Global Health Frontiers: Emerging Market Opportunities to Serve the Poor

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Background: The global pharmaceutical industry is in transition: growth in high income markets has slowed, while growth in emerging economies such as Brazil, Thailand, Indonesia, India and China is in the double digits. While many programs have focused on access to new drugs and vaccines in the least developed countries, rapidly growing countries at higher income levels – home to more than 70% of the world’s poor – have historically been ignored by both companies and donors. Although the countries are too wealthy to qualify for much development assistance, entrenched inequality and substandard delivery systems have prevented healthcare and medicines from reaching the entire population. At the same time, economic development has increased the demand for new health products, and the concurrent increase in the burden of non-communicable disease has led to a greater degree of overlap with the products currently available in high-income markets. Please see the Global Health Frontiers background paper by Melinda Moree for more information on these trends.

Within this context, the Center for Global Development seeks to explore whether the economic driver of the relative wealth of emerging market countries1 can provide an incentive for pharmaceutical companies to contribute to expanded access to health-related products and services that will benefit the poorest populations at the “bottom of the pyramid.” If such potential exists, CGD hopes to identify specific ways in which global health actors, including the donor community, can support engagement of pharmaceutical innovators and suppliers in emerging markets.

Purpose: The Global Health Frontiers (GHF) project aims to contribute to debates about access to affordable global health products and services in several ways: First, by articulating the potential implications for access by the poor of growing demand for pharmaceutical products in emerging markets. Second, by exploring economic opportunities for pharmaceutical companies by identifying both existing products for which market demand is poorly understood or served, and therapeutic areas in which additional R&D could generate significant revenue as organized purchasing expands. Third, by identifying workable solutions to the regulatory and logistical barriers now encountered in these countries, and assessing a broader range of industry models to complement engagement by multinational firms.

Process & Approach: Over the course of one year, CGD will undertake a series of modest analytic activities, combined with structured consultation with the pharmaceutical industry and the global health sector, to:

  • Describe the current situation of the sale and pricing of drugs and vaccines to emerging markets.
  • Describe epidemiological and economic trends in emerging markets that would point to changing demand for drugs and vaccines.
  • Describe the process by which leading countries regulate, finance, procure and distribute drugs and vaccines.
  • Analyze the barriers to serving emerging markets for drugs and vaccines from the following perspectives: company, country, global health donors.

Based on these analyses, CGD will develop an initial slate of solutions to 2–3 key barriers to pharmaceutical companies serving emerging markets, which will be explored at an expert workshop in mid-2008. The workshop outcomes will in turn inform a high-level donor meeting, where 1-2 initiatives will be discussed in depth for potential follow-on activities. A final study report will be published for a public launch in late 2008.

Project Management & Contact Information: The Global Health Frontiers project will be carried out under the leadership of Ruth Levine and Melinda Moree. Please contact Scott Kniaz for more information about the project.

1Based on the MSCI Emerging Markets Index classification. See “The Long View: How adventurous are emerging markets?” (Financial Times, 20 October 2006) for a discussion of alternate definitions of “emerging markets.”