Seventeen, Not Seven, Markets Now Hold "Pharmerging" Title

Seventeen pharmaceutical markets are now ranked as “pharmerging,” according to market-research firm IMS Health. Previously, only seven markets held this title: China, Brazil, Mexico, India, Russia, South Korea and Turkey.

A new IMS report, Pharmerging Shake-Up: New Imperatives in a Redefined World, predicts that 17 countries together will expand by $90 billion between 2009 and 2013, contributing 48% of annual pharmaceutical market growth, up from 37% last year. Behind the change is the global economy and the healthcare environment as well as the growth of the generic-drug market, says the report. This complex transformation has moved full force since 2006 when IMS first released its seven-country pharmerging market list.

“With a raft of pharmerging countries rapidly gaining market share, we’re seeing a new world order take hold within the pharmaceutical industry,” said Murray Aitken, senior vice-president at IMS’ Healthcare Insight, in an IMS press release. The firm has broken down the 17 countries into three tiers. China is the only country in the first tier as it stands “in a league of its own,” according to the report. The country is expected to become the world’s third-largest pharmaceutical developer as soon as next year with $40 billion in growth through 2013.

The second tier includes Brazil, India, and Russia, which are expected to add between $5 billion and $15 billion in annual sales by 2013. The third tier, referred to as “fast followers” by IMS include: Venezuela, Poland, Argentina, Turkey, Mexico, Vietnam, South Africa, Thailand, Indonesia, Romania, Egypt, Pakistan, and the Ukraine. These 13 countries are expected to contribute between $1 billion and $5 billion each in annual sales growth by 2013. (Note: IMS reclassified South Korea as a “developed” market based on its current level of gross domestic product so it is no longer in the pharmerging market list.) Overall, these pharmerging markets are expected to be the biggest contributor to global growth in the next five years.

On the other side of the scale, IMS Health notes that mature pharmaceutical markets such as the US are experiencing lower sales growth based on patent expiration, increased generic-drugs on the market, underfunding of the biotechnology industry, and stricter regulations. Despite the change, IMS predicts that the US and Japan will still hold the first and second spots in its ranking of global pharmaceutical markets in 2013. China, however, will boot out France for the third spot. Germany is expected to hold at the fourth spot.

The dramatic change in the rank of markets should “bring a renewed sense of urgency to the management agenda of an industry already under pressure,” states the report. Manufacturers will need to reassess their geographic portfolios, including not only acknowledging the changing global market but also embracing and adapting to it," says IMS. “With the right fundamental sin place, and the ability to fulfill tactical execution efficiently, they can be positioned to pursue and leverage the pharmerging markets as the major source of growth they represent.”

The full report is online.