IMS adds countries to ‘pharmerging’ hit-list

The Shanghai skyline: China remains the sole 'tier 1' emerging market

IMS Health has added 10 more countries to its list of ‘pharmerging markets’ which represent the future of pharma industry growth.

The original group of seven countries which IMS labelled ‘pharmerging’ a few years ago - Brazil, Turkey, Russia, China, India, Mexico and South Korea - are joined by so-called ‘Tier 3’ countries.

The market analysts say that China is such an important market that it is the exclusive occupant of Tier 1. Tier 2 is now made up of a triumvirate of the next most important markets, Brazil, Russia, India

Mexico, Turkey and South Korea now reside in Tier 3. The new countries in this group are: Venezuela, Poland, Argentina, Vietnam, South Africa, Thailand, Indonesia, Egypt, Pakistan, and the Ukraine.

Its new study, ‘Pharmerging Shake-Up: New Imperatives in a Redefined World’, predicts that the pharmerging countries will, in aggregate, expand by $90 billion in the next three years and contribute nearly 50% of annual market growth by 2013 – up 37% from 2009.

“With a raft of pharmerging countries rapidly gaining market share, we’re seeing a new world order take hold within the pharmaceutical industry,” said Murray Aitken, senior vice president, Healthcare Insight, IMS.

“It’s clearer than ever that the China market is in a league of its own, while an expanding group of ‘fast followers’ are building momentum and providing additional growth opportunities."

Aitken added: “But collectively, they offer strong growth prospects fuelled by rising GDPs, expanding access to healthcare, and in many cases, an improving regulatory environment.”

The IMS predict that China will become the world’s third largest pharma market next year, up from eighth in 2006. China is set to contribute in excess of $40 billion in annual sales by 2013 given its $8 trillion GDP, large population, consistent investment in healthcare and the rise in its more affluent middle-class. 

Tier 2 countries are each expected to add between $5 - $15 billion to total pharma sales by 2013 who are each benefiting from a rise in their own middle-classes and improvements in medical infrastructure.

The Tier 3 countries are now expected to add $1- $5 billion by 2013. IMS notes that, while each market is unique, they are all complex, dynamic and subject to rapid change, indicating a higher risk for big pharma investors.

“The key essentials are in place for the industry to drive new opportunities within each tier of the pharmerging markets,” said David Campbell, senior principal of Pharmerging Markets, IMS.

Campbell continued: “Our experience points to the clear advantages that exist for the early movers. Pharmaceutical manufacturers that lead in building out organisational competencies, tailoring portfolios and adapting business models to these new markets will reap the benefits of differentiation and entrenched presence compared to those that wait.”