Big Pharma changes rules in emerging markets

If that well-meaning advice-giver in The Graduate were speaking to pharma today, he might well say, "Two Words: Emerging Markets." That phrase is getting more and more traction these days, as drugmakers wake up to the fact that the coming growth areas on the globe aren't found in North America or Europe. And as the importance of countries such as India, China, and Brazil grows more evident to Big Pharma, so is the fact that the strategies that work in the super-industrialized world won't serve in countries where the middle class is just now growing by leaps and bounds.

We all know that the pharma majors are moving into R&D in places like India and China, and that more and more are outsourcing their manufacturing to emerging countries. But to sell products there, on the ground, they're trying things that they'd never do elsewhere. "Differential pricing," for one thing, which takes into account per-capita income in setting prices; soon, there might even be different prices for middle class Indians, for instance, and the subcontinental poor. Standard arguments against it--that these cheaper meds will get resold on the black market, for instance--are falling by the wayside. What else might Big Pharma do to gain a major foothold? We'll have to watch and see.

- see the story in The Economist

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