanism for reporting sales
• Marketing responsibilities• Any consent agreed that the distributor may employ ‘sub-distributors’;• Intellectual property rights• Circumstances in which the contract may be terminated
how the contract may be terminated (for example, by written notice sent to either party’s registered office) andconsequences on terminationWhat happens to the remainder of any stock left?The return of any confidential information (e.g. contacts
Thank you
62