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Strengths Shared
Large and diverse populations reaching 1.1B and 1.3B respectively Largest pharmaceutical companies perceive China and India as "emerged" markets Large pharmaceuticals willing to outsource key R&D activities to both China and India
Weaknesses Shared
Joint ventures with foreign countries often difficult to form Poor reputation for protecting intellectual property Healthcare highly regulated Language barriers Time and cultural differences Product branding in pharmacy not strong Getting perishables to remote locations difficult Underdeveloped/lacking availability of intercontinental air network, regional air network, temperature controlled shipping Uneven performance on FDAs 4 pillars of trade (i) coalition of regulators (ii) global data information system (iii) expand intelligence gathering system (iv) allocate resources based on risk factors
Strengths China
Governments are distributors and payers for drugs [WOT]2 Government has huge presence [WOT] Wages rising, increasing purchasing power of population [T]
2
India
Significant rural areas *SOT+ Lack of doctors diagnosing key disorders Pharmaceuticals not widely accessible Low demand for branded pharmaceuticals High drug prices and lack of awareness on key disorders Alzheimers disease and depression not properly treated [O] Decentralized, physician-driven market, [SO] Prescription concept not common Prescription drugs readily available in pharmacies Brand attachment to domestic brands, e.g. Cipla, Dr. Reddys, etc.
Strong presence of skilled scientists, researchers, and technicians Lower manufacturing costs Western political ideology and English language More than twice FDA-approved sites of China Issues 3 times as many DMFs (drug master file), leaps ahead in terms of Far ahead of China in ANDAs (abbreviated new drug application), with more than 100 a year Accounts for 20% of all generic drugs Becoming global sales place
Bracketed letters signify that the bullet can also be placed in the other categories, e.g. a bullet in Chinas strengths category followed by [WO] can also be placed in Chinas Weakness and Chinas opportunities respectively.
Opportunities Shared
Increasing trend in building alliances and outsourcing Expectation of more deals in personal medicine and diagnostics [ST] FDA: Value of Pharma will increase 2.5x Doctors have more influence [T] Most doctors employed by larger organizations [T] Common belief that injectable medications are more effective Aggressive cost cutting planned by Big Pharma in regulated markets to increase desirability of outsourcing [T] Branded generics seems to be way of future China and India have inverted triangle first point of entry to health care in these countries tertiary health care, not primary care like U.S.
Threats Shared
Hard to enforce IP laws Domestic companies have existing sales networks and relationships with governments and hospitals; not easy for multinational companies to achieve in short time period Challenges hiring and retaining salespeople [W] Difficult recruiting local employees with education and medical experience [W] Rural areas lack infrastructure Government corruption Midsized pharma companies are growing
Opportunities China
Increased per capita spending on medicine Industry will grow at compounded annual rate of about 25% from 2010 to 2020 Drug market poised to exceed Japan in 2013 and U.S. in 2020 to become No. 1 drug market globally Government bringing entire population within healthcare insurance framework by 2020 [T] Quality becoming market premium Convergence in sectors Worlds largest senior population Senior citizens (over 65) account for 8.4% percent of population, expected to rise to 9.7% by 2016 High levels of hypertension, growing diabetes and high salt level problems Out-of-pocket and private insurance healthcare payments rose from 2007 through 2010, at CAGR of 13.5 percent Improving IP protection
Threats India
India has potential to become a pharma superpower because it has the right people and research facilities Education will inculcate right kind of spirit for pharma industry
China
Government willing to slash drug prices to ensure affordability or to control inflation Increased cost for supporting branded generics
India
Branding concept not welldeveloped Heavy emphasis on local evidence; evidence from US/Europe often disregarded