DuckerFrontier’s Director of Healthcare, Stephen Majors, presented last month at the Pharma Market Research Conference in Basel, Switzerland on global healthcare trends, how to succeed in international markets, and value-based care. Below are some key takeaways from Stephen’s presentation to help you win in your most important global healthcare markets.
The US is considering international reference pricing and allowing Medicare to negotiate the prices of prescription drugs. Slower growth plagues developed markets, while higher growth rates are returning to emerging markets. China is issuing faster approvals for innovative foreign drugs. Global trade fragmentation, and localization pressures, are promoting more ‘local for local’ supply chains.
All of these factors are causing pharma and biotech firms to rebalance their global footprint for development and commercialization. This, in turn, means firms are increasingly allocating more resources to formerly deprioritized markets, and entering completely new markets.
There are two key challenges that pharma and biotech firms must overcome in less established markets:
1. Reimbursement uncertainty, including lower rates of insurance coverage and a fragmented payer landscape.
2. Misaligned value propositions due to lower per-capita incomes and underdeveloped insurance systems.
Value-based contracting is one way in which companies can address the twin challenges of reimbursement uncertainty and misaligned value propositions, while differentiating themselves from competitors. While Europe has long led the way in value-based contracting, the trend is rising in the US (among private payers and in states including Louisiana) and in emerging markets, including in Brazil and China. Read more about our framework for classifying different value-based contracting models.
Additionally, companies in new markets need to segment their approach based on type of payer and therapy area. For example, China increasingly uses centralized volume-based procurement in its public healthcare system to purchase generic drug. On the higher end of the innovation scale, there are already opportunities for outcomes-based contracts with private payers, and, as discussed above, there are now faster approvals for brand-name foreign drugs on public formularies. The value strategy must be tailored to the payer and type of drug in question – however, our research shows that 50% of companies use the same segmentation models in emerging markets that they use in developed markets.
DuckerFrontier’s Healthcare team is at the forefront of key trends impacting the industry. Our goal is to work with clients to deliver tailored growth solutions to support your critical business decisions and growth strategies. Check out our latest insights on the 2020 Healthcare Outlook, Impeachment, Trade, & Pharma: Politics to Ensure ‘Status Quo’ Ahead of 2020, Medicare for All? It’s the Wrong Question, and What Healthcare Companies Need to Know About Digital Solutions.
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