MENA pharmaceutical review, strategies and outlook pptx
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A brief description and thoughts of Middle East & Africa pharmaceutical market review, strategies and business outlook 2015-2018
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MENA pharmaceutical review, strategies and outlook pptx
- 2. 2 Global pharmaceutical market overview and outlook Agenda What are the Growth drivers? Transformation in diseases and treatments? How will it look like?
- 3. 3 MEA Agenda PEST Analysis Market Entry challenges Go to market approaches Establishment and registration Pricing and reimbursement Distribution Sales and Marketing
- 5. Global overview and outlook 2014 World fact book 2014 5
- 6. 6 Global overview and outlook 447 289 73 38 245 Americas Asia / Pac. Cen. / E. Eur. M. East / Afr. West. Eur.
- 7. Global overview and outlook Slow but accelerating growth USD1,280bn 7Global Outlook for Medicines Through 2018, November 2014 2018
- 8. Global overview and outlook Slow but accelerating growth CAGR Global Outlook for Medicines Through 2018, November 2014 8
- 9. 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
- 10. 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?
- 11. 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. 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?
- 13. 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. 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. 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. 16 Transformation in treatment How will it look like? Oncology Diabetes Hepatitis C Greater spending on specialty medicine:
- 17. Strategy pharma-emerging markets 17 Development of disease patterns
- 18. IMS Market Prognosis, September 2014; IMS Institute for Healthcare Informatics, October 2014 18 Top 20 classes by 2018
- 19. 19 Number of products in pipeline by phase and therapy area Products in pipeline
- 20. 20 Hepatitis C regimen roadmap
- 21. 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. 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 and profitability in emerging markets Traditional branded and Generic pharmaceutical will lead the growth in the next 5 Y vs new specialty products Pharmaceutical companies have an opportunity to market their traditional global brands 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
- 23. 23 MEA
- 24. 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. 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
- 27. 27 MEA PEST analysis Economic Out-of-pocket expenditure
- 28. 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. 29 MEA PEST analysis Socio-Cultural and lifestyle diseases
- 31. 31 MEA PEST analysis Socio-Cultural and Cancer
- 32. 32 MEA PEST analysis Socio-Cultural and lifestyle diseases
- 33. 33 MEA PEST analysis Technological Pharmaceutical R&D USA MEA
- 36. Tier 3 Pharmerging 36 Key Challenges MEA
- 37. 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. 38 Market Entry challenges Go to market approaches 78% 75% 58% 41% 29% 43% 46% 19% 1% 41% 28% 22% 16% 0% 42% Subsidiary/independent commercial presence Own sales force Own manufacturing/packaging facilities Own R&D departments Partnerships with local companies 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. 39 Market Entry challenges Go to market approaches KSA Market entry by global pharma
- 40. 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 period Threat of new entry • Imported raw materials and machinery • Low supplier concentrationSupplier Power • preference for imported pharmaceuticals • Branded substitutes priced higher / Limited price elasticity Threat 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
- 41. 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. 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 (renewable Assistance 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. 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. 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. 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. 46 Market Entry challenges Establishment and registration Data requirements for pharmaceutical product registration for different region
- 47. 47 Market Entry challenges Establishment and registration Data requirements for pharmaceutical product registration for different region Journal of Drug Delivery & Therapeutics; 2013
- 48. 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. 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 countries Average of the three External reference pricing,
- 50. 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 Reductions Fix 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. 51 Market Entry challenges Pricing and reimbursement
- 52. 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. 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/
- 54. 54 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 the government
- 55. 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. 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 significance Pharmacoeconomics studies Prices of similar, alternative registered drugs Ex‐factory, wholesale and consumer prices in the country of origin Proposed cost, insurance and freight (CIF) price to Saudi Arabia Export price to countries where the drug is registered Drug 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. 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. 58 Country Regulatory Authority Pricing Reimbursement Egypt Central Administration for Pharmaceutical Affairs Reference price system. Positive list of drugs available for reimbursement in hospitals and primary care units Kuwait MoH, 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 Directorate Two 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 Committee Single 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 Turkey MoH, 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 MoH The 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. 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. 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. 61 Market Entry challenges Distribution Manufacturer Distributor Exclusive Non-exclusive Direct to Market Terms should be included in the agreement • The products sold where and to whom the distributor will resell these products • Ownership of inventory • Sales targets Annual sales & Growth target Mechanism 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) and consequences on termination What happens to the remainder of any stock left? The return of any confidential information (e.g. contacts
- 62. Thank you 62
Editor's Notes
- CAGR 3 9 1 7 (1) West Eur declining 1.4% Asia growing 9%
- will be boosted by a combination of rapid population growth due to falling infant mortality rates and increased longevity, along with improved access to subsidized healthcare growth in demand for medicines is expected as incomes rise
- totals will exceed 100 for rounding up numbers.. US market, This is a reflection of a shift in the balance of the “innovation cycle”—the amount of new medicines being launched and utilized compared to the value of branded medicines that are facing new generic competition. an unusually high level of spending on new products is coinciding with an unusually low reduction in the use of brands associated with new generic entrants Price increases contribute to U.S. market growth Across the major markets in Europe, economic austerity–led efforts to constrain growth in healthcare spending, and especially medicines, have resulted in spending declines or very low growth, which will continue through 2018
- Locally manufactured generics are a key source of affordable drugs in African markets, where domestic manufacturers often enjoy preferential treatment to encourage domestic production The pharmerging markets will expand at a compound annual growth rate of 8-11% through 2018, a slower pace than over the past five years, which averaged 13.6% growth. China, already the world’s second largest pharmaceutical market, will reach spending levels of $155-185 billion in 2018. Implementation of health reforms are increasing demand for medicines, while pricing regulations are being used more frequently to manage overall growth levels. Over 80% of growth in pharmerging markets will be attributed to non-branded medicines
- Widespread poverty and a heavy disease burden add to the problems faced by patients in many African countries, focusing much growth on traditional therapies; growth in the AFME region including Egypt and Algeria will be driven by increases in the incidence of chronic, age-related conditions driving demand for traditional chronic therapies
- Changing disease patterns in emerging markets will provide pharmaceutical companies with additional opportunities to market their existing and increasingly global and innovative product portfolios
- CNS products as a result for the population aging and increase in life expectancy from 65 years to 73 years
- The next four years will see combinations of direct-acting antiviral agents (DAA) that are administered without interferon and ribavirin, and with increased efficacy in pan-genotypic HCV infections, easier dosing, shorter courses of treatment and reduced side effects DAAs combined with interferon & ribavirin may remain viable options in pharmerging markets Starting with the entry of AbbVie’s triple combination, manufacturers will innovate around affordability and cost control as they seek to compete with other equally effective therapies. Competition on list price will likely begin with the entry of BMS’s triple combination regimen.
- Significant increase in transportation cost of goods in Iraq to secure shipments Parallel import to Iraq & Syria from Turkey & others Primary registration still accepted in Iraq to import new products (CPP & Price Certificate) Sanction by US & EU, limits exports to Iran GCC, regulations to unify prices across GCC markets to the lowest registered price
- global pharmaceuticals market is worth US$300 billion a year, a figure expected to rise to US$400 billion within three years. The 10 largest drugs companies control over one-third of this market, several with sales of more than US$10 billion a year and profit margins of about 30%
- King Abdullah Economic City (KAEC The Knowledge Economic City (KEC Prince Abdulaziz bin Mousaed Economic City (PABMEC Jazan Economic City (JEC
- It is evident that a lack of harmonisation between countries can lead to unnecessary duplication of work and waste of valuable resources and eventually increase drug lag Gulf have almost harmonized their regulatory environment through Gulf Co-operation Council (GCC) organizations, rest of the regions are yet to come up with the harmonized regulations in their respective region Ministry of Health of GCC states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE) are regulatory authorities for the regional pharma sector. They also regulate prices of pharmaceutical products and bring about harmonization of varying prices and the regulatory process, the GCC implemented a centralized system, Gulf Central Committee for Drug Registration (GCC-DR) in May 1999, which currently runs parallel to the regulatory regimes in the region.
- The use of Greece has proved particularly contentious and that country has been removed from some reference baskets
- in Germany, assess the prices of new drugs in comparison to existing generics. Under the German pricing rules, a medicine must have an added clinical benefit over existing therapies in order to avoid being priced under the reference system. Germany is an example of a scheme whereby drugs are grouped together if they are considered to be equally safe and effective, rather than bioequivalent, creating a much larger reference group. For example, statins (atorvastatin, simvastatin, rosuvastatin) are commonly grouped together despite having different active ingredients, as they all reduce the level of low-density lipoprotein (LDL) cholesterol in the Blood Egypt, where there is no distinction between the first, second, third and subsequent generics. Instead, the price reduction of generic drugs in comparison to the originator products is related to the licensing and ownership status of the manufacturing plant. For generics manufactured in a plant licensed by the Ministry of Health and certified by international agencies, the reduction is 30%. If the plant is licensed by the Ministry of Health alone, the reduction is 40% and, for companies that contract out manufacturing, the price reduction is 60%.
- In the UK, pharmaceutical prices are indirectly controlled by the Department of Health, under the Pharmaceutical Price Regulation Scheme (PPRS). The PPRS does not regulate prices directly, but limits individual company profits. Manufacturers are free to set specific drug prices, but must not breach their overall profit limit on sales to the NHS. If they do, the excess must be paid to the government.
- Sovaldi costs about $130 to manufacture Gilead claims that the pricing reflects the value of Sovaldi and it deserves a premium because of downstream health savings USA $84,000 for a course of treatment The irrational pricing of drugs has ginned up anger like I have never seen. Patient groups are protesting, and payers of all kinds — small businesses, large businesses, health plans, Medicaid plans, unions and government agencies — are galvanized to do something about it. No idea is too outlandish and all of them are on the table.
- Pricing and reimbursement is not directly linked in Saudi Arabia and there is no national unified strategy for reimbursement. Registration and pricing of a drug by the SFDA does not guarantee reimbursement by the healthcare sectors. Decisions on formulary listing and reimbursement are made by Pharmacy and Therapeutics Committees in the various healthcare sectors. The organisations involved in reimbursement decisions include the MoH, National Guard Health Affairs, Ministry of Defence & Aviation, Ministry of the Interior, Ministry of Higher Education (University Hospitals), and the private sector and health insurance companies