The pharma trifecta: Generics, new markets, and personalization
What three trends are most important to pharma these days? Generics, emerging markets and personalized medicine, according to the Harvard Business Review.
Branded generics are the wave of Big Pharma's future, HBR says. These branded versions of off-patent meds sell at higher prices than regular generics do, but are cheaper than the branded meds themselves. They give a measure of assurance to patients worried about counterfeit meds--and to those concerned that unbranded generics won't work as well as their branded counterparts. They also offer drugmakers a niche in emerging countries.
That leads us to the second trend: Emerging-markets growth is a "beacon of hope" for the drug industry, HBR says. With India and China growing so quickly, everybody who's anybody in pharma is seeking a piece of that business. But there are pitfalls, including pricing pressure (hence branded generics), and the fact that drugs developed in mature markets sometimes aren't "relevant" in emerging countries. Furthermore, insurance and payment systems are different in those nations--something that might be a problem (or an opportunity).
Finally, personalized medicine: Gene testing has identified cancer patients who are most likely to respond to certain drugs. As pharma targets drugs more tightly, it will change their economic model, HBR argues. Marketing will have to become highly specialized. Some companies might abandon vertical integration. And all will have to get more involved in diagnostics, one way or another.
- read the HBR piece