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Strategies for Successful Launch of New Pharmaceutical Products in Emerging Markets
With emerging markets set to overtake more developed countries in the contest to attract pharmaceutical investment, this Article offers a commentary on the need to adopt savvy development and marketing tactics to drive blockbuster product launches and yield continuous success throughout the product's lifecycle.

Patent expiries, dwindling pipelines, stricter regulatory norms, healthcare cost pressures on governments of major global economies, and diminishing credibility of global pharma majors are a few issues that could impact the global pharmaceutical industry's growth over the next few years. Pharmaceutical markets in emerging economies, however, is set to outpace the global pharmaceutical industry growth owing to rising populations, increasing income levels, rapid urbanisation, and consequently increased prevalence of chronic, lifestyle-related diseases.
Although global pharma majors have turned to emerging markets to sustain their growths, most of these investments are aimed at acquiring a 'generics' arm for their businesses. Branded generic products offer companies an opportunity to participate in local emerging markets at competitive prices, thereby gaining a fair share of the market with their quality promise. However, the larger gain, for many multinational pharma companies, remains in the launch of 'original research' brands which offer an opportunity to set higher price levels.
Given that launch success remains elusive for a majority of brands in the pharmaceutical industry, it is imperative (now, more than ever) to have a robust product launch strategy that will enhance the brand's chances of success. While multi-national pharmaceutical organisations have launched many brands in emerging markets in the past, much of the launch strategy has been preconceived by global teams, and most of those strategic initiatives were better suited for more mature markets. Thus, a key to optimising launch success in emerging markets is to have a robust, localised launch plan that will build on the strengths of the company’s image as well as the frontline sales team and addresses the needs of the local HCPs (healthcare professionals) and patient populations.
However, despite the best laid plans, it is often the implementation of these plans that drive the success of new product launches. The lack of rigor in ensuring timely and complete implementation and the failure to set KPIs (Key Performance Indicators) often results in sub-optimal outcomes for the brand, diminishing the possibility of the brand to achieve relatively high peak sales in the shortest possible timeframe.

Growing Signifi cance of Emerging Markets
The loss of patent protection for several major pharmaceutical brands, combined with an inadequate influx of new products with the promise of blockbuster sales, has resulted in the recent slowdown in the growth of the global pharmaceutical industry.
However, multiple reports indicate that the industry is likely to see an upswing, with a predicted CAGR of 6.0 per cent in the period from 2011-2017, and expected sales exceeding USD 1.1 trillion by 20171,2. The key drivers of this growth in mature markets like the US and the top five European markets (UK, France, Germany, Spain & Italy) are the growth in generics and the rise in ageing populations in these markets. However, the main contributors to the growth of the global pharmaceutical industry in the next five years are undoubtedly the emerging markets; particularly Brazil, China, Russia, India, Turkey, and Mexico, often referred to as BRICMT nations.
The World Health Organization (WHO) has projected that by 2013, as much as 70 per cent of the global pharmaceutical industry growth will be attributed to emerging markets. These projections are based on the fact that between 2006 and 2007, the BRICMT nations showed an average of 10 per cent increase in GDP and a 46 per cent increase in healthcare expenditures. These figures are far higher than the growth seen in the mature markets of the US and Western Europe3.
It is anticipated that by 2016, emerging markets will account for 30 per cent of the global spend on pharmaceuticals compared to the current 20 per cent; this is despite the fact that the per capita spend on pharmaceuticals in emerging markets is just 5-20 per cent of that in the mature markets. However, the sheer size of these populations tilts the growth in favour of emerging markets4.
Some of the factors creating a promising growth outlook in the emerging pharmaceutical markets are listed below:
• Burgeoning middle class populations with increasing income levels.
• Higher capacity to spend on healthcare.
• Increasing participation of governments in healthcare spending and healthcare infrastructure.
• Increasing urbanisation and change in lifestyles leading to increasing prevalence in lifestyle related, chronic diseases such as cardiovascular, metabolic, and respiratory disorders as well as cancers.

Many global pharmaceutical companies have already made inroads into emerging markets, especially by acquiring brands or companies that allow them to compete in the volume driven branded generics space. While Novartis has long since recognised the value of branded generics and has significant presence in emerging markets such as India, other global pharma are not far behind. GSK’s deal with Dr Reddy’s of India gives them access to markets like Africa, Asia Pacific, Middle East, and Latin America with more than a 100 generic brands; Pfizer’s deal with two Indian companies, Aurobindo and Claris, helped it consolidate its position in the Indian market and acquire a large portfolio of off-patent drugs; Abbott’s acquisition of India’s Piramal Healthcare added an entire generics arm to their business5.

For several large multinational pharmaceutical companies, by 2011, a significant amount of global revenue seems to be contributed by emerging markets (See Figure 1). 30 per cent of Sanofi’s worldwide turnover comes from emerging markets – just a shade more than that from the US. By 2010, emerging markets contributed to 25 per cent of Abbott’s sales – and by 2015, this is expected to increase to one third of their worldwide sales6,7.
While acquiring branded generics remains the main market access strategy for global pharmaceutical companies, it is expected that the major revenue drivers as well as the most significant returns on investment that can be realised by these companies over the next five years will be from the launch of new products in emerging markets. The rising income levels and hence the increase in affordability of drugs in many emerging markets is driving an ‘aspirational’ shift in patient expectations from healthcare delivery and disease outcomes. Those who can afford it want the best care and are willing to pay a higher price for new, branded drugs sold by multinational companies.

New Product Launches in Emerging Markets
Global pharmaceutical companies are only just beginning to realise the strategic importance of launching new products in emerging markets. This ‘slow’ approach is indicative of the significant challenges that are inherent in emerging market economies and the difficulties faced by multinational organisations in navigating the unregulated, diverse, and complicated healthcare delivery structures within them. However, despite the fact that emerging markets pose several challenges, global pharmaceutical companies also recognise the future potential in these markets represented by their large populations and huge unmet medical needs.

Be that as it may, many new products have been launched in emerging markets over the last 10-15 years. The evolving scenario in emerging markets have revealed that new product launches in emerging markets have a very short window of opportunity – ie, the product’s performance in the first six months of launch is a very large predictor of its success over the next few months.
Products that achieve steeper uptake curves in the first six months after launch tend to gain more market share and sustain their success over the years even as competitive activity intensifies. Across the key emerging markets of Brazil, Russia, India, and China, less than 15 per cent of new products are able to achieve steep uptake curves in the first year of launch8. (Figure 2)
Even as the size of the middle class population in leading emerging markets like China, Brazil, and India increases, the rapidly changing economic scenario in these markets indicates that the income levels within these middle class populations is also rising. As incomes rise, the lifestyle of this section of population is becoming increasingly ‘westernised’ leading to a rise in chronic, lifestylerelated diseases. This phenomenon has a significant impact on the configuration of the pharmaceutical markets in these countries. The strategy of launching primary care products targeted at acute diseases is slowly changing and there is a greater influx of speciality products that address chronic diseases in these markets8. (Figure 3)
This trend of launching speciality products in emerging markets seems to have developed along with a parallel trend of the reduction in the time lag between the launch of new products in mature markets and in emerging markets. This time lag has been nearly halved over the last few years to just 1.25 years8. (Figure 4)

Why do New Product Launches Fail?
As these trends evolve, the probability of early success with the launch of new products in emerging markets is increasingly uncertain. There are several major challenges that impact the likelihood of success of new product launches in emerging markets. The narrow success window of just six months and the increasing needs of these markets for complex, speciality products combined with relatively short time lag between global and local launches, further reduce the possibility of applying best practices from global markets.
Thus, it is not surprising that over 80 per cent of new product launches in emerging markets do not live up to their projected sales, market share, and profit objectives.
There has been extensive research conducted across a variety of product categories and market types in order to understand the reasons for failure of new products. For the pharmaceutical industry, particularly in emerging markets, success remains elusive in launching new products largely because companies do not invest sufficient time and resources to develop strategies that resonate with the local markets.
Instead, they often rely on global strategies and brand asset repositories to supplement the efforts of the local brand management or marketing teams. There are several other factors that either in isolation or together with the inertia of the local brand management or marketing teams can contribute to the failure to realise launch success.

Critical Success Factors for New Product Launch in Emerging Pharmaceutical Markets
Although emerging markets are similar in many aspects, each market has its own unique set of hurdles and socio-economic factors that need to be kept in mind while preparing a launch strategy.
Each market needs to be treated differently based on its regulatory environment, distribution setup, and the degree of influence that physicians have on patients.
Given below are some key parameters along which differences can be perceived across various emerging markets9.

The doctor-patient relationship differs significantly across markets
• Greater number of patients per doctor in Asian markets results in less time for physicians to engage in patient education or counselling.
• Latin American doctors have very little say in the choice of drugs – pharmacies are more powerful and are involved in recommending specific brands.

Online connectivity varies across emerging markets
• In Korea, nearly every single household has a broadband connection.
• In Russia, online connectivity is rather poor – for market research firms to conduct online surveys even in cities like Moscow, physicians have to be called to a central location and provided computers.

Communication of brand messages have to be tailored to market needs
• In Asia, promotional messages used by sales reps need to be simple and clear.
• Messages that are created for Western markets may not resonate with traditional markets like China/India and gaps in translation may further alter the impact of the message.

The key to success in emerging markets lies undoubtedly in ensuring that while overall broad global strategies may drive brand marketing, local market insights need to be woven into key messages and delivered through media that are most impactful, across target audiences that are most influential.
One of the most important elements of the launch strategy for emerging markets is the pricing. Given that outof- pocket expenditure on health is as high as 40-60 per cent of the total health expenditure across emerging markets, these markets are highly price-sensitive. This is further complicated by the large urban-rural divide. In markets like Brazil, China, and India, approximately only 30 per cent of the population lives in urban areas, however, it accounts for nearly 70-80 per cent of the consumption of their health infrastructure, mainly due to their higher income levels and better access to healthcare facilities.

Relevance of a Project Management Office for New Product Launches
Even robust local strategies and creative tactics may not guarantee success if these efforts are not well coordinated through a cohesive new product launch team. Pharmaceutical brand managers in emerging markets can no longer function in silos since that would limit their ability to collate the best possible capabilities for driving the success of the new product launch.
New Product Launch teams require representation from medical, marketing, sales, market research, manufacturing or purchase, finance, as well as distribution and/or logistics teams. The new product launch team needs to have a separate identity and a reporting structure to the senior management team in the company to ensure that the new product launch processes are well defined and reach timely completion, according to the set objectives.
Companies in emerging markets may have one of the two key issues that affect the outcomes of their new product launches:
• Lack of experienced personnel who can understand market needs and devise impactful strategies as well as manage and coordinate various activities that together spell launch success.
• Lack of bandwidth among marketing or brand management teams to be able to coordinate with multifunctional teams in order to ensure that all tasks related to the launch run seamlessly while adhering to timelines.

In order to overcome this shortfall, companies need to consider setting up a project management office (PMO) that would develop a detailed launch plan with roles, responsibilities, and timelines, drawing on the expertise and insights of various members of the launch team.
The PMO would help coordinate the efforts of the launch team, ensure timely completion of tasks and prepare periodic updates for the senior management team such that the new product launch receives optimal executive attention.
Setting up KPIs for tracking of the performance of the new product is one of the most critical roles of the new product launch team. These KPIs need to be agreed upon by the various members of the team and signed-off by the senior management team. The PMO can then integrate these KPIs into the launch plan and publish regular dashboards that measure these KPIs during the prelaunch, launch and post launch phases at periodic intervals. Nature of KPIs can change based on the different phases of the project.
It is critical to ensure that the roles and responsibilities of the PMO are well defined. It may be of value to the company to have the Brand Manager or Product Manager as the Launch Team Lead. The Launch Team Lead needs to have the following performance measures related to the new product built into his or her personal KPIs:

Peak sales and time to peak sales
• Market share and prescription share in first six months of launch.
• Promotional spend and promotional spend as percentage of sales in year 1.
• Gross profit and contribution for the new product at the end of year one.
• Conversion rates: non-prescribers to prescribers.

The Project Management Lead from the PMO needs to have clearly defined set of responsibilities and should be tasked with the following performance measures • Creation of detailed launch plan with strategic inputs.
• Negotiating for and publishing KPIs for new product launch team.
• Timely completion of activities within the launch plan.
• Timely conduct of launch team meetings with minimal absentees.
• Timely publishing of new product launch progress reports.

Optimising launch efforts in emerging markets is imperative for success in these markets and is likely to pave the way for reaping future benefits given the increasing size of these populations and their unmet medical needs. Although some of the economic realities are similar across emerging markets, it is important to treat each market as distinct and weave in local market insights into global strategies.
As emerging markets need time to mature, their marketing teams need external fortification in the form of project management offices (PMO). A PMO can be an effective way to support local markets by providing them the extra resources that would be required to coordinate all activities related to the new product launch. This releases key marketing personnel from day-to-day follow-ups and collation of progress reports, allowing them to focus on more strategic initiatives that can help ensure new product launch success.
The PMO model can be successfully deployed across multiple emerging markets and can be governed through the regional marketing hubs of global pharmaceutical companies. This can ensure that suitable global strategies are well disseminated and local market realities are adequately represented within the new product launch plan.
The option of using external facilitators for driving internal programs deserves to be explored as the pharmaceutical business model transforms and evolves to accept the new market realities of fewer and truly differentiated new products, increasingly well-informed and better connected patients and care givers, and increasingly tech-savvy healthcare providers.