The Outlook for Pharmaceuticals in Central Asia (pdf/xls)

Additional Information

These reports provide a detailed analysis of four of the most populous countries in the world and the massive potential of their pharmaceutical markets. The markets of Central Asia contrast well; China and India are two of the largest pharmaceutical markets with very large economies, whilst Bangladesh and Pakistan are two of the smallest pharmaceutical markets with significantly smaller economies.

Bangladesh, China, India and Pakistan are projected to have a combined population of 3.0 billion in 2016, which will represent 79.1% of the total population of the Asia Pacific region covered by Espicom. As a percentage of the population, these four countries will have small elderly populations. However, they are projected to account for 72.4% of the total elderly population in the Asia Pacific region in 2016.

China and India are projected to have the largest and third largest GDPs in the region in 2016, respectively. Both are part of the BRICS group that represents the world’s largest emerging economies, along with Brazil, Russia and South Africa. The BRICS countries are predicted to become the most dominant economies over the next few decades, which could lead to a shift in the global balance of economic power.

Bangladesh and Pakistan are projected to have the lowest and second lowest GDPs per capita in the Asia Pacific region in 2016, as these are two of the poorest countries in the world that also have large young populations. In comparison to China and India, the healthcare services of Bangladesh and Pakistan are underdeveloped, which is illustrated by limited health spending, low physician rates and high infant mortality rates.

Multinational pharmaceutical companies are increasingly looking to invest in or form partnerships in these four markets, due to the size of the potential drug consumer pool. The generic sectors in these four markets are particularly significant, and have grown rapidly in recent years. However, there still remain concerns over IP protection and its enforcement, which could deter multinational companies from entering these markets.

Highlights from the region

BANGLADESH
There is a large generic market in Bangladesh, and companies such as Square and Beximco are beginning to have success overseas. In November 2010, for instance, Beximco announced a strategic manufacturing, supply and product development agreement with the US firm, Adamis Pharmaceuticals, to launch generic drugs in the US market. However, despite the country possessing huge manufacturing capabilities which supply 96% of domestic need, the complete lack of R&D in domestic companies could affect the market, especially if companies have not evolved by the time the TRIPS agreement comes into effect.

CHINA<BR> The Ministry of Health (MoH) has made lowering drug prices a top priority for health authorities in 2011. The National Development and Reform Commission (NDRC) implemented two rounds of drug price reductions in 2011, one in March and the other in September. Most of the drugs reduced were manufactured by multinationals, which had previously not been subject to pricing controls. In July 2011, the MoH revealed that it may introduce mandatory licensing policy to secure cheaper drugs for HIV/AIDS patients, as part of the country’s universal health coverage programme. In January 2011, the MoH announced that the Essential Drugs List would be further expanded to cover nearly all government-sponsored grass-roots health institutions

INDIA
The Indian pharmaceutical industry is responsible for around 8% of world pharmaceutical production. Over the last couple of years, Indian pharmaceutical companies have been increasingly targeted by multinationals for both collaborative agreements and acquisition. During the first half of 2011, Bayer and Zydus Cadila agreed to set up a joint-venture called Bayer Zydus Pharma (BZP), for the sales and marketing of pharmaceutical products in India. BZP will operate in key segments of the Indian pharmaceutical market, with a focus on: women's healthcare, metabolic disorders, diagnostic imaging, cardiovascular diseases, diabetes treatments and oncology. PAKISTAN
Pakistan’s pharmaceutical market is small and equally split between multinational and domestic companies. Espicom projects the market to grow at a fairly high single-digit CAGR in dollar terms during the forecast period. By 2016, it will be the 11th largest pharmaceutical market in the Asia Pacific region covered by Espicom. The pharmaceutical market is dominated by locally manufactured pharmaceuticals, predominantly generic drugs, which meet around 90% of country’s needs in 2011. Imported retail medicaments account for the remainder of the market, although manufacturers rely heavily on imported raw materials for production. Multinational companies account for around half of the market by value, although local producers have a far greater share in terms of volume.