Reaping Rewards in Russia, Turkey and MENA
November 18, 2014
In the world of global biopharmaceutical sales, Russia, Turkey and the Middle East (MENA) are the new darlings — for a variety of reasons.
Economically, these countries are well positioned. Russia is experiencing the highest growth rate of all the BRIC countries (Brazil, Russia, India, China) and Turkey is close behind, ranking among the top 10 fastest growing emerging markets, Both also have strong and diverse economies, which is key to maintaining a strong pace of growth for years to come. MENA as a region has also fast economic growth and highest cash reserves per capita in the world.
The improving economic environment in these countries indicates that sales of pharmaceutical drugs will rise in coming years as citizens move into higher economic brackets and seek broader healthcare solutions, and government healthcare spending continues to increase. Pharmaceutical markets in these countries have a significant growth potential as the percentage of global pharma sales in these countries has the potential to reach percentage of global GDP of their economies within the next decade (and is currently lagging behind significantly). That is why Russia, Turkey, and several countries in MENA (Saudi Arabia, UAE, Egypt, Algeria) have been included among the top 20 emerging pharmaceutical markets by IMS.
As the governments in most of these countries are investing heavily in the healthcare market, they are looking for partners and providers to bring them new treatment options. All of this growth translates to huge sales opportunities for biopharma companies and other healthcare providers.
However, being successful in these markets requires more than just shipping product abroad. Biopharma companies have an opportunity right now to position themselves as healthcare industry leaders in Russia, Turkey and MENA who are willing to invest time and resources to address the unique needs of their people.
One of the best ways to establish this presence and build a positive local reputation is by investing in research and development programs in these countries. Establishing trials in Russia, Turkey and MENA demonstrates to governments, NGOs, regulators, payers and providers that the biopharma company is investing in the well-being of their economy and health. These trials not only show a commitment to addressing the unique healthcare needs of local patient populations, they create jobs and bring skills and knowledge to the community that will generate value for decades to come.
In return, these markets offer opportunities for these companies to significantly cut their trial costs and gain access to vast populations of potential trial participants with few competitors.
However, there are risks.
The skills, experience and infrastructure to support clinical trials is less mature than in more developed nations, and biopharma companies will need to invest time up-front recruiting and training staff often from the ground up (it is important to mention that the clinical trial-readiness in Turkey and particularly in Russia are significantly more advanced than in the MENA countries). They can’t expect a talent recruiter to locate hundreds of experienced English-speaking clinical research professionals, because they simply do not exist.
Biopharma companies must also spend time building relationships, and meeting with local regulators and hospital administrators to communicate their goals and understand the regulatory and commercial standards that must be met. Governments in Russia, Turkey as well as several MENA countries (particularly Saudi Arabia and Egypt) have taken steps in recent years to more rigorously regulate clinical trials, and some regulators require (or may require in a near future) proof that a percentage of the trials for new drugs are conducted locally as a condition of acceptance of new product’s registration.
Biopharma companies will also face the unexpected obstacles that are not uncommon in emerging markets. For example, in Russia, Turkey and in all MENA countries study materials cannot be shipped directly to a research site (that is why local intermediaries – depots — have to be used) and require provision-of-import license. Likewise, export of biological material to a central lab requires an export license. These additional study demands require the use of a local intermediary for obtaining import and export licenses. Such additional requirements add time and cost to your study.
To manage these risks and increase the value of investing in these countries, many biopharma companies work with strategic partners who have existing teams and infrastructure on the ground, and a deep knowledge of the legal, cultural and regulatory environment. These partners can help you navigate the landscape and identify risks before they derail trial productivity.